The price of service upgrades

[jaylectricity]

Why do I make so much more money for doing service replacements or upgrades than I do installing new receptacles or lighting? For example, besides the material costs, I can make much more money replacing a service (which takes 1 day) than I could installing however many receptacles I could install over the course of a day.

On one hand I understand the market value, if most of us are charging more for meter sockets and panelboards, then it stands to reason that the market is dictating that we make more on that item.

On the other hand, installing panels is much easier and more fulfilling (I could wire panels for a long time without getting tired of it) than what it takes to drill studs or fish walls, bend or kneel down to work less than a couple feet from the floor, yet the money is much better.

How do we justify this? Are we underselling the rest of our work because of the DIY factor that can cut into our business?

 

[flyboy]

Why do I make so much more money for doing service replacements or upgrades than I do installing new receptacles or lighting? For example, besides the material costs, I can make much more money replacing a service (which takes 1 day) than I could installing however many receptacles I could install over the course of a day.

On one hand I understand the market value, if most of us are charging more for meter sockets and panelboards, then it stands to reason that the market is dictating that we make more on that item.

On the other hand, installing panels is much easier and more fulfilling (I could wire panels for a long time without getting tired of it) than what it takes to drill studs or fish walls, bend or kneel down to work less than a couple feet from the floor, yet the money is much better.

How do we justify this? Are we underselling the rest of our work because of the DIY factor that can cut into our business?

If your pricing yourself based on your billable efficiency, overhead and desired profit you should be making money based on your business model, not on "market value". We are selling a service, not real estate.

Certain jobs, such as service changes (as you mentioned) and generator installations are typically going to have bigger margins. We target those markets but also price for profit on all other types of jobs, such as receptacles, lighting, etc. Your breakeven and desired profit based on your numbers should drive your prices regardless of what type of work your doing.

What data do you have to support your comment, "Are we underselling the rest of our work because of the DIY factor that can cut into our business?"
If you are "underselling", for this perceived DIY problem, you are hurting yourself and the rest of the industry. DIY are not driving prices.

Stop selling your services based on what the competition (market) is charging. It's the fastest way to go out of business.

Price for profit and sell the value of doing business with your company.

 

[bullheimer]

the answer to your question is 1. because we can. and 2. common sense.

i realize that common sense is no longer common in this country, but COME ON! if you were working around here charging hourly rates to do a service change i would firebomb your truck. yes you would get alot of business and put every body else out of business too. but then you would also go out of business doing this. you dont make any money putting outlets in or doing other hourly stuff unless you have work non stop day in and day out.

a service change for me is a once a month deal where i can make almost enuf money to pay my bills.
there is just one word i would have to use for anybody that does service changes or adds a feeder like a hot tub circuit for hourly rates: STUPID
(this is for contractors only of course, not those working for wages)

FORTUNATELY, i realize you are asking a rhetorical question. thank GOD

 

[LEO2854]

Why do I make so much more money for doing service replacements or upgrades than I do installing new receptacles or lighting? For example, besides the material costs, I can make much more money replacing a service (which takes 1 day) than I could installing however many receptacles I could install over the course of a day.

On one hand I understand the market value, if most of us are charging more for meter sockets and panelboards, then it stands to reason that the market is dictating that we make more on that item.

On the other hand, installing panels is much easier and more fulfilling (I could wire panels for a long time without getting tired of it) than what it takes to drill studs or fish walls, bend or kneel down to work less than a couple feet from the floor, yet the money is much better.

How do we justify this? Are we underselling the rest of our work because of the DIY factor that can cut into our business?

How do we justify this? Are we underselling the rest of our work because of the DIY factor that can cut into our business..,:-?
Yes without question:grin:

 

[LEO2854]

Rember that what ever you charge for a service change ,,you take what the stock cost you and the average amout of time it took and you base your rate on that:grin:your customer is not entiteled to know what your absolute rate per hour is.
do you ask them how much they make?
Give a quote on all job's without hours:grin:

 

[cowboyjwc]

I understand your question, but I don't know the answer.

Service changes here go from between $2000 & $3000 depending on who's doing it. If an overhead change takes you say five hours and you paid $500 for material then you made $300 an hour if you did it for $2000 and $500 an hour if you did it for $3000.

If you go in and add an outlet and your normal service charge is $100 an hour and it takes you an hour...well you understand.

You charge what the market will bear, nobody is going to pay you $300 to install one outlet.

 

[growler]

Why do I make so much more money for doing service replacements or upgrades than I do installing new receptacles or lighting? For example, besides the material costs, I can make much more money replacing a service (which takes 1 day) than I could installing however many receptacles I could install over the course of a day.

Have you ever counted how many receptacles it's possible to change out in a day and never break a sweat. Average in an empty house of 5-6 minutes. $20 ea. I have made some good money changing out receptacles. I have invoiced for almost 100 in a day doing complete change outs.

The problem is that changing out receptacles really does suck so if it were not for the money I don't think I would ever do it. :grin:

Old work recessed cans is also another place to make good money if you charge by the can and not by the hour. You can install a lot more than the customer will think in a day's time ( if you know what you are doing ).

 

[K8MHZ]

I understand your question, but I don't know the answer.

Service changes here go from between $2000 & $3000 depending on who's doing it. If an overhead change takes you say five hours and you paid $500 for material then you made $300 an hour if you did it for $2000 and $500 an hour if you did it for $3000.

If you go in and add an outlet and your normal service charge is $100 an hour and it takes you an hour...well you understand.

You charge what the market will bear, nobody is going to pay you $300 to install one outlet.

Wow!

Around here we get about a grand for a 100 amp and 1200 for a 200 amp service. If we bid any higher we wouldn't get any work. One contractor is doing simple 100 amp service upgrades for 700 bucks.

 

[GUNNING]

Woo Hoo ! new truck!

Woo Hoo ! new truck!

I cant see doing a 200 amp service for less than 2200. There is 10 or 12 afci breakers a panel meter can mast permit grounding all that costs about $1200. Then there is the TIME.
Even if its a meter combo package with mast and grounding its still about $900 in materials and permit.
Then there is the TIME...

DO this for $700?

If you buy water mellons for $1 and sell them for 99 cents the solution to your liquidity problem is not buying a bigger truck and making it up on volume.

I would subcontract the guy doing $700 services and keep him busy till he drops.

I would charge $1400 a piece for him and have him sign an exclusivity contract to do them.

Then buy a new truck.

 

[K8MHZ]

I cant see doing a 200 amp service for less than 2200. There is 10 or 12 afci breakers a panel meter can mast permit grounding all that costs about $1200. Then there is the TIME.
Even if its a meter combo package with mast and grounding its still about $900 in materials and permit.
Then there is the TIME...

DO this for $700?

If you buy water mellons for $1 and sell them for 99 cents the solution to your liquidity problem is not buying a bigger truck and making it up on volume.

I would subcontract the guy doing $700 services and keep him busy till he drops.

I would charge $1400 a piece for him and have him sign an exclusivity contract to do them.

Then buy a new truck.

No one will pay 1400 for a 100 amp service. The phone book is full of EC's that will do it for less.

FWIW, I don't do the bidding, I just work for the EC's. I do get to see the bids and hear the amounts of the others, as well. I get paid by the hour plus a little extra if I line up the job.

The market is just that cut throat here. 700 dollar guy makes his money by upselling anything and everything he can to the customers, whether they need it or not. I don't agree with his tactics.

We are still under the '05 NEC and AFCI's are not required in upgrades unless other work was done. Al we have to do is swap the panel and put up the mast, stick in a couple rods and that's it. The meter boxes and flanges are free from the POCO. Using a Homeline Valupak, we have 300 - 500 in materials and inspection fees, depending on the particulars. One guy can do an easy 100 amp upgrade alone and make a couple hundred bucks in a day in an area where many people don't make that in a week as full time jobs are very hard to come by in this area.

 

[bradleyelectric]

No one will pay 1400 for a 100 amp service. The phone book is full of EC's that will do it for less.

FWIW, I don't do the bidding, I just work for the EC's. I do get to see the bids and hear the amounts of the others, as well. I get paid by the hour plus a little extra if I line up the job.

The market is just that cut throat here. 700 dollar guy makes his money by upselling anything and everything he can to the customers, whether they need it or not. I don't agree with his tactics.

We are still under the '05 NEC and AFCI's are not required in upgrades unless other work was done. Al we have to do is swap the panel and put up the mast, stick in a couple rods and that's it. The meter boxes and flanges are free from the POCO. Using a Homeline Valupak, we have 300 - 500 in materials and inspection fees, depending on the particulars. One guy can do an easy 100 amp upgrade alone and make a couple hundred bucks in a day in an area where many people don't make that in a week as full time jobs are very hard to come by in this area.

You'd be surprised what you could sell things for if you were the first person they talked to and had good sales skills.

 

[electricmanscott]

I cant see doing a 200 amp service for less than 2200. There is 10 or 12 afci breakers a panel meter can mast permit grounding all that costs about $1200. Then there is the TIME.
Even if its a meter combo package with mast and grounding its still about $900 in materials and permit.
Then there is the TIME...

DO this for $700?

If you buy water mellons for $1 and sell them for 99 cents the solution to your liquidity problem is not buying a bigger truck and making it up on volume.

I would subcontract the guy doing $700 services and keep him busy till he drops.

I would charge $1400 a piece for him and have him sign an exclusivity contract to do them.

Then buy a new truck.

This may be valid in your area but it does not apply everywhere.

The NEC does not require AFCIs on a service upgrade.

Here the panel is usually in the basement. 10-12' of pvc up the side of the house, 200 amp meter socket, seu in to the panel, a couple rods, water bond/ground, done. Materials about $400-$500 bucks. Permit $50-$100 or so.

 

[readydave8]

I think the reason has something to do with perceived value. A service change looks expensive, so the customer is not as reluctant to pay my price. It looks hard, there's bigger stuff (meter can and/or etc., big wire).

Not saying this is logical. How does he know what 9 little bitty hockey pucks cost me to install under his top cabinets?

 

[Split Bolt]

If I could do 1 a week, I'd be a happy man!:grin:

 

[kwired]

... nobody is going to pay you $300 to install one outlet.

I installed a 200 amp 5 wire pin and sleeve receptacle one time, my cost of receptacle and enclosure was around $900, should I have only charged 300 or less:roll:

 

[Chamuit]

$2000 Load Center

I charge $1600 + Permit + AFCI's if AHJ requires.

Sometimes I can do better like this Load Center change out.

 

[flyboy]

No one will pay 1400 for a 100 amp service. The phone book is full of EC's that will do it for less.

FWIW, I don't do the bidding, I just work for the EC's. I do get to see the bids and hear the amounts of the others, as well. I get paid by the hour plus a little extra if I line up the job.

The market is just that cut throat here. 700 dollar guy makes his money by upselling anything and everything he can to the customers, whether they need it or not. I don't agree with his tactics.

We are still under the '05 NEC and AFCI's are not required in upgrades unless other work was done. Al we have to do is swap the panel and put up the mast, stick in a couple rods and that's it. The meter boxes and flanges are free from the POCO. Using a Homeline Valupak, we have 300 - 500 in materials and inspection fees, depending on the particulars. One guy can do an easy 100 amp upgrade alone and make a couple hundred bucks in a day in an area where many people don't make that in a week as full time jobs are very hard to come by in this area.

Where are you from?

 

[iwire]

Service changes here go from between $2000 & $3000 depending on who's doing it. If an overhead change takes you say five hours and you paid $500 for material then you made $300 an hour if you did it for $2000 and $500 an hour if you did it for $3000.

He does not make $300-$500 an hour, the company takes in that amount per hour ........assuming he runs the business as a business and not a hobby.

You charge what the market will bear, nobody is going to pay you $300 to install one outlet.

Of course some will, hell $300 is not that much.

 

[flyboy]

Wow!

Around here we get about a grand for a 100 amp and 1200 for a 200 amp service. If we bid any higher we wouldn't get any work. One contractor is doing simple 100 amp service upgrades for 700 bucks.

We were getting these prices 15+ years ago. Where are you from, Mexico?

 

[kwired]

$2000 Load Center

I charge $1600 + Permit + AFCI's if AHJ requires.

Sometimes I can do better like this Load Center change out.

The price of three phase load center with 150 - 225 amp main breaker is usually nearly double or more than that of single phase. 3 pole branch breakers are usually 4 or 5 times that of double pole breakers. If you filled this panel with several 3 pole breakers you would have 1000-1200 in the panel and breakers easily.