GCs with their hands out

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jjhoward

jjhoward

Senior Member
Location
Northern NJ
Occupation
Owner TJ Electric
Recently 2 GCs have asked me to "put $200 on it for me" when talking about a service upgrade job at a residence that they brought me to for other work initially.
Case 1 (GC1): Kitchen installer contractor telling me if there is a service upgrade at some future kitchen job, "put $200 on it for me". Explaining to me how he spends enourmous effort and $s advertising to get this jobs. This GC and I have only worked the same kitchens for the homeowner, he and I have yet to work together.

Case 2 (GC2): GC2 and I have worked with together for 3 yrs. I have wired many kitchens, additions and bathrooms that he has GCed. He calls me today and annouces that the house that we are doing 2 bathrooms at should get a service upgrade and "put $200 on it for me".

Not sure what I am going tell these guys. My first reaction is, WHAT, $200 on a ~$2000 job??? Wow great money if you can get it.

GC1 is new to me, and maybe we will never work together. GC2 and I have done good work together, last year GC2 supplied me with about 15% of my 2007s work. What would you savy businessmen/ladies say to this "offer"?
 
Whatever the "consideration" turns out to be, I guess it should be discussed. I have been asked by other GCs to do work at their homes. I know they were hoping/expecting a break or even to have it done for free. I don't feel comfortable doing that.
 
I had a similiar situation with a guy I've worked with on some kitchens. The "vig" he wanted generally related to work that he was directly involved with, not unrelated work in the same home (though now that I think about it there was one that needed a service upgrade to get the kitchen code compliant). At first my reaction was somewhere along the lines of "why doesn't he upsell the customer himself with a management fee rather than make me falsely inflate my price?" After thinking about it a bit I more or less came over to his way of thinking. He runs a franchise remodeling outfit and any increase in his price basically gets sucked up by the franchise. I like working with this guy and he doesn't bid me so I essentially looked at it as an advertising expense. I'm not saying this is right or wrong, just the way I dealt with it. I wouldn't do it for everyone, but steady work is steady work.

FWIW it's not every project he asks for this and the amount varies by the valuation of the job.
 
This situation sort of leads into another situation.
Some of the ECs who were working for GCs would see that the GCs were putting xxx amount onto the typical cost of a service and other electrical work to a customer and still get the work.
Hmmmm - says the EC, if he can do it , so can I. and those smart ECs are now charging more for their work, even if not through a GC and still getting the work..
I wonder what that really means? :wink:
 
Sounds about right... That's how GC's make their money... On the commercial side, it's proper to ask the GC if you can do work directly for his customer.. His 10% can often times be a deal breaker....
 
Yes, nothing wrong with steady work (profitible work). With the current HO I couild probably inflate my bill and they wouldn't flinch. I think to be fair to myself (as mdshunk stated) I should negotiate the amount, not just otay, here you are.
 
Right Stickboy, that was my initial thought. The customer could be frowning at my bill while the GC doen't get any heat for that $200 for him. Easier for me the GC to just pay my bill, and he can get the $200 out of the HO if he wants.
 
Seem that the general consensus is that the GC is entitled to something.
10% seems to be the number. GC2 is probably worth it.

This new guy who wants to use me for his kitchens is something different. I still need to review his numbers (price list).

Thank you all for the input.
 
Yea Electricalperson, I like that idea.That has been the way it was going.
Not sure why suddenly I am getting the "put $200 on it for me". I gotta talk to GC2 about this.
If I am going to put it on my tab and sell it to the customer, Mr. GC2 will have to negotiate a price with me. My starting position is less than the $200 he is asking for.
Else, Mr. GC2 can simply pay me my standard price and he can go get whatever he wants from the HO.
 
I have two GC that use me with out calling any one else. They have never ask for any "consideration", but we have a i'll scratch yours if you scratch mine relationship. If I have a HO ask me about a GC to do work for them I recommend one of these GC's. And depending on the size and complexity of the job dictates which GC I recommend. But in the end I usually do something nice for both at Christmas
 
jjhoward said:
Seem that the general consensus is that the GC is entitled to something.
10% seems to be the number. GC2 is probably worth it.

This new guy who wants to use me for his kitchens is something different. I still need to review his numbers (price list).

Thank you all for the input.
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The GC is entitled to something only if he performs a service to you, such as him paying you instead of the HO. Why should HO #1 get charged $200 more than HO#2 just because you were referred by the GC? You should not be marking up your price, just to give it to someone else. Give him the bill and let him: 1. pay you immediately when you are done, and 2. send the bill with his markup to the HO. Then he deserves his markup. The 10% of the job that he wants is probably more than your profit percentage for the year. Try this, ask him if you go and get leads for him, and he gets work from them, will he give you 10% of the job cost? See how well that goes for you! You are doing HIM a service by performing quality electrical work for his client, and in turn making him look good.
 
Ceb, I like that sounds of that type of relationship. Asking for $s (more like demanding) just doesn't sit well with me.
I regularly give the GC's number to HOs that are looking to do renovations.
 
i have run into this before-- the way i see it is - if the gc wants additional money for additional work let him bill the owner and add this profit or "extra money". his customer is also your customer at this point and you now know this guy can't be trusted. he is a businessman just like you, and should know what it costs you to hand him $200.00. the next time he asks you "to rip off his customer" he will ask for more money and truly expect it. every penny of this transaction reflects on you and your company from both the gc and the customer. i stopped working for gc's twenty years ago--and what a difference it made in my business world!!!
 
jjhoward said:
Ceb, I like that sounds of that type of relationship. Asking for $s (more like demanding) just doesn't sit well with me.
I regularly give the GC's number to HOs that are looking to do renovations.
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Yes, the "asking" for $$ sounds more like "protection" $$ that has been offered by Vinney and the boys:grin: The gifts I give my GC's are usally Snap-On tools ( my oldest son is a Snap-On dealer) so I get good $$$ deal:grin: :grin:
 
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