Pricing Conflict with Customer - Advice Requested

[DougMG]

Is the pricing for the work listed below high, reasonable or low?

Charged: $600 ($50/hr) and $300 supplies to install two ceiling fans and the box/wiring (there was easy access to attic above) and also to install an outlet and a light in the attic. In addition to the supplies charge the customer bought and provided me with both fans and the attic light.

Charged: $600 ($50/hr) to replace one existing bathroom vent fan and add a wire for the heat function on the fan. Install new switch for vent fan. (there was easy access to attic above). Also charged $550 for supplies which included me buying the necessary materials and two vent fans.

Customer has now canceled the replacement of the second fan and wants a credit for the materials because I took 12 hours with the first fan and is claiming highway robbery for the work I have done so far. I would appreciate some advice.

 

[John120/240]

12 hours for the first fan ??? Did you run into trouble fishing your wires down

the wall to switch location ? I would say 2 1/2 or 3 hours max. For the attic

keyless 1/2 to 3/4 hr. $ 50 an hour is on the low end of scale. We don't

know your experience level, I would feel guilty charging 12 hours for one

C-fan

 

[sandking]

12 hours is pretty high for a fan regardless of the situation. I used to charge a flat rate of $125 per fan with attic space and get it done 1-1.5 hours max. That was only to cut in a new fan box and connect to an existing source. Then another $45 to assemble and hang the fan. Its much easier to sell a wireless fan remote for $30 if it does not come with the fan.

 

[renosteinke]

I have a neighbor who never cleans up after his dog ... then gets really upset when he steps on a 'mine.' oops.

This thread remids me a lot of that neighbor. The OP makes mistake #1 in entering an open-ended relationship with someone he just met. T&M can only work where there is an very high level of trust.

Mistake #2 is breaking down the pricing. The customer just wants the job done; breaking things down only encourages the customer to examine each line separately. Still, if you do agree to a T&M arrangement, there is a fair expectation by the customer that you won't mark up the parts. After all, your 'handling' is part of your hourly rate!

Finally, from your post it is not clear what was the scope of your work. Did you patch the plaster, flash the vent opening, and paint it all to match?

Now, let's look at the actual numbers.

$300 for materials is awfully high, if all you did was swap out the old fart fan with one of the cheapies that parts houses practically give away. That picture changes if you bought a tricked-out Panasonic, if you had to replace the circuit, make an attic hatch, tent everything off, and do a hospital-grade cleaning.

!2 hours sounds like a lot for what has often taken me but an hour or two- but we return to the question of the scope of the job. Fact is, once you mention 'how long,' the customer will start questioning travel time, parts runs, and coffee breaks.

$50/hr. sounds low, perhaps half what would be a more realistic rate. Still, you're presenting this rate to a customer whose baseline is his own paycheck .... they don't realize that any employer has to brin in $30 for every $10 they pay out - or more! Nor can you expect the customer to appreciate all the other expenses, or even the cost of tools.

So ... here's my advice to you ....

First, get REAL calm. Forget the specifics of this job. Ask yourself what you actually expected the job to run. For the sake of argument, let's say you anticipated the job billing for $400.

Now, imagine how you should have approached the job. Was all as you expected? If so, then tell the customer you made a mistake, and make nice.

If there were rude surprises on the job, explain them to the customer. Let him appreciate how those things influenced the job. Show him how you kept those extra expenses down. If you're lucky, you'll be able to show him how you only asked for a part of extra expense.

You might also explain what you did that the local handy-dandy might not have done. For example, used a proper roof jack, or patched & painted.

It's possible .... not common, but it happens ... that the CUSStomer makes a career being unhappy and throwing tantrums. That's the reason I asked you to calm down, and try -first- to be honest with yourself.

Consider this experience as an opportunity to learn how to better present yourself to the customer.

 

[Sierrasparky]

Mistake #2 is breaking down the pricing. The customer just wants the job done; breaking things down only encourages the customer to examine each line separately. Still, if you do agree to a T&M arrangement, there is a fair expectation by the customer that you won't mark up the parts. After all, your 'handling' is part of your hourly rate!

QUOTE]

Don't charge for mark-up of materials---- Are you for real.
You need to mark up materials even in a t&m job. What - you schlep around a 5 ton shop on wheels fully stocked with material and just give it away!!!!!

I can only see not charging mark-up on materials if you charged for time for going to the store.

 

[iwire]

Still, if you do agree to a T&M arrangement, there is a fair expectation by the customer that you won't mark up the parts.

I am not sure what the customer expects and frankly I don't care but material gets marked up every time.

 

[satcom]

Mistake #2 is breaking down the pricing. The customer just wants the job done; breaking things down only encourages the customer to examine each line separately. Still, if you do agree to a T&M arrangement, there is a fair expectation by the customer that you won't mark up the parts. After all, your 'handling' is part of your hourly rate!

QUOTE]

Don't charge for mark-up of materials---- Are you for real.
You need to mark up materials even in a t&m job. What - you schlep around a 5 ton shop on wheels fully stocked with material and just give it away!!!!!

I can only see not charging mark-up on materials if you charged for time for going to the store.

Every service man that worked at my home usually charged more then list price for their materials. a lot more in most cases, the plumber marked everything up even the small washers, the appliance repair guy marked up sky high, and the HVAC guy must of marked up the duct work 3 or 4 times it's cost, if you don't want mark up don't call a professional, use one of the web lists and take your chances, and just remember if he gets hurt dump the body in the river, he most likely does not have comp or any other insurance for that matter.

 

[nyerinfl]

Another case of T&M gone wrong.

 

[satcom]

Another case of T&M gone wrong.

oh yes, you can't blame the customer, after all they stand around and watch every move you make, and then find fault with everything you did, we avoid these problems by giving the customer a fixed contract price on all residential jobs.

 

[growler]

Is the pricing for the work listed below high, reasonable or low?

Charged: $600 ($50/hr) and $300 supplies to install two ceiling fans and the box/wiring (there was easy access to attic above) and also to install an outlet and a light in the attic. In addition to the supplies charge the customer bought and provided me with both fans and the attic light.

Customer has now canceled the replacement of the second fan and wants a credit for the materials because I took 12 hours with the first fan and is claiming highway robbery for the work I have done so far. I would appreciate some advice.

If someone installed a fan for me and then billed me for 12 hours of labor and $300 in materials they had better have a pretty good explanation of why that much time and materials were needed. It could happen but it's not the normal install.

Maybe an explanation of why so much time and materials were used would help with the customer. :?

I admit that I have priced a few jobs that shocked the customer because they were going to get expensive but it was their choice once they knew how much the job would cost. Some jobs are difficult.

 

[Sierrasparky]

I would gather that the OP is not who he says he is. I would bet the op is actully the customer!

 

[Sparky555]

I might charge $1,000 for two ceiling fans with wiring in August. The home run for the heater circuit could be $500. Now you know the down-side of time and materials work. Additional information can work against you. You never know what will upset your customer. It might be the hours, or the charge for some $3.00 part.

Less is more. If you had bundled up the whole project into one neat little $2,500 contract the customer may have been fine with it. In any case you wouldn't be where you are now with work completed and the customer looking for a rebate.

 

[sameguy]

Is some of the time for waiting for the home owner to supply? If so We charge the same for them to run get parts even if we have to wait; we will take break then to keep price down. We charge for all parts.

 

[Fulthrotl]

Is the pricing for the work listed below high, reasonable or low?

Charged: $600 ($50/hr) and $300 supplies to install two ceiling fans and the box/wiring (there was easy access to attic above) and also to install an outlet and a light in the attic. In addition to the supplies charge the customer bought and provided me with both fans and the attic light.

Charged: $600 ($50/hr) to replace one existing bathroom vent fan and add a wire for the heat function on the fan. Install new switch for vent fan. (there was easy access to attic above). Also charged $550 for supplies which included me buying the necessary materials and two vent fans.

Customer has now canceled the replacement of the second fan and wants a credit for the materials because I took 12 hours with the first fan and is claiming highway robbery for the work I have done so far. I would appreciate some advice.

quote flat rate....

12 hours for a ceiling fan? ummmm.....

the customer probably had the same reaction we are having...

two ceiling fans with decent access to above? tell the customer to make
SURE that the fans they pick out have remote controls. customer buys
the fans.... i'd rather pick out a pair of shoes for the customer than a fan.

i explain that i can spend all day shopping for them, but it's $75 an hour...
to shop.

2 fans, where i don't have to cut in switches, can pick up power from a
piece of romex in the attic? throw a light and service plug in with the
deal... lessee... 50' 14-2 romex, 2 4s boxes, 2 rister industries fan boxes...

$465, including materials, for all 3... unless the fans came from the disney
store, and have tinkerbell twirling.... don't laugh.... then there is a $600
charge per disney fan. anyone who's ever put tinkerbell together knows
what a deal that is.

the bath fan? putting in a panasonic, using existing 4" ducting and wire?
$350, plus the fan.... um... $475....

if i do them all at the same time.... i'll be there 6 hours, the bill will be $940,
my material will be under $200, that gives me $750 for a short days work.

fair 'nuff.

 

[RICK NAPIER]

It sounds as if you may be in violation of NJ's Home Improvement Practices law if you did not have a written contract. This information can be found at this link http://www.state.nj.us/lps/ca/ocp/ocpreg.pdf and in the information from the Board of Examineers of Electrical Contractors you get at your update seminars and when you got your license.

N.J.A.C.
13:45A-16.2 Unlawful practices

12. Home improvement contract requirements--writing requirement: All home improvement contracts for a purchase
price in excess of $ 200.00, and all changes in the terms and conditions thereof shall be in writing. Home
improvement contracts which are required by this subsection to be in writing, and all changes in the terms and
conditions thereof, shall be signed by all parties thereto, and shall clearly and accurately set forth in legible
form all terms and conditions of the contract, including, but not limited to, the following:
i. The legal name and business address of the seller, including the legal name and business address of the sales
representative or agent who solicited or negotiated the contract for the seller;
ii. A description of the work to be done and the principal products and materials to be used or installed in
performance of the contract. The description shall include, where applicable, the name, make, size, capacity,
model, and model year of principal products or fixtures to be installed, and the type, grade, quality, size​

or quantity of principal building or construction materials to be used. Where specific representations are

made that certain types of products or materials will be used, or the buyer has specified that certain types of
products are to be used, a description of such products or materials shall be clearly set forth in the contract;
iii. The total price or other consideration to be paid by the buyer, including all finance charges. If the contract
is one for time and materials, the hourly rate for labor and all other terms and conditions of the contract
affecting price shall be clearly stated;
iv. The dates or time period on or within which the work is to begin and be completed by the seller;
v. A description of any mortgage or security interest to be taken in connection with the financing or sale of the
home improvement; and
vi. A statement of any guarantee or warranty with respect to any products, materials, labor or services made by​

the seller.

 

[RICK NAPIER]

The price of $200.00 was changed to $500.00 requiring a contract.

 

[renosteinke]

There's precious little to be gained here by re-opening the materials mark-up discussion. Let's limit it to the terms of this thread: a 'time and materials' job.

For all the expertise alluded to here ("I always mark up ..."), I note an absolute silence on the restrictions on mark-up common to T&M contracts. I think the highest mark-up I've seen allowed is 15%. Try your "usual" mark up on your next government T&M job; let us know how it works out. Remember: we're not talking about service calls, job bids, accounting assumptions, etc.; we're talking about a T&M job.

It's all about perception. Just as we've all heard about the $500 aspirin the hospital bills out, the customer is going to be hostile to a $50 GFCI. He knows the part is readily available for $15; he will want some justification for the difference. While the customer might be willing to buy an entire 1000-ft. box of the unique data cable he wants for his 100-ft. run, he's not about to buy you three spools of THHN for that 10-ft. circuit extension.

Part of that perception is the customers' expectations. If they expect the job to take an hour, and it takes two days, there's a problem brewing. When the customer expects a $300 bill and gets ambushed by an $800 one, there's a problem. Just where in that job should you have had another chat with the customer?

I am reminded of the time I bought a $30 tire .... for $75. I wasn't too happy with all the additions to the 'come-on' price. I'll contrast that to the guy who told me up front that his tire was $75, 'out the door.' No rude surprises. Care to guess which place got my future business? Care to guess which place was the subject of several fraud prosecutions?

So, ask yourself: who do you want to model yourself on? The convicted fraudster, who piled on unexpected charges- or the other guy?

 

[cdslotz]

I would have run you off after the first fan

 

[petersonra]

Both the number of hours claimed and the material price seems excessive to me. I could probably install a fan in a couple of hours (and actually did once) and I am the world's worst electrician. And bathroom fans can be purchased for well under $300.

$50 an hour is cheap.

 

[Little Bill]

I would gather that the OP is not who he says he is. I would bet the op is actully the customer!

I'm inclined to agree with you here due to the absence of the OP since the initial post.