Three Major Reasons as to Why Lawn Care Costs Have Been Falling In Recent Days
Several years ago, we used to have very few lawn care firms in most cities. Those few firms tended to charge people what could only be fairly termed as 'premium pricing rates' for their services. But in the recent past, we have seen a trend where the rates charged for have been falling drastically. We are looking at a situation where, in many cities, in a span of less than five years, the rates charged for have fallen by as much as 50 percent. This trend begs for explanation, and that is what we will be trying to explore here.
Three factors emerge, as possible reasons as to why fees have been falling in recent years. Those would be things to do with:
1. The entry of many players into the lawn care business: this has had the effect of making the field very competitive. And while many of the players in the industry are averse to price wars, all it takes is for one player to lower rates, before all the others have to follow suit, or risk being pushed out of business. Comparing rates in various cities, you soon notice that they actually tend to correlate with the number of lawn care firms operating in the various cities. In cities with many firms, the rates tend to be low. In cities where the firms operate as virtual monopolies, and where there is a huge client base, the rates tend to be remarkably high. But it also emerges that there are indeed very few cities where the firms operate in virtual monopolies. People are always on the lookout for good business opportunities, and once someone notices the opportunity inherent in the offering of, there is nothing to stop them from venturing. This is, after all, an area with virtually no 'barriers to entry' for new players.
2. The decision by many people to engage
firms: ordinarily, the decision by many people to retain lawn service firms to care for their lawns on their behalf would have caused an upward pricing surge. But in most cases, it has had the opposite effect of lowering rates. To understand how this comes to be, you have to appreciate the fact that these lawn service firms tend to have very many fixed costs, and hardly any variable costs. What happens, when they get larger client bases, is that they end up with more people among whom to share the said fixed costs. This means that the amount of money each client has to pay for those fixed costs goes down (as the fixed costs remain more or less constant, even as the number of clients increases). Naturally, it brings down with it the overall pricing rate for the lawn service.
3. The emergence of more efficient lawn care approaches: these have made it possible for the lawn service firms to render their services more cost-effectively. That has translated into savings, which they pass onto their clients (in an effort to remain highly competitive). The end result, to the buyers of the service, is lower pricing rates for lawn care services.
Three factors emerge, as possible reasons as to why fees have been falling in recent years. Those would be things to do with:
1. The entry of many players into the lawn care business: this has had the effect of making the field very competitive. And while many of the players in the industry are averse to price wars, all it takes is for one player to lower rates, before all the others have to follow suit, or risk being pushed out of business. Comparing rates in various cities, you soon notice that they actually tend to correlate with the number of lawn care firms operating in the various cities. In cities with many firms, the rates tend to be low. In cities where the firms operate as virtual monopolies, and where there is a huge client base, the rates tend to be remarkably high. But it also emerges that there are indeed very few cities where the firms operate in virtual monopolies. People are always on the lookout for good business opportunities, and once someone notices the opportunity inherent in the offering of, there is nothing to stop them from venturing. This is, after all, an area with virtually no 'barriers to entry' for new players.
2. The decision by many people to engage
firms: ordinarily, the decision by many people to retain lawn service firms to care for their lawns on their behalf would have caused an upward pricing surge. But in most cases, it has had the opposite effect of lowering rates. To understand how this comes to be, you have to appreciate the fact that these lawn service firms tend to have very many fixed costs, and hardly any variable costs. What happens, when they get larger client bases, is that they end up with more people among whom to share the said fixed costs. This means that the amount of money each client has to pay for those fixed costs goes down (as the fixed costs remain more or less constant, even as the number of clients increases). Naturally, it brings down with it the overall pricing rate for the lawn service.
3. The emergence of more efficient lawn care approaches: these have made it possible for the lawn service firms to render their services more cost-effectively. That has translated into savings, which they pass onto their clients (in an effort to remain highly competitive). The end result, to the buyers of the service, is lower pricing rates for lawn care services.