Crain’s reports: “Exterminators make killing on bedbugs”

by nobugsonme on January 14, 2007 · 8 comments

in bed bugs, bed bugs and business, bedbugs, business, consumer, crain's, getting rid of bed bugs, how to kill bed bugs, PCOs, professional pest-control services: reviews, suggestion, treatment

This article on bed bugs in Crain’s New York Business quotes the owner of Liberty Pest Control, in Brooklyn, who calls bed bugs “the new moneymaker.” The article highlights how Pest Control Operators (PCOs) such as Liberty are gettinga huge portion of their revenues from bed bug cases, and targeting their advertising appropriately:

Liberty Pest Control, one of the larger local firms — with sales of $4 million and a full-time staff of 56 – gets 25% of its revenues from battling bedbugs. That is up from literally nothing three years ago.

Those gains are not driven just by fate. Liberty has aggressively seized its opportunity. In March, Liberty launched an online ad campaign. The company is currently spending $16,000 a month on bedbug ads, up from no expenditures as recently as a year ago.

Other exterminators are starting to follow suit. Brooklyn’s Absolute Death, a two-man firm with only $100,000 in revenues, is spending $5,000 a month on advertising. Bedbugs now account for 20% of its revenues.

Think about that: Absolute Death makes $100K in revenues, and they’re committing $60K a year to advertising. They’re expecting huge growth. It’s frightening, but not surprising to us Bedbuggers.

Many PCOs in NYC are seeing so much business from bed bugs, in fact, that they can’t always keep up:

Standard pest management in Queens, for example, has had to turn away some desperate bedbug customers as it struggles to keep up with the burgeoning demand from longtime clients. Broadway Exterminating in Manhattan temporarily yanked some of its online advertising this summer after seeing a 50% increase in calls between July and August.

Those are two large PCOs, from what I understand. I applaud these companies for knowing what volume of business they could handle. I have heard a few stories about poor service from PCOs with good reputations, and I have to think that sometimes steep growth in a short period of time (which, let’s face it, all PCOs who treat bed bugs must be facing no matter their size) can lead to quality control problems. Think about it: new hires may not be as carefully chosen or carefully trained in periods of booming business. I expect most reputable firms take care of their reputations, but some mistakes will be made. So when I hear the above firms decided to halt their growth, I am glad to hear it. PCOs who do a good job of fighting bed bugs should grow and those who don’t should not treat them! But good service providers know their limits.

The article states that the profit margin on bed bug extermination is 50%, that treating a 1-BR apt. costs on average $275 to $800, and that companies are starting to insure themselves against lawsuits, because they’re often guaranteeing work that is hard to guarantee.

I would venture that the profit margin on a thorough bed bug treatment is probably 50%; PCOs who do a cursory job, and we have heard of some, are the ones who are really making a killing, and probably killing too few bed bugs in the process.

The article said that due to the tenacity of the bed bugs, which usually do not respond to one treatment,

. . . some companies are changing their [guarantee] policies to adapt to the bugs. Standard Pest Management, for example, recently decided to treat all bedbug-infested apartments twice. Other companies now insist on three treatments.

I am glad that PCOs are learning that “once is enough” doesn’t necessarily work for bed bugs, and I hope they’re also learning how long to leave between those two visits (I’d venture 10-14 days). When PCOs have such an automatic policy on second visits, customers have a better idea what to expect.

When they don’t have such a policy, we often hear from Bedbuggers who think their PCO did a bad job, because they’re being bitten within 10 days of the first treatment. But you will be bitten– some bugs take a little time to die. Depending on the methods used, the bed bugs may have to be attracted to you (the bait) in order to walk through the poison; some may well bite during this time, but they will die. Eggs will hatch within 10-14 days, hence the need for a follow-up. In any case, you should be bitten less after treatment. And you should call your PCO to ask questions if you aren’t sure.

Crain’s bottom line:

“Most bugs don’t stand a chance against exterminators,” says Gene Miller, operating officer at Broadway Exterminating. “Bedbugs stand a chance.”

Now I am waiting for Crain’s to report on how hotels are taking the threat of bed bugs and lost revenue seriously, and what they’re going to do.

Note: If you’re new, read the FAQs — especially the one about how to choose a PCO, and the one that asks “Should I do my own pest control?”

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1 Bugalina January 15, 2007 at 8:55 am

I bear my soul on this board. Every morning I wake up , I go onto this board. My heart is always heavy, and hoping, that I wll go on and see that someone has come up with a “death/cure” for bed bugs. This morning I see what I have known for monhs. Extermintators are making lots of money from the bed bug epidemic. Ok, that’s ok, but what’s not ok is for them to make promises they cannot keep. To overcharge for their services, and to undertrain their technicians. They need to be trained for the emotional minefield they are entering into when dealing with bed bugs. I would like to believe that most exterminators would like to have a product that kills the bugs easily rather than witness the angst of the people who have bb infestations. I see this as as a no-win situation. If it keeps up at this pace people and the hotel industry, are going to be hollering for a chemical that kills them, not some inadequate stuff that costs thousands and requires the entire upheaval of a home for months. The state of this bed bug epidemic disgusts me.

2 nobugsonme January 15, 2007 at 4:07 pm

HI Bugalina,
I agree that PCOs should be honest and do good work, and train their employees properly.
I do believe that honest PCOs do want a pesticide that works. And I bet they’d be happy to charge a nice sized fee and only ever come out once.
I know there are some PCOs that are scamming people or doing shoddy work, but I don’t think it’s the majority.

3 Bugalina January 15, 2007 at 6:50 pm

I completely agree….my exterminators did not scam me, they just didn’t give me the service I should have gotten for the price I paid, and I believe that they didn’t know enough. This was back in May…I hope they are better educated about bed bugs now….the horrors of it all….Like Mr. Harold Stein said “one treatment, one time , $18.00″ Of course he was talking about treating bed bugs in the 50’s with DDT…..hopefully somehow, we can go back to a more civilized place…..Bugalina..

4 jessinchicago January 15, 2007 at 9:46 pm

I, too, believe that most PCOs would be much happier with a solution that allowed them to make one brief visit at a residence, as opposed to several lengthy ones.

That said, I have to tell you guys that when I had my second PCO here, I had a long chat with the regional manager of the chain, who came along to supervise (that was wonderful). I mentioned, offhandedly, that it would be great if DDT was available to us, since it apparently was widely used to successfully treat bedbugs years ago. He grinned at me, and he said, I kid you not, “I DON’T want that to happen. That would ruin my revenues!”

I took it with a grain of salt and I laughed with him, but I wonder if there’s a kernel of truth to what he said.

:)

5 nobugsonme January 15, 2007 at 10:24 pm

Yes, Jess, I am absolutely sure you’re right.

Perhaps some compromise can be reached:

Let’s test DDT and satisfy people that it works and is safe (I think it will, but you know, we have to have some tests done to satisfy both people who say bedbugs became resistant to DDT and those who said DDT is harmful to people and wildlife).

Assuming DDT were available, let’s say PCOs only have to come once and the treatment always works (these are big IFs).

I recommend that PCOs could charge 33% less than whatever they charge now for the standard treatment (for most, according to the article, this is a guarantee based on 2-3 visits). Since they’re now coming once, they can accommodate 2-3 times as many customers. So they’ll make more than now.

I’d be happy to pay a mere 33% less for 50-66% fewer visits, assuming 100% success.

Assuming bed bugs are not eradicated overseas, new customers should keep appearing. But they can have a swift resolution to their troubles. And hotels can keep bed bugs away.

However, if bed bugs stopped appearing here (as they did more or less for several decades), the PCOs would lose their new cash cow.

So the question comes down to this: who has a better lobby in congress? Hoteliers and landlords? Or PCOs?

6 Bugalina January 16, 2007 at 8:59 am

Like I said in a prior post…It digusts me. I am concerned about the PCOs seeing this as a cash cow…they might lobby against something that will get rid of them swiftly and cheaply…Just like Bayer Science , based in Germany, lobbied against lifting the DDT ban in Africa…Well Bayer Science manufacters Suspend and Drion.. Just now on 770 am WABC…Curtis and Koubee Show this morning..Curtis Sliwa just mentioned Bed Bugs..I caught the end of it…I am hoping he is going to talk about them…We should contact him…He prides himself on being a champion for those in need…They are discussing the lawsuit now on the radio…They are laughing about a lawyer sueing…Ron Koubee said “How do we know if he didn’t bring them from New York”…well Ron..that could have some truth to it…but the Hotel in London admitted to having infestation problems…but Ron..you’d better start checking around your mattress….you could be next, and you won’t be laughing…Bugalina

7 nobugsonme January 16, 2007 at 11:45 am

I do think the hotel and landlord communities together or separate would be more powerful than the pest control lobby. Yes, if Bayer gets involved, the stakes are higher. Here’s where politicians would have to be in favor of re-opening the case on DDT. And once a few of them get bed bugs, perhaps they will.

What Cutis Sliwa needs is to hear from a few working and middle class people with bed bugs, and hear what the majority of us go through.

8 Bugalina January 16, 2007 at 12:04 pm

Nobugs….Bayer cannot be trusted, they want their cash cow, Suspend and Drionne, to keep being sold. Even though Suspend has limited effectiveness and Drionne is dangerous. Curtis Sliwa is always talking about his kid…how would he feel if he had to put his son to bed in a bed bug infested apt./home. And Ron Koubee is always talking about his pet Bichon Frisee dog. How would he like to find bed bug bites on his precious dog and on himself. They insulted all of us today, by making a mockery of Mr. Blumings lawsuit.

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