Volume based roofing companies AKA "Sticker Companies" started to form in the late 60's in the roofing industry. They were formed by well educated business people that had success in other industries, but decided to focus in residential roofing at first. None of them really grew up in the roofing industry where the whole family worked as a team in a local small roofing business; They mostly consisted of one or two individuals at the top, and worked in a pyramid format. They have been quite successful at keeping people employed all year round, but to do this they have to sometimes offer rock bottom pricing.
One of the big issues with offering bottom line pricing in the roofing industry, is you have to get deals on supplies from roofing manufacturers. The problem here is that almost every roofing manufacturer in our world can only give away their cheapest shingle, or cheapest made materials when a roofing company wants to purchase in volume. The cheapest roofing products can also be called seconds by a major manufacturer, but if your not a roofing contractor or roof consultant, you will not be able to recognize these variables.
Basically in 97% of
sold jobs by a volume based roofing company, the home-owner will receive an industry standardized roof which is of a lesser quality product. An industry standard roof is OK, and will keep your insurance company happy, but they are also pro-rated from an insurance company's perspective. What this means is that an insurance company will start to up a home-owners rates after the 15-20yr mark sometimes without even an explanation other then common inflation.
Many consumers, and people in general think that there's a lot of brains behind a volume based business, but the fact is that's really far and in-between the real out-looked facts. The main principle "MO" (Method of Operation) is to buy jobs to put up signs when business is slow, and when everybody gets busy then up the rates. It's actually kind of stupid, but simple. Not many people realize that volume roofing companies lose tens of thousands of dollars per year to anywhere from buying jobs, to people that don't pay them on time, to general contractors that screw them around for months without payment. Again in a volume companies mindset, its all about keeping busy, and looking busy?
They are also always worried about the competition, so they figure with cheap priced crews, the owners hope they can one day, choke out the competition as-well? When the competition is gone, then they can up the rates in some areas? They also think that keeping their staff employed in the bad times, will enable them to have them around when the competition isn't a problem, and they can again "Raise their rates" It's sort of a 1960s mindset. Outdated, and a bit ridiculous.
Today volume based roofing companies are struggling, because of the power of the Internet and the new economy that is growing around them. Many people use search engines like Google or Bing to find a business in their area or use their own voice, and go with a word of mouth reference scenario. If you can find your local yellow-pages paperback directory, you'll notice companies with panoramic ads. Most of these are volume based roofing companies in your area. They still depend on the power of an older generation that still uses these books to find professionals, but lately they have also been spending thousands of dollars on Google ads to SEO companies that can offer their name to appear at the top spot for a consumer search based upon key roofing words that consumers use for a search on roofing related info. The problem here is that on the first same page, that small local roofer also appears for the consumer. This is actually tearing away at the inner guts of a volume based company.
A volume based roofing company needs so many calls in a day, and so many paid calls in a day to continue to pay it's large massive overheads. Most panoramic ads in your local yellow-pages directory start at $1500.00, and can go up to $2500.00 per month depending on which area and book the ad is going in, so you can just imagine the overheads that some of these volume based companies have if they're in multiple books? One has to remember that they're not drug dealers, so at the end of the day somebody has to pay for those ads.
What recently has been happening for these types of businesses, is that they have to put more pressure on their sales people, and their staff. The staff will have to drop their wages or the owners will threaten them with being replaced by cheaper help. What internally happens here is that the sales people of a volume based business will get more aggressive in nature. They will slander other roofing companies or they will hound and hound a customer until they can sign them up for a new roof.
Volume roofing companies are famous for hiring street people, druggies, silent to hidden drug users, and people that cant hold a dime to their name. They have also been known for hiring X-Roofing contractors that had a bankrupt or failed roofing company prior. These particular contractors had trouble running their own independent business cause of a variety of issues besides drugs etc., so they join a volume based company hoping it will be easier on them.
Once the owner of a volume based roofing company acquires these types of individuals, they will usually treat them every year to something special. It could be a special hunting or fishing trip to a remote area, or just a free trip somewhere? It has been known in psychology that this type of behavior really does stimulate certain people, and make them believe that they are appreciated? They will usually end up losing any negative thoughts towards the volume based company or it's owners when anything negative arises throughout the work year.
This category of staff represent about 85% of a volume companies structure. The last 15% is the owners, foremen, estimators, and managers or secretaries. These people are often good hard working people except for the owners whom usually blame them if anything goes wrong. The funny thing with these people is that they can work for 20+ years for a volume based company and be fired just the same as one of the druggies tomorrow? It's the sad part of a volume based business structure. It's hard to believe, but sometimes it takes 20+ years for some people to realize that they're not respected, and the only loyalty given means nothing. Again volume based companies are all about the bottom line.
The other more bigger issue is that a roof is not something you can purchase off a shelf at a box store. It's not a blender, toaster, or a frying pan that one could compare prices from other box stores. A roofing system is not something you look at with a Walmart or Target approach. It's sole purpose is to keep mold, and water moisture out of your home or building. It cant be systematically changed into something that you can have installed by robots either. It is always going to need the services of a human professional to have it assembled properly for your designed building or residence.
At the roofing groups perspective, is that volume based roofing companies will slowly fade away in time due to the power of the top 5 paragraphs.
