Friends with another electrical contractor

[Buck Parrish]

He's sending some work my way thats either to far for him,or he's just too busy to get to when they need it done.So he mentioned me keeping 75% and he keeps 25%.Do you think this is fair?Is there anything i should do to CMA?Thank you for your advice!

He must think you are gullable. Like 480sparky said, we help each other out. If I can't get to some thing. I'll recomend a freind. And they do the same for me.
Some times if it is a real profitable job. When I am finished I'll have him meet me for dinner. And I'll pick up the tab.

 

[Brady Electric]

Friends with another electrical contractor

What a FRIEND?
Looked up friend in the dictionary and one of the answers was: "a person that aids or favors something" In his case he favors 25%.
Seriously some of us here do the same but would never charge anything. If it is work we cant get to we wouldn't make anything anyway.
But on the other hand if you don't have any work 75% is better than nothing.
He needs to learn the meaning of Semper Fi.
Have a Merry Christmas and Semper Fi Buddy

 

[ptonsparky]

I helped another electrical contractor out a few weeks ago. He got in over his head on a zoned hot water heating system. He gave me a $100 gift card to the local big box, plus I sent my bill to the plumber. Wrong control and plumbed wrong.

 

[growler]

That would be scenario #2.

#2 He has already done all the leg work and sold the job to the customer for a good price and just doesn't have time to do the work.

A job that's already sold is worth something because there was an investment made by the original EC to get to this stage. Advertising, travel & fuel, time to look the job over, time to estimate labor & materials.

If you can pay him for time invested and still make your normal amount of profit there should be no problem. As bradleyelectic says it's like hiring a sale dept.

 

[charlietuna]

They are far and few between from what i've found out ! I had three that I could trust to properly service my customers--bet i went through ten to find them. It's nice to have them when your a small contractor for emergencies and I always returned the favor ! I have been asked to do some "KICKBACK" type work for other EC's, but always felt the customer was the one getting the shaft on this arrangement--and i had a reputation to maintain.... I had one buddy get into a major problem in a mall project and i knew he was loosing his butt--I explained it to my men -- we worked for him over a weekend and got the job ready for a Monday inspection--never sent him a bill! He would have done the same for me!

 

[ITO]

If the other guy has done all the legwork and sold the job, then a commission of 20% of the profit sounds fair.

 

[frenchelectrican]

This set up what I useally do with few of the EC's in my area we useally trade a favor in specal situation or something is out of my scope i send it one of the EC and later on the time one of EC did not have time do something on that spot and he returned the favor to me and No i did not charge him on this matter and work out really good.

Merci,Marc

 

[220/221]

Depends on the details.

If I was able to add his 25% on top of my price, I'd do it.

If he bills the customer and collects, he can add whatever he wants.

 

[Greg Swartz]

Not a chance!

Not a chance!

... Like 480sparky said, we help each other out. If I can't get to some thing. I'll recomend a freind. And they do the same for me.
Some times if it is a real profitable job. When I am finished I'll have him meet me for dinner. And I'll pick up the tab.

Agreed!

I have 2 ECs that I give work to when I am too busy... And I have had ECs call me...
No kickbacks... no charges... no 25%... just EC to EC... It is a good relationship to have.
I won't pay for the job. Can't guarantee that there is a profit...

Greg

 

[petersonra]

25% of your margin seems fair.

 

[jrannis]

25% of your margin seems fair.

I disagree. 5%, max 10% of the gross margin would be about what you can afford unless it was really an unusual project

 

[Minuteman]

Agreed!

I have 2 ECs that I give work to when I am too busy... And I have had ECs call me...
No kickbacks... no charges... no 25%... just EC to EC... It is a good relationship to have.
I won't pay for the job. Can't guarantee that there is a profit...

Greg

I agree!

Before my brother-in-law Paint Contractor divorced my sister-in-law, I recommended him for a job with a very good GC of mine. He came over and asked me how much I wanted 15%, 20%? I told him to bid it and leave me out. Best thing he could do was to get the job and do it right.

BTW, he did not get the job nor has he ever worked for that GC.

 

[petersonra]

I disagree. 5%, max 10% of the gross margin would be about what you can afford unless it was really an unusual project

Think about what you would be paying a commissioned sales rep. 25% of the margin is probably about right. I would bet the margin on a typical residential project is no more the 30% of the total price anyway. So he would be getting perhaps 7 or 8 % of the sales price. If you think that your profit in such a circumstance is too low, raise your price enough to cover the commission.