kickback?

[powerslave]

We're just finishing up on a remodel job where we are working with a decorator and a GC. The decorator came up to me today and told me how pleased she has been with our work and our attention to detail. She said she would like to bring us in on some other projects. Then she asked if I would be willing to add 5-10% on to the future quotes and give it the extra money to her.

It totally caught me by surprise and I skirted the issue with her and acted like I was too busy to talk about it at that time(which I was).

I have never run into this before. Has anyone else? This sounds to me to be nothing less than a kickback. I like doing things on the up and up. Unfortunately I think it may mean the end of the road as far as working for this woman. But so be it.

Am I overreacting?

 

[480sparky]

If your gut tells you it's wrong, then it's wrong.

I'd resist the urge to, in effect, 'buy' her loyalty. It smacks of the mafia. Your contract is with the HO, not her, and she has absolutly no business asking you to raise your price in order to line her pocket.

Getting work is one thing. Sleeping at night as another.

 

[mdshunk]

That's just sorta how it is when working with decorators. It's perfectly normal. Every lead has a legitimate cost, and a lead from a decorator is normally also a sold job. Evaluate the cost of developing leads and selling jobs, and you'll find that the decorator's cut is probably cheap. Plus, you normally end up working with unusual product that you'd have not otherwise normally had the chance to use.

 

[powerslave]

That's just sorta how it is when working with decorators. It's perfectly normal. Every lead has a legitimate cost, and a lead from a decorator is normally also a sold job. Evaluate the cost of developing leads and selling jobs, and you'll find that the decorator's cut is probably cheap. Plus, you normally end up working with unusual product that you'd have not otherwise normally had the chance to use.

I never really thought about it that way. We pay the phone book and search engines for leads. I suppose this could be considered a marketing expense.

BTW, I agree totally with 480 about being able to sleep at night. That is why I brought this to the forum. Thanks for the replies guys.

 

[mdshunk]

Yeah, I mean, it's basically no different than hiring a salesman if you have a larger shop. Only, in this instance, she's bringing you sold jobs and you're paying her for her efforts and consideration. I see absolutely nothing wrong with that. I have a couple friends who sell cars. If I write my name on the back of one of their business cards and send someone their way with that card, I get a spiff if they buy a car.

The bigger problem might be working with designers. I happen to have -zero- problems working with designers and decorators. My experience may be unusual, however, since most guys on the internet tend to report the miserable times they've had with decorators and designers.

 

[480sparky]

Yeah, but does just giving her 10-15% of your job guarantee you'll get any more work from her? She may just make another car payment with it and continue to hire her cousin Ernie.

If you want to pay for work like that, tell her that you'll be happy to discuss your price after you wire the next couple of jobs she sends your way.

 

[growler]

This sounds to me to be nothing less than a kickback.

It probably is but I don't have any real problem with it except that a kick back may be illegal. Ask her if she will invoice you as a consultant to get her 5 or 10% so you can write it off as a legitimate business expense.

 

[powerslave]

I really haven't had any problems either. You just have to be attentive to them. And you're right about working with new products. I don't know where they find some of them.:smile:

 

[powerslave]

It probably is but I don't have any real problem with it except that a kick back may be illegal. Ask her if she will invoice you as a consultant to get her 5 or 10% so you can write it off as a legitimate business expense.

This is one thing I would need to clarify with her. She specifically mentioned giving her a check. She never said cash. I would definately want to write it off.

 

[mdshunk]

Yeah, but does just giving her 10-15% of your job guarantee you'll get any more work from her?

Um... what would it matter? You otherwise have no lead generation or sales costs associated with the job she already brought your way. Sliding her 5% from that work really is not a big deal, particularly if you accounted for it in the estimate or bid. I can pretty much guarantee you one thing; just giving her a great-big, heartfelt "thanks" for the job will not get you any more work from her. Get with the program. This is how you get work from designers and decorators. You've normally got enough PITA money in their work anyhow, so you ("you" used generically) can afford it.

Designers and decorators have defined costs involved with developing prospects, turning prospects into clients, and turning clients into jobs that subs can do. These are expenses that the EC did not have to incur. A meager 5% sounds like the least you can do, and generally assures more work in perpetuity. I consider a system such as this one an important part of the way I do business.

 

[nakulak]

the 5 to 10 percent is commonly known as a finder's fee. As long as it is dealt with appropriately (not unreported cash in a plain manilla envelope), then it is perfectly legal. She can invoice you and/or you can send her a 1099 at the end of the year. Networking with designers, architects, bankers, etc can be extremely profitable and, as Marc indicated, easy sell (or no selling required - you came recommended).

 

[480sparky]

Interesting. I'm going to have to try this.

Next time I'm on the job and I have someone ask me, "Do you know of a good plumber/drywaller/carpet layer/brick layer/roofer/landscaper/framer/painter/HVAC tech/whatever?", I'll just say, "Yeah, call Joe Sixpack at 555-1212."

Then, when Joe arrives, I'll just tell him he owes me 15% of the job.

 

[mdshunk]

Then, when Joe arrives, I'll just tell him he owes me 15% of the job.

No, he'd look at you cross-eyed. What we're talking about here is a system that is normal and longstanding when working with designers and decorators. It is a system that is peculiar to their trades. Lighting designers, interior decorators, interior designers, feng shuei kooks, some architects, etc.

 

[480sparky]

No, he'd look at you cross-eyed. What we're talking about here is a system that is normal and longstanding when working with designers and decorators. It is a system that is peculiar to their trades. Lighting designers, interior decorators, interior designers, feng shuei kooks, some architects, etc.

Then I abhor the normal. I say our trade is missing the boat, and it's high time I get to shove my tootsies into someone elses pocketbook.

 

[480sparky]

No, he'd look at you cross-eyed. What we're talking about here is a system that is normal and longstanding when working with designers and decorators. It is a system that is peculiar to their trades. Lighting designers, interior decorators, interior designers, feng shuei kooks, some architects, etc.

Then I abhor the normal. I say our trade is missing the boat, and it's high time I get to shove my tootsies into someone elses pocketbook.

 

[mdshunk]

Then I abhor the normal. I say our trade is missing the boat, and it's high time I get to shove my tootsies into someone elses pocketbook.

No, that's not what we're talking about. We're talking about buying leads. Nobody's making you pay. If you want the work, then you buy the lead. No different than paying for your Yellow Pages ad every month. Don't pay the phone book people if you don't want leads from that source. In this case, it's a sold job. A no-brainer, if you ask me.

Let me ask you this, Ken. Why should any designers hand you what are essentially sold jobs? They are not GC-ing the job, therefore they don't have the benefit of being able to mark up your services. They make their money partly from their client, and partly on the back end from the subs.

 

[growler]

Then I abhor the normal. I say our trade is missing the boat, and it's high time I get to shove my tootsies into someone elses pocketbook.

There are companies out there that will pay you a finders fee for a hot sales tip. Many HVAC contractors will pay for a good sales lead.

 

[360Youth]

I would approach with caution. I don't see a problem with paying a "commission fee" to someone that brings you work. That practice has been around for centuries. From no more than a post or two on the subject I am a tad leary of padding the customers bill in order to accomplish. Her tactics seem a little hush-hush. Maybe it is just the way it came across.

Yeah, but does just giving her 10-15% of your job guarantee you'll get any more work from her? She may just make another car payment with it and continue to hire her cousin Ernie.

If you want to pay for work like that, tell her that you'll be happy to discuss your price after you wire the next couple of jobs she sends your way.

Yeah, but does just giving her 10-15% of your job guarantee you'll get any more work from her? She may just make another car payment with it and continue to hire her cousin Ernie.

If you want to pay for work like that, tell her that you'll be happy to discuss your price after you wire the next couple of jobs she sends your way.

I think you need a day off. You are starting to repeat yourself. :grin:

 

[tonyou812]

I agree with marc totaly. If paying someone a few bucks brings you more buisness why not???? I always take care of someone who gets me in like a school system or building. I guess its more of an old school mentality. If I had the luxury of having a pletora of work and picking and choosing the work I want I wouldnt need to do this but if it gets me more work why not.

 

[480sparky]

I think you need a day off. You are starting to repeat yourself. :grin:

My computer has the hiccups. I don't know how to solve it, let alone what causes it. I double-post at least once or twice a day.