Flat rate pricing

[growler]

I define a ripoff company as one who sells you a 500.00 job but only delivers a 50.00 job

That's the way I see it. I have seen jobs that were billed at a premium rate and yet they delivered hack work. It really was a ripoff.

 

[satcom]

That's the way I see it. I have seen jobs that were billed at a premium rate and yet they delivered hack work. It really was a ripoff.

Yup, it is not the guys charging the high price, it is the ones that do not deliver the quality work and value.

 

[LarryFine]

I define a ripoff company as one who sells you a 500.00 job but only delivers a 50.00 job

Have you been listening to Bose speakers again?

 

[Ohmy]

I define a ripoff company as one who sells you a 500.00 job but only delivers a 50.00 job

Who decides that it was a $50 job? How much would you charge me to change the light bulb above my desk here in Atlanta?

But ya, I agree with you. If you get less than agreed or promised that's a ripoff. If I say I will sell you a car 2008 honda for $5,000 and it turns out its really a 2004. That's a ripoff. If you find out later that your brothers friend was selling that same car for $2,0000. That is not a ripoff.

 

[jazer]

My idea of flat rate pricing has always been...

"What do you want done?"

"How much do you have?"

:grin:

That is awesome!

 

[Electric-Light]

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.

You can get the same for less at Target or Wal-Mart compared to mom and pop shop and you can get better prices on some stuff at Home Depot or Lowe's than your supply houses because of economies of scale and low overhead. You don't get more because you pay more, you pay more because you're paying for their overhead.

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.

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.

I think you can charge what you want if you're deceptive and clearly out to rip people off, but for the exact same work done to same specifications and responsiveness and you happen to be the highest because you have the highest overhead, customers who know what they're doing won't pick you.

Getting the same work in same time frame is more or less the goal of competitive bidding.

 

[brantmacga]

I think you can charge what you want if you're deceptive and clearly out to rip people off, but for the exact same work done to same specifications and responsiveness and you happen to be the highest because you have the highest overhead, customers who know what they're doing won't pick you.

Getting the same work in same time frame is more or less the goal of competitive bidding.

The problem with your logic is that all contractors should receive equal pay; the only difference in cost being the overhead.

Whether you realize it or not, that's exactly what you just said.


My goal is to sell the same job at a higher price with less overhead and more profit. Its not because I'm trying to rip someone off, I just want to make more money.

There is no such thing as ripping someone off unless you deceive them. You are allowed to charge whatever your heart and costs desire, and its the customers choice on whether or not they employ you.

 

[Electric-Light]

The problem with your logic is that all contractors should receive equal pay; the only difference in cost being the overhead.

Whether you realize it or not, that's exactly what you just said.


My goal is to sell the same job at a higher price with less overhead and more profit. Its not because I'm trying to rip someone off, I just want to make more money.

There is no such thing as ripping someone off unless you deceive them. You are allowed to charge whatever your heart and costs desire

That's what I meant. I left out the word "not". I meant you can charge whatever you feel like charging as long as you're NOT deceptive in the process.

its the customers choice on whether or not they employ you.

Yep, which is why buyer should have some guidelines when soliciting bids, so that they minimize the chance of getting a hack. The goal is to get the most for the money(well the "customer" depends on which side you're playing.. i.e. insurance company side and carpenter side have different goals) Couple requirements here and there defines if its the same job or not and how much discretion the contractor have in their proposal.

Buyer may not be certain about the exact requirements when they're getting something, however they can still ask set requirements on something they really care about before asking for quotes/bids like add "shall have a SEER rating of no less than xx.x, warranty shall cover xx labor/ parts" "cabinets shall be made of (name material here)", "lamps must be RE80, manufactured by GE, OSI or Philips", etc. If you don't specify it, you might end up with second or third class materials or labor.

 

[satcom]

I think you can charge what you want if you're deceptive and clearly out to rip people off, but for the exact same work done to same specifications and responsiveness and you happen to be the highest because you have the highest overhead, customers who know what they're doing won't pick you.

That is what they said when the flat rate guys with high prices moved in our area and all the old thinking, went out the window, when they got the lions share of work, today just a few short years later, they are still getting the lions share of work, and the guys that the customers will never use them, are out on the street, still saying but! but! but! no one will use them, think what you want but they are busy, and the guys with the cheap prices are gone.

 

[Finite10]

That is what they said when the flat rate guys with high prices moved in our area and all the old thinking, went out the window, when they got the lions share of work, today just a few short years later, they are still getting the lions share of work, and the guys that the customers will never use them, are out on the street, still saying but! but! but! no one will use them, think what you want but they are busy, and the guys with the cheap prices are gone.

Is it advertising that gets the flat rate contractors in, or what do they do to get asked for bids? And do they have a true salesman, or does the owner/master electrician meet the customer, and see the job?

We gave 'not to exceed bids' and would have an 'unforeseen' clause in case the paddle fans were hung on plastic boxes or whatever. We used to have loyal customers, but no more...

Do flat rate contractors hire salesman electricians primarily, or good experienced mechanics?

 

[bradleyelectric]

I notice everyone had their own idea of what flat rate pricing is, flat rate pricing is nothing more then presenting the customer with a total price to do a job, the guys that call their service people a tech, and pay them on a bonus system, are at best, in most licensed states an illegal operation, many contractors give a contract price, with a total amount for the job, a (flat rate) their employees are not paid on sales amounts, they are paid an hourly rate, or salary.

Can you please explain this comment?

 

[bradleyelectric]

In some states the electrical contractor license laws require the person doing the work, to be an employee, not an independent contractor, and some of the flat rate systems suggest they use independent contractors rather then employees, and some have excessive rates which would not fly with most consumer affairs departments.

Oh, your assuming because they are called techs instead of "my guys" they are subs and slesmanship and profit are bad things. OK

 

[Split Bolt]

I see flat rate pricing as another method of getting at the same result: a fair price. I prefer to figure my bids on more of a T&M basis because that's what works for me. I can't believe the end result would be that much different either way. Finite mentioned "not-to-exceed bids." Now that's trouble waiting to happen! A client once told me he wanted me to do a job T&M with a not-to exceed price. I just laughed and pointed-out that if everything goes perfectly, he wins and if there are problems, I lose! Then I said he was basically saying to me: "let's flip a coin...heads I win, tails you lose!" Homey don't play that!

 

[Rewire]

I see flat rate pricing as another method of getting at the same result: a fair price. I prefer to figure my bids on more of a T&M basis because that's what works for me. I can't believe the end result would be that much different either way. Finite mentioned "not-to-exceed bids." Now that's trouble waiting to happen! A client once told me he wanted me to do a job T&M with a not-to exceed price. I just laughed and pointed-out that if everything goes perfectly, he wins and if there are problems, I lose! Then I said he was basically saying to me: "let's flip a coin...heads I win, tails you lose!" Homey don't play that!

Flat rate is not really for replacing bid jobs but as a pricing method for service work and upsells. The main disadvantage to a T&M job is you are limited to the number of "hours" you can sell.

 

[IrishRugger]

Just an update on some flat rate pricing quotes I gave. Havent heard on the one I posted, but since I posted I gave other quotes as well and this morning I got the go ahead for two out of four that I gave in the last week. These are small jobs but but giving flat rate pricing for these real small jobs has given me some practice with salesmanship and quoteing small jobs. If I get the other two I'll be doing ok for this half of the month.

 

[satcom]

Flat rate is not really for replacing bid jobs but as a pricing method for service work and upsells. The main disadvantage to a T&M job is you are limited to the number of "hours" you can sell.

We have been using the flat rates to bid with for many years, with good results, flat rate is developed from an estimated price for a task or group of tasks, you should have n problem bidding with a flat rate assembly.

 

[Rewire]

We have been using the flat rates to bid with for many years, with good results, flat rate is developed from an estimated price for a task or group of tasks, you should have n problem bidding with a flat rate assembly.

I didn't say it couldn't be done just why would you want to.

 

[satcom]

I didn't say it couldn't be done just why would you want to.

I want to use the rates because they are developed from our job actuals data, which is recent and accurate job data, flat rate is nothing more then a contract price for a given task or group of tasks.

 

[Finite10]

... Finite mentioned "not-to-exceed bids." Now that's trouble waiting to happen! A client once told me he wanted me to do a job T&M with a not-to exceed price. I just laughed and pointed-out that if everything goes perfectly, he wins and if there are problems, I lose! Then I said he was basically saying to me: "let's flip a coin...heads I win, tails you lose!" Homey don't play that!

Good point, I agree. These were decades old customers who needed a budgetary number. A little different situation maybe for my former employer.

What is a good estimating software for giving flat rate bids? Preferably cheap and easy for a new EC to get going on?

 

[Ohmy]

Flat Rate Pricing simple put....allows a worker to get paid for what he produces rather than the time if took him to produce it.

In my opinion flat rate/piecemeal/bid pricing is the most honest, fair, moral, and intelligent way to pay for services. Paying by the hour ignores hard-work, efficiency, skill, planning, and diligence and rewards waste. Men that work by the hour are slaves. They sell their time, their life, rather than their work.