Does anybody else have a problem with supply house giving you a price on lights,gear?
- Thread starter sgr1
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barbeer
Senior Member
- Location
- Pinellas County, FL
I have had the problem because of the business of my salesman, not because they are waiting for a higher commodities price. But I can imagine that happens all too much these days.
Rewire
Senior Member
- Location
- Lake of the Ozarks
I will see today as I am sending the gear schedile to the supply house today
This is a very common practice among supply houses. More often than not it’s the lighting reps who hold the number till the last minute, but the gear reps will also do it.
The idea is if they give you the number at the very last minute you will not have time to shop it, or if it’s a specified package, you will not have time to put together an alternate package. This is also the reason that most lighting reps wont give out unit prices, and some supply houses wont break apart the gear and fixtures on bid day.
The idea is if they give you the number at the very last minute you will not have time to shop it, or if it’s a specified package, you will not have time to put together an alternate package. This is also the reason that most lighting reps wont give out unit prices, and some supply houses wont break apart the gear and fixtures on bid day.
It doesn't matter what time you tell them. They KNOW when the jobs bid, when they've been postponed, etc. If you you happen to get a price early, it's only to appease you, and that price is what they call "street price". There will be a final cut price at the last second anyway, so you should always be prepared to quote the job at the last minute.
That's just the way it is.
That's just the way it is.
john_axelson
Senior Member
- Location
- MN
Yep, happens here too
Yep, happens here too
The best advice I can give you is to take the extra step and talk to the lighting rep and ask them when they will be quoting the proeject. If (now I said if) you have a reputation for shopping bids after the fact or arbitrarily cut the gear/fixture price by a certain percentage, you can bet your number will ALWAYS be last minute, if at all.
Yep, happens here too
The best advice I can give you is to take the extra step and talk to the lighting rep and ask them when they will be quoting the proeject. If (now I said if) you have a reputation for shopping bids after the fact or arbitrarily cut the gear/fixture price by a certain percentage, you can bet your number will ALWAYS be last minute, if at all.
tlaidman
Member
- Location
- Cleveland Ohio
They will hold their prices till the last minute to prevent other suppliers from getting their price and undercutting them
LarryFine
Master Electrician Electric Contractor Richmond VA
- Location
- Henrico County, VA
- Occupation
- Electrical Contractor
You can always get a back-up price from a big-box store for yoyr quote. How much cheaper can the suppliers's price be? If the supplier's price ends up less, you have more profit; if not, don't buy the stuff there.
MF Dagger
Senior Member
- Location
- Pig's Eye, MN
1 million dollars.ITO said:
cadpoint
Senior Member
- Location
- Durham, NC
- Occupation
- Electrician - but not by NC Law.
I miss Bid Days, we use to get a free lunch that day : ? !
LarryFine
Master Electrician Electric Contractor Richmond VA
- Location
- Henrico County, VA
- Occupation
- Electrical Contractor
My bad. :roll: When I saw "lights and gear", my mind went to recessed fixtures and trims and stuff.ITO said:
Okay, new answer:
Give the supplier a deadline to get your quote to you. They must have competition where you live.
I have been writing a PM manual for about a year now, here is an excerpt about fixture markups and last minute quotes.
Pricing- We mostly buy our fixtures through a supply house who buys them trough a fixture distributor who works directly with the manufacturer. The fixture distributors (AKA Fixture Reps) have agreements with many different fixture manufactures and even multiple agreements for different fixture lines within that manufacture. With each fixture line there is a specific agreement which only gets more complicated when they put them all together. Here is an example:
Fixture-A $85
The agreement states that this fixture may only be marked up 30% and anything over that they have to give the manufacture half. Example: If the fixture is marked up 50% they keep the first 30% then split then next 20% 50/50 with the factory.
Fixtue-B $72.
The agreement states the fixture may not be marked up more than 12%, all mark up more then 12% goes back to the manufacture.
Fixture-C $65
No deals, mark it up as much as you want.
Fixture-C $65
Easy deal, mark up as much as they want but have to give 5% of the markup back to the factory.
Fixture-D $150
The first 100 are at 15% for them and 10% for factory, the next 200 are at 10% for them and 5% for the factory, and they next 500+ are the Rep keeps all the mark up. This could also be a yearly deal were the fixture counts accumulate over many jobs for a fiscal year.
Sometimes there are front end deals for some fixture lines that are for large quantities. Example if they order more than 2000 units of ?C? will modify the buying and selling deal on fixture B and so on, or there may be a rebate program where if they hit a certain sales volume they get X% of the whole deal back.
This is s nutshell of an explanation but this is what goes on behind the scene and how much thought they put into their packages to max out their profit.
It just keeps getting more complicated but you get the point and this should explain why on most hard bid jobs you won?t get a pricing breakout for fixtures on bid day and even if you get one on PO good luck making a change. If you were to VE out just one fixture line from their package it could be the one line they have all their profit stuffed, or it could screw up a big rebate they are expecting.
So they take their convoluted bloated price and send it to the supply house five minutes before bid time, who marks it up 5%-15% then you get it two minutes before bid time and mark it up 15%, then the GC puts his 12% on it and the owner gets his fixtures.
But before all this happens its important to know how they got to that package and just how much they have invested in the project before the bid sets ever even hit the streets.
Step-1 An owner wants to build a project, hires an architect comes up with a concept drawing maybe a general square footage and secures budget numbers from other projects he has built or from guys like me and you who help them come up with a budget to get their loan process started. Once a budget and a loan agreement have been settled the owner goes into contract with an architect for a full blown design. There are many variations on this but the idea is an owner starts out with very rudimentary drawings to develop a budget, or maybe starts with a budget and develops some very rudiment drawings. You get the idea they start the process with a budget in mind and a general design.
Step-2 The architect, engineers, and owners then spend far more time designing the project then you or I will get to actually built it, but that is beside the point. Architects are on a contract just like we are and they are not afraid to sub portions of their work out to others to save a buck. This is where the fixture distributors and reps come in, and this is how they make their money. These guys get involved on the front end of a project and will do complete layout, design, specifications, photometrics and even provide fixture samples and free trips to Hawaii and even though they completely deny it, they sometimes provide cash rebates to architects too. Did I forget to mention the fixture reps don?t charge a dime for this service?
For an architect this is a win win deal, they get a portion of their contract done not only for free but if they agree to hold the spec (?hold the spec? means to not allow substitutions), on the fixtures they may get a prize too.
There is a variation on this where a ?lighting designer? gets involved and they to have special relationship with fixture reps only they make it look like they are doing all the work which sometimes they do some special sales work and neat presentations but not often and then actually charge the owner for this design work service then go on the trip to Hawaii with the fixture Reps.
Step3- After the architect spends up his budget he will declare the design as complete enough for bid (called bid documents) and puts the project on the street for bid from guys like you and me. Now if you will note, nowhere on the plans do these words appear, ?or approved equal? near the fixture schedule or in the specifications. This is pretty standard on most plans and sometimes the architect will even go so far as to say ?NO SUBSTITUTIONS?. On the rare occasion that ?or approved equal? appears next the fixture schedule, its probably because the fixture rep did not have time to do the layout and the Architect had to do it himself.
Step 4- You get the plans and start working up a proposal, and put the gear and fixtures packages out to bid. If you are expecting a fixture number some time earlier than 5 minutes before the bid deadline you can forget it; even though they have no competition they will hold their number close to their chest until the last possible minute to keep you from analyzing it. Why? think about it, they have no competition, and have a complete lock on the job. What is the point of holding that quote to the last minute other than to keep you from looking at it?
The reason is they do not want you to look to closely at the number because of one or more of the following reasons:
a) They are not holding the budget they promised the architect. This is a part of the project where they stuff the package with as much fat as they think they can get away with and hope it goes through to contract and PO. Which often enough it does go thought like this and is a major part of their business model.
b) They don?t want you to realize how much they have stuffed in their price an do not want to give you an opportunity to offer a cheaper substitute package on bid day when the owner is paying attention.
c) They don?t want us to have time to compare notes because not all of us get the same price. (This is also whey the supply houses would prefer to lump gear and fixture prices together).
Step-5 Some poor EC left something big off his bid and gets the contract, with the specified package, issues a PO to the supply house for their package, and the fixtures guys make more in profit on that one sale then you will make off the whole two year job you just contracted to do AND you get to pay them to fix or replace any fixtures that were damaged in shipping or you lost yourself.
Pricing- We mostly buy our fixtures through a supply house who buys them trough a fixture distributor who works directly with the manufacturer. The fixture distributors (AKA Fixture Reps) have agreements with many different fixture manufactures and even multiple agreements for different fixture lines within that manufacture. With each fixture line there is a specific agreement which only gets more complicated when they put them all together. Here is an example:
Fixture-A $85
The agreement states that this fixture may only be marked up 30% and anything over that they have to give the manufacture half. Example: If the fixture is marked up 50% they keep the first 30% then split then next 20% 50/50 with the factory.
Fixtue-B $72.
The agreement states the fixture may not be marked up more than 12%, all mark up more then 12% goes back to the manufacture.
Fixture-C $65
No deals, mark it up as much as you want.
Fixture-C $65
Easy deal, mark up as much as they want but have to give 5% of the markup back to the factory.
Fixture-D $150
The first 100 are at 15% for them and 10% for factory, the next 200 are at 10% for them and 5% for the factory, and they next 500+ are the Rep keeps all the mark up. This could also be a yearly deal were the fixture counts accumulate over many jobs for a fiscal year.
Sometimes there are front end deals for some fixture lines that are for large quantities. Example if they order more than 2000 units of ?C? will modify the buying and selling deal on fixture B and so on, or there may be a rebate program where if they hit a certain sales volume they get X% of the whole deal back.
This is s nutshell of an explanation but this is what goes on behind the scene and how much thought they put into their packages to max out their profit.
It just keeps getting more complicated but you get the point and this should explain why on most hard bid jobs you won?t get a pricing breakout for fixtures on bid day and even if you get one on PO good luck making a change. If you were to VE out just one fixture line from their package it could be the one line they have all their profit stuffed, or it could screw up a big rebate they are expecting.
So they take their convoluted bloated price and send it to the supply house five minutes before bid time, who marks it up 5%-15% then you get it two minutes before bid time and mark it up 15%, then the GC puts his 12% on it and the owner gets his fixtures.
But before all this happens its important to know how they got to that package and just how much they have invested in the project before the bid sets ever even hit the streets.
Step-1 An owner wants to build a project, hires an architect comes up with a concept drawing maybe a general square footage and secures budget numbers from other projects he has built or from guys like me and you who help them come up with a budget to get their loan process started. Once a budget and a loan agreement have been settled the owner goes into contract with an architect for a full blown design. There are many variations on this but the idea is an owner starts out with very rudimentary drawings to develop a budget, or maybe starts with a budget and develops some very rudiment drawings. You get the idea they start the process with a budget in mind and a general design.
Step-2 The architect, engineers, and owners then spend far more time designing the project then you or I will get to actually built it, but that is beside the point. Architects are on a contract just like we are and they are not afraid to sub portions of their work out to others to save a buck. This is where the fixture distributors and reps come in, and this is how they make their money. These guys get involved on the front end of a project and will do complete layout, design, specifications, photometrics and even provide fixture samples and free trips to Hawaii and even though they completely deny it, they sometimes provide cash rebates to architects too. Did I forget to mention the fixture reps don?t charge a dime for this service?
For an architect this is a win win deal, they get a portion of their contract done not only for free but if they agree to hold the spec (?hold the spec? means to not allow substitutions), on the fixtures they may get a prize too.
There is a variation on this where a ?lighting designer? gets involved and they to have special relationship with fixture reps only they make it look like they are doing all the work which sometimes they do some special sales work and neat presentations but not often and then actually charge the owner for this design work service then go on the trip to Hawaii with the fixture Reps.
Step3- After the architect spends up his budget he will declare the design as complete enough for bid (called bid documents) and puts the project on the street for bid from guys like you and me. Now if you will note, nowhere on the plans do these words appear, ?or approved equal? near the fixture schedule or in the specifications. This is pretty standard on most plans and sometimes the architect will even go so far as to say ?NO SUBSTITUTIONS?. On the rare occasion that ?or approved equal? appears next the fixture schedule, its probably because the fixture rep did not have time to do the layout and the Architect had to do it himself.
Step 4- You get the plans and start working up a proposal, and put the gear and fixtures packages out to bid. If you are expecting a fixture number some time earlier than 5 minutes before the bid deadline you can forget it; even though they have no competition they will hold their number close to their chest until the last possible minute to keep you from analyzing it. Why? think about it, they have no competition, and have a complete lock on the job. What is the point of holding that quote to the last minute other than to keep you from looking at it?
The reason is they do not want you to look to closely at the number because of one or more of the following reasons:
a) They are not holding the budget they promised the architect. This is a part of the project where they stuff the package with as much fat as they think they can get away with and hope it goes through to contract and PO. Which often enough it does go thought like this and is a major part of their business model.
b) They don?t want you to realize how much they have stuffed in their price an do not want to give you an opportunity to offer a cheaper substitute package on bid day when the owner is paying attention.
c) They don?t want us to have time to compare notes because not all of us get the same price. (This is also whey the supply houses would prefer to lump gear and fixture prices together).
Step-5 Some poor EC left something big off his bid and gets the contract, with the specified package, issues a PO to the supply house for their package, and the fixtures guys make more in profit on that one sale then you will make off the whole two year job you just contracted to do AND you get to pay them to fix or replace any fixtures that were damaged in shipping or you lost yourself.
cadpoint
Senior Member
- Location
- Durham, NC
- Occupation
- Electrician - but not by NC Law.
ITO, Very Nice Read! Very nice observations on the suppliers side and their prices as well.
But might I add a few obserserations and comments. There are various State Laws about accepting pay-oh-lay, as usual it seems so straight forward in the East and kind of opens up in the West. While all State Laws very as to holding a professional seal. I will guess that most contain the near same language about what was pointed out here, frankly I thought is was very dark assement in any case.
Frankly I can't believe you didn't even mention "Design Build" in this passage! This turns the architect into just another solicited discipline. Who ever the client goes to "get it done" is of their choosing, but as always buyer beware.
Variuos state(s) laws again also come into play as to the limits of what thier professional seal can do for a particular application. It really doesn't matter who the clients gets to start a job, be it a GC, design builder, whomever. They "all" have their price, and it will depend on what the job needs are and they all price accordingly(hopefully). Theres all type of combinations of who's wearing the big hat or shoes per each job.
On a personal note I have a strong distaste for Design Build because is shifts who controls the job, and in some cases turns the tables around and not always to the owner's benefit. In the continued thought you don't let the GC engineer it, they don't architect it, they should just apply it.
For instance by Law in my state, I could be a broker or agent for a client
I'm not the GC, I'm not a designer. But I do have to identify that I am the Broker for said job.
Part 1- Your describing what they call in the trade, Design Development. Or DD's (or design documents) this will include all pricing being created on the board or through use of various disciplines, IE a paper trail.
What I recall from my board days it took three applications of official presentations or meetings to get the paper, "Sold". The price of all services is gathered at this time, including shopping for a price of service from various disciplines.
The numbers are compiled, the discipilines are selected and the project goes forward.
Part 2 - Your describing the Construction Documents or CD's. This is where all disciplines are creating there own paper under the umbrella of the controller (Architect or GC/design builder/broker).
Again , what I recall, this again from my board days it is usually a four to five submittal process to the owner, the other disciplines don't show their paper till after the second or third presentation and goes on to show and highlight conflicts in the job, and other problems that have to be worked out, those requiring more edits. (thats why I like electrical work, its more of a one time deal, and its done)
While there is no, Part 3 - the CD's will turn into the Sealed documents or construction documents. ( beleive iI got that right)
I'm talking building big job's over-all here! I wanted to say a size but what might be Big to some would be small to others.
Hopefully everyone understands their own Limits of Big!
But might I add a few obserserations and comments. There are various State Laws about accepting pay-oh-lay, as usual it seems so straight forward in the East and kind of opens up in the West. While all State Laws very as to holding a professional seal. I will guess that most contain the near same language about what was pointed out here, frankly I thought is was very dark assement in any case.
Frankly I can't believe you didn't even mention "Design Build" in this passage! This turns the architect into just another solicited discipline. Who ever the client goes to "get it done" is of their choosing, but as always buyer beware.
Variuos state(s) laws again also come into play as to the limits of what thier professional seal can do for a particular application. It really doesn't matter who the clients gets to start a job, be it a GC, design builder, whomever. They "all" have their price, and it will depend on what the job needs are and they all price accordingly(hopefully). Theres all type of combinations of who's wearing the big hat or shoes per each job.
On a personal note I have a strong distaste for Design Build because is shifts who controls the job, and in some cases turns the tables around and not always to the owner's benefit. In the continued thought you don't let the GC engineer it, they don't architect it, they should just apply it.
For instance by Law in my state, I could be a broker or agent for a client
I'm not the GC, I'm not a designer. But I do have to identify that I am the Broker for said job.
Part 1- Your describing what they call in the trade, Design Development. Or DD's (or design documents) this will include all pricing being created on the board or through use of various disciplines, IE a paper trail.
What I recall from my board days it took three applications of official presentations or meetings to get the paper, "Sold". The price of all services is gathered at this time, including shopping for a price of service from various disciplines.
The numbers are compiled, the discipilines are selected and the project goes forward.
Part 2 - Your describing the Construction Documents or CD's. This is where all disciplines are creating there own paper under the umbrella of the controller (Architect or GC/design builder/broker).
Again , what I recall, this again from my board days it is usually a four to five submittal process to the owner, the other disciplines don't show their paper till after the second or third presentation and goes on to show and highlight conflicts in the job, and other problems that have to be worked out, those requiring more edits. (thats why I like electrical work, its more of a one time deal, and its done)
While there is no, Part 3 - the CD's will turn into the Sealed documents or construction documents. ( beleive iI got that right)
I'm talking building big job's over-all here! I wanted to say a size but what might be Big to some would be small to others.
Hopefully everyone understands their own Limits of Big!
Last edited:
cadpoint said:
That was just a small excerpt from most of the various ways lighting packages are bought to the table, I have a chapter for Design Builds too, but that is still in progress and there are still a few lessens I need to learn the hard way before that one is done.
To be honest I edited quite a bit out, and still have some reservations about sharing too much info, and you are absolutely correct about the drawing stages, I may reword that passage to drawing stages in lieu of the "steps" that were used, that was a really good idea.
Dark you say? Cynical maybe? Yeah, maybe a little...
sparkyjim
Member
- Location
- Dallas, TX
I hope I get an opportunity to read more of your "musings" (as long as you don't think your Marcel ProustITO said:
) Surprisingly few contractors understand that end of the process. And in a real competitive bid when you ask for a break out of the #'s you find out who brokered deals direct with the reps.
- Status