Wow some people have nerve

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Dennis Alwon said:
The problem is you never mentioned the 30% on material until now. When I look at profit I look at the entire profit. 7% is nothing for a job but when you add 30% markup on materials then that changes things.
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I don't think he can retire on 30% of $500 worth of material.
 
ishium 80439 said:
I just priced a job for a homeowner. My total quoted price came to $1910.

I got an email from him this morning that read, in part, "You do the job as you listed for $1850 and throw in for free the GFI outlet by the stairs".
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I'll do the job for the original price of $1910.00 but I'm willing to throw the GFCI outlet in for fee. That outlet would normally run you another $200 so that's a little over a 10 percent discout on the total job price.

I would rather throw something in for free than reduce price because it's not really going to cost say $200 for me to run the extra outlet.


Try that an see if it works.
 
growler said:
I'll do the job for the original price of $1910.00 but I'm willing to throw the GFCI outlet in for fee. That outlet would normally run you another $200 so that's a little over a 10 percent discount on the total job price.

I would rather throw something in for free than reduce price because it's not really going to cost say $200 for me to run the extra outlet.


Try that an see if it works.
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Thats a good idea, free items can seem more valuable to the customer than they really are.
 
Dennis Alwon said:
The problem is you never mentioned the 30% on material until now. When I look at profit I look at the entire profit. 7% is nothing for a job but when you add 30% markup on materials then that changes things.
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Who knows what mark-up he is getting on material if any? I noted 30% year end which is above average, and 30% of a year end material mark- up is a decent amount of money. when you add that to a salary, your up there.
 
I certainly understand holding ones price and I certainly understand we cannot work at a loss.

The part I do not understand is the feeling that the customer is wrong or has 'nerve' for trying to get the price down. Often the customers I deal with their job is to get the price down.

Can I assume you all just pay for price for cars, trucks, supplies etc?

Only a timid consumer pays full price without at least trying to get a better deal.
 
iwire said:
I certainly understand holding ones price and I certainly understand we cannot work at a loss.

The part I do not understand is the feeling that the customer is wrong or has 'nerve' for trying to get the price down. Often the customers I deal with their job is to get the price down.

Can I assume you all just pay for price for cars, trucks, supplies etc?

Only a timid consumer pays full price without at least trying to get a better deal.
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That is why you need to estimate some jobs really tight, because most customers will look for the best deal in town, and adding any bulk to your price may not help you get the job. as it is, if the market tightens other then price, you can become more productive on the jobs, this can give you an advantage.
 
I think customer's just see a licensed contractor is a licensed contractor.

And there all going to do the job right. All they care about is which one is the cheapest.

And it's easy to get a free estimate, so why not just keep calling different companies until you find the lowest.

If we all stop giving free estimates, the customer won't have all the power.
 
Most homeowners only see $$

Most homeowners only see $$

In my experience most homeowners don't know a great job from a mediocre one. IE, almost everything goes behind the wall, or in the attic. Thus they base cost on a small cross section of pricing that among others, we provide. The we being the key word as many doing electrical work don't have the skill set to determine their overhead, or even know if they're making a profit which hurts everyone.

I just had a older (I'm 59) couple ask me to quote a price for a job to replace a couple of 2 tube 4' fluorescent fixtures with recessed fixtures in their Kitchen. They mentioned that they wanted LED lights. I tried to educated them that to replace or equal the illumination from the fluorescents I'd need to install 16 of the 75 watt equivalent 576 lumen LED fixtures. That not being feasible I instead tried to convince them that six 42 watt CFL recessed six inch fixtures would provide more light (than the fluorescent fixtures they were to replace) and with new 6500K bulbs be quite nice.

Result someone took down the fluorescent fixtures and installed four 576 lumen LED recessed 6" fixtures.

So we suffer by having competition that are after the same thing we are, to survive and hopefully make a profit. Trouble is we don't have a way to educate our competition so that the playing field is more level.
 
The price I give is the price of the job. Never back off of your price otherwise they'll think you were trying to rip them off in the first place. My price might be higher than some of the others, but customers seem to like me and that is what I'm going for so I don't have to worry about being the cheapest guy in town.
 
mcclary's electrical said:
$0(profit) x 0 (jobs) =$0
$0(profit) X 30 (jobs) =$0,,,,,same boat,,,,,but with worn out body,vehicle and tires
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I don't see it that way. When Satcom talks about profit being as low as 3 percent he is right. Profit is whats left after all the bills are paid and I mean all the bills. We are talking about every thing from fuel to taxes and most important the owner's salary.

Unless you are going in the red on a job then you are still breaking even and that means everyone gets a check an it doesn't bounce. Breaking even does suck but every day you don't work you are going in the red because the bills don't stop comming. You don't stop paying rent or phone or insurance or even cost on vehicles so you really can even break even without working unless you go out of business so the cost of being in business will stop.

Simply put if it cost a $1000 a day to run your business and you bring home a $1000 then you haven't made a dime in profit but there is money for every one to get paid. You have met operating cost, anything less than meeting operating cost put the business in the Red.

Remember in "Alice in wonderland" about having to run as fast as you can just to stay where you are. That was written by a contractor. :)
 
I just got back into the office and was about to call the customer back but wanted to check in here first to see the different opinions.

Honestly the only reason I considered it "nervy" was the way he approached it- "Discount your price plus give me something for free". While it would have been a worse deal I almost would have rather him said something like "Do you think you can do the outlined work plus the GFI for $1850". That way it seems like he is trying to get the product he wants for a price he can afford. The way he phrased it just made me feel like he is trying to beat me up and it is a game to him. I know it's just semantics but it matters.

I like the discount idea. I may need to see what I can think of for that. Maybe a certain amount off for future work over a certain amount. Grocery stores give coupons for loss leaders all of the time.

I also like the approach of sticking w/ the original number and throwing in the GFI.

Interesting thoughts. If only there were one clear answer everyone would be doing this.
 
Very often I am asked for seperate pricing for numerous jobs at one location. Often they just say OK to all of it. When they resist or ask me to lower the price I tell them if they do all the work I will offer a small percentage discount (like 5% or 10%.) Since I add that money to the individual jobs it is no problem to back it out if they ask. If they don't ask I get a better paying job.
 
mkgrady said:
Very often I am asked for seperate pricing for numerous jobs at one location. Often they just say OK to all of it. When they resist or ask me to lower the price I tell them if they do all the work I will offer a small percentage discount (like 5% or 10%.) Since I add that money to the individual jobs it is no problem to back it out if they ask. If they don't ask I get a better paying job.
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Separate pricing like that should never simply be a portion of the total.

For instance, you could bid a job as:

Part A: 7,500
Part B: 5,000
Part C: 2,500

Total for all 3 parts: 13,750.


NEVER calculate the price for all 3 parts, then divvy them up. ALWAYS calculate them as separate jobs, then figure out what kind of 'discount' to give for doing all three.
 
480sparky said:
Such strategies don't work at the gas station or the grocery store.
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I'd respond to that in two ways.

Firstly, Wallmart. Remember what it was like before Wallmart? All those mom and pop stores? Where are they today? The stores that have costs and overheads, just like every other business. The customers said "charge me less", and someone did.

Secondly, (almost) no-one "needs" electrical work done to survive. But they ain't gonna survive without groceries, so groceries will pretty much always have a higher purchasing priority than electrical work.
 
480sparky said:
Separate pricing like that should never simply be a portion of the total.

For instance, you could bid a job as:

Part A: 7,500
Part B: 5,000
Part C: 2,500

Total for all 3 parts: 13,750.


NEVER calculate the price for all 3 parts, then divvy them up. ALWAYS calculate them as separate jobs, then figure out what kind of 'discount' to give for doing all three.
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I do all that except I don't always offer a discount unless I feel I need to. In other words I sometimes make the extra profit.
 
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