i still don't get how anyone can just assume if you use flat rate pricing you use independant contractors and automatically overchage people...we use flat rate pricing all the time...besides, if the board of electrical contractors (an entity of which i have never heard to exist) wants to put me on "DOUBLE SECRET PROBATION" i will survive...
Flat rate pricing
- Thread starter IrishRugger
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i still don't get how anyone can just assume if you use flat rate pricing you use independant contractors and automatically overchage people...we use flat rate pricing all the time...besides, if the board of electrical contractors (an entity of which i have never heard to exist) wants to put me on "DOUBLE SECRET PROBATION" i will survive...
Who said everyone using flat rate uses independent contractors, I have used flat rate pricing for years, with employees, what I said was some of the flat rate operators use contract help, and pay them on a sales bonus, In my state it is illegal for licensed electrical contractors to use independent contractors, unless they are also licensed.
This fan heater job took 6 hours, there was no access above, we had to tear out the ceiling, the duct was installed with kinks, and had to be replaced, the wiring was short and had to fish a new cable, replace celing, this is common in old work, about 50% of the fan replacements are hours not minutes.
Ruff-N
Member
Thats why I gave up working on residential, and commercial electrical, industrial wasn't to bad, and started working electric utilities, but then if its not freezing cold its hotter as all out, but hey NO INSULATION!
Ruff-N
Member
I goggled "Board of Electrical Contractors" and what comes up is for example in Texas Texas Department of Licensing and Regulations. But I dont think they can take anyone to court over this so called "price gouging"
brantmacga
Señor Member
- Location
- Georgia
- Occupation
- Former Child
we do hourly base plus commission. i think a lot of contractors do the same.
I also believe they do, we have annual profit sharing plan. both ways seem to work.
brantmacga
Señor Member
- Location
- Georgia
- Occupation
- Former Child
I read a thread similar to this on a "drywall" forum, I think it was titled "Piece Work"
laugh all you want, but a service tech who is not only a good electrician but a great salesperson can make a darn good living on commission.
Ohmy
Senior Member
- Location
- Atlanta, GA
Since this thread is highjacked. Here are three questions concerning concepts that are argued when discussing "flat rate pricing."
1. Why are the "ripoff companies" the ones with the most customers?
2. What is fairer? Paying a man for what he produces or for how long it took him to produce it?
3. Should an item/service be priced at its value to the customer or its cost to the provider?
1. Why are the "ripoff companies" the ones with the most customers?
2. What is fairer? Paying a man for what he produces or for how long it took him to produce it?
3. Should an item/service be priced at its value to the customer or its cost to the provider?
Define what you are calling a rip off company, is it a company that charges to cover their costs of operating and a decent profit, to pay their investors a nice return, and their employees a decent salary with bonuses and benifits, or is it a state of mind thing that just because someone is giving away their services? , or anyone else charging more is a rip off?
Our state consumer board feels if anyone charges more then the average charge, they are ripping off the public, our board of electrical contractors, take the same view, with this backwards thinking, we should just make electrical work a social service, and provide it to everyone for free,
Electric-Light
Senior Member
Smart customers will figure it out.
Not everyone does flat rate, so they'll get a few bids or if they're homeowners, RFQs. If its a complex and time consuming for the type of task where flat rate will end up being cheaper, they'll choose you.
If its simple stuff, the customer will go with traditionally priced contractor.
Getting around 3 bids or RFQs offer significant savings.
For major 5-6 figure jobs, the final expense can be reduced significantly until about five bids, and anything more than 5, the return is diminishing.
Not everyone does flat rate, so they'll get a few bids or if they're homeowners, RFQs. If its a complex and time consuming for the type of task where flat rate will end up being cheaper, they'll choose you.
If its simple stuff, the customer will go with traditionally priced contractor.
Getting around 3 bids or RFQs offer significant savings.
For major 5-6 figure jobs, the final expense can be reduced significantly until about five bids, and anything more than 5, the return is diminishing.
brantmacga
Señor Member
- Location
- Georgia
- Occupation
- Former Child
"major jobs" isn't the typical call for a flat-rate service company; well at least not us. Our calls are things like changing devices, fixtures, troubleshooting, adding recessed lights, etc. . .
Our average call is around $500, and takes about two hours on-site. We don't do much of anything that takes longer than one day in the service division.
Of course there are exceptions but for the most part those numbers don't change.
Also, most of our residential customers are working professionals who don't have time to get multiple contractors in to give them a price. They just want to know what it will cost and how long it will take. And for troubleshooting calls, there is practically zero shopping; something is broken and they need it fixed immediately.
As for the customer prefers, its been my experience that they would rather have a professional who can tell them exactly what it costs rather than a bumbling monkey throwing out estimates.
Lastly, for bidding "5-6 figure jobs", that's not what flat-rate contracting is. Its for service work. One would be insane to quote a $100k job with a flat-rate book, as your price would be astronomically higher. Flat-rate prices take into account the fact that you're running 2-5 jobs per day and their associated costs (fuel, travel, etc. . .). We bid those just like anyone else.
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Ohmy
Senior Member
- Location
- Atlanta, GA
Define what you are calling a rip off company, is it a company that charges to cover their costs of operating and a decent profit, to pay their investors a nice return, and their employees a decent salary with bonuses and benifits, or is it a state of mind thing that just because someone is giving away their services? , or anyone else charging more is a rip off?
Our state consumer board feels if anyone charges more then the average charge, they are ripping off the public, our board of electrical contractors, take the same view, with this backwards thinking, we should just make electrical work a social service, and provide it to everyone for free,
I think a ripoff company is anyone who charges more than the bare minimum to keep the doors open and the lights on. If you pay good wages, live in a house as nice as your customers, or drive a nice truck, you are probably a ripoff company. People have a right to our work and should only have to pay the bare minimum to keep us in business. Our goal as a "good" company is to make sure everyone gets nice electrical work at the cheapest possible price even if that means me living in a little house in the country and my wife working 50 hours a week and my kids not getting to go to college.
Doesn't everyone agree? This is what I've been taught by EC my whole life.
IrishRugger
Senior Member
Oh how mangnanumus of you. Who in the world gave you the idea that you, your wife, and kids have to sacrifice to suit others.
I certanly do not agree with over charging customers. I do believe in proposing prices that cover my costs of doing a safe and nice job, and allow for the earning of a profit.
I take pride in my work, and I am consciencious of every thing I do. I believe it is divinely mandated that my family should reap the benefits of my God given talents. We are not supposed to be mediocre. Earning a profit does not make anyone bad, it's how you do it and what you do with those earnings that count.
Rewire
Senior Member
- Location
- Lake of the Ozarks
I define a ripoff company as one who sells you a 500.00 job but only delivers a 50.00 job
Ruff-N
Member
IMO you structure your rates according to what the market is in your area. Example: You would have differant rates for say residential in Texas, Florida, or New York and this is not ripping someone off, whether you use flat rate pricing or not, the frp software, downloads, books etc. are avalible to everyone in this country, but you would use a differant labor and material multiplier according to the area you are working in. If you are giving competive bids using whatever method suits you then you can expect to stay right there in the contracting business. Now I have heard from some in the EC business say "Well, I don't want to do that job but I don't want to lose that GC, so to get them off my back I will bid way way high" IMO that is wrong and a good way to price yourself out of business. But then again you don't want to lowball or undercut anyone by always having the lowest bid, bad practice, the winning bids are in the top percentage those in the middle, not the lowest or the highest. JM2cW
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
This Country is GREAT. We can use any method we like to come up with a price we will perform a job for and the market will determine whether or not it will buy our price.
That is about it.
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