kickback?

[emahler]

Marc is on the right path...heck, how many of you have used Service Magic, or a similar service? You are paying them a percentage without any guarantee of getting the job.

and why wouldn't you add it to the job? it becomes part of you COGS for that job. No different than paying a salesman's commission on a job.

 

[powerslave]

and why wouldn't you add it to the job? it becomes part of you COGS for that job. No different than paying a salesman's commission on a job.

I agree 100%. If I wasn't going to add it to the job cost I would never even consider it. Nothing like working at a loss over and over.:roll:

 

[brian john]

I work with several subs, a few have sent me checks with a note thanks for the leads. Boy was I surprised.

I think it depends on on how this is handled. I work with salesmen that get me work all the time usually they handle the invoicing and pay me as a sub, I have had occasions where I invoiced the end user and the salesman invoiced me 10%. I do prefer the where I am the sub, though in the other case I get my money first.


Also had a building engineer tell me he would steer work my way (and provide me the other guys quote) if I made it 10-20% for his SHARE. I explained I could not operate under those conditions as I ran out the door.

Be honest, be fair and upfront with the customer and the sales folks, I have no problem explaining my arrangement to the end user.

 

[DanZ]

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.

You have to work that out before hand!

I really don't see anything wrong with giving someone a finders fee. It would really only be a kick back if she told you your installation and materials would be safe or your installation would be approved if she got the money.

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.

What's your OS, XP, Vista? It sounds like you have some fun weekend work coming up! Have you tried rebooting, running an anti virus/anti spyware, and defragging your hard drive?

 

[weressl]

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?

I can understand your discomfort, but if you think of it as an agents fee, ask her to send you a receipt and pay her on the books. You can also make her a counteroffer and promise her to do the same, and charge her as well.

 

[s.sparkomatic.r09]

BE AN EXPERT AT WHAT YOU DO, ALWAYS DO GOOD WORK.
With that said:
PAY CASH OUT ALWAYS
Be the guy they want to use AND PAY OUT CASH

One, it speeds up the time for your invoices to get paid.
Think about it builders have invoices from all trades, why should they make it a point to pay yours? If the super/deziner know they will get cash back then you get paid, you won?t have to wait long to get you check

Two, work volume increases to you. Now people have a reason to use you. There thousands of guys who ?do the electric? why use you? BECAUSE IT PAYS!!!

Three if your bidding work?????well look everybody ?knows? the price. If you come in a little higher and the super/deziner gets paid, they will use you.

Four, pay cash don?t be petty and fool with forms. I figure the pay out plus tax costs. I get the cash from the bank, and make a tax deposit the same day on the IRS web site.

Five, make it fun. I get cash from the bank. New hundred dollar bills, for the feel and smell. This alone does something to people. Then put in a big over sized manila envelope, fold it up a few times. Get an over sized rubber band to hold it together.
The fun part makes all the difference. One guy I pay out loves to sit along the road with the window on his truck down, I drive by slow and toss the money in the window, he speeds off. I mean what ever tips your hat dude, just give me more work!!!!!

Figure the cost in so they pay for the pay out and tax cost.

Builders love to play people , if you do good work you need to be the electrical contractor who plays the builder......... :grin:

 

[growler]

The fun part makes all the difference. One guy I pay out loves to sit along the road with the window on his truck down, I drive by slow and toss the money in the window, he speeds off. I mean what ever tips your hat dude, just give me more work!!!!!

The real fun part would be when you get to toss him that 1099 form at the end of the year. Any payment of over $600 in a calendar year requires the fileing of a form 1099.

You may end up in the middle of things you never even considered. This guy may have court ordered payments that you are helping him to avoid ( such as back child support or taxes ). They require you to file a 1099 for a reason.

If this story sound like fun now just try to imagine telling it in court. It sure sound like some one knew they were doing something wrong. :grin: :grin:

 

[cowboyjwc]

I don't know that the point was that she wanted to get paid. I see the point as she wanted him to pad his bill to pay her. If she wanted to make more money why doesn't she just raise her price? If at the end the customer questions the cost, the designer is just going to step back and say yeah he is a little high, you don't really think she's gonna say oh he's just high because I need my cut.

 

[wireguru]

thats basically a comission, not really anything wrong with it.

A kickback would be, for example: Joe works for a large construction co and he is in charge of hiring subs for a big project. He says to you, 'ok i want to hire you, make sure there is an extra 15,000 in your bid and you need to deliver a check for $15,000 to Larry at South Bay Mercedes. That would be a kickback (and money laundering too)

 

[ike5547]

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.

A designer does a great deal more than just say 'yeah, call joe'. Like a GC they deserve their cut.

 

[bradleyelectric]

referal fee. She just said to add it to the cost of the customer to let you know that the job is that sold. Think nothing about it, just do it. Referals are the best way to gain good paying customers. There is a whole industry called network marketing based on it. The fact that she wants a referal fee wouldn't bother me in the least. If you asked her if she would pay you 10% on referals shouldn't bother her either. Try to make sure that they are quality referals. Just about any referal is better than none. If she has a good sales approach see if you can adapt it to your sales approach.

 

[220/221]

Sales people work on commission.

It is a legitimate way to earn a living.

 

[hardworkingstiff]

No problem

No problem

I have absolutely no problem in dividing my bid number by .95 to come up with a sell number that someonelse sells. I don't staff a sales person, I get jobs w/out the "meet and greet" hastle, I get the number I want because I don't really have to compete, and my sales only cost 5% of the project (and I get my real bid number).

It's a sweet deal.

10% is getting pricey (IMO).

15%, I feel my number is too low.

 

[LarryFine]

They are not GC-ing the job, therefore they don't have the benefit of being able to mark up your services.

I work with salesmen that get me work all the time usually they handle the invoicing and pay me as a sub, . . .

These conjure an image where the designer does act as the GC. You give the designer/GC your price, and they can do whatever they want with it, as long as you get your due.

 

[electricmanscott]

Five, make it fun. I get cash from the bank. New hundred dollar bills, for the feel and smell. This alone does something to people. Then put in a big over sized manila envelope, fold it up a few times. Get an over sized rubber band to hold it together.
The fun part makes all the difference. One guy I pay out loves to sit along the road with the window on his truck down, I drive by slow and toss the money in the window, he speeds off. I mean what ever tips your hat dude, just give me more work!!!!!

Awesome! :grin:

 

[weressl]

I have absolutely no problem in dividing my bid number by .95 to come up with a sell number that someonelse sells. I don't staff a sales person, I get jobs w/out the "meet and greet" hastle, I get the number I want because I don't really have to compete, and my sales only cost 5% of the project (and I get my real bid number).

It's a sweet deal.

10% is getting pricey (IMO).

15%, I feel my number is too low.

So do you know what the agent of a professional athlete or actor gets?

 

[weressl]

You have to work that out before hand!

I really don't see anything wrong with giving someone a finders fee. It would really only be a kick back if she told you your installation and materials would be safe or your installation would be approved if she got the money.

I agree, but what is your opinion when you take into considertaion that it actually benefits the decorator that the HO hires you? The decorator found that she can work with you so it makes her job easier therefore she earns a profit when works with you.

The decorator did not extend any extra effort to find this job for you, she extended securing her contract and trying to get somebody to share that cost with her.

I think her asking for payment is somewhat unethical.

 

[growler]

I think her asking for payment is somewhat unethical.

It may be a bit unethical but many types of business require a bit of wheeling and dealing on the side to make them profitable. It's just the nature of the beast.

If you go to a tire shop and get four new tires put on your car they will charge a disposal fee for those four tires. If those tires happen to be in pretty good shape they actualy sell them to a used tire shop for a few bucks each. It may not be ethical but it is how business is done.

I don't think you will find a totally ethical business. The best you can hope for is to stay on the right side of the law.

 

[winnie]

Just a thought from a customer perspective reading various threads here:

Often ECs complain that designers have _no clue_ about the electrical portion of the job, doing things such as designing walls that require receptacles with no room for receptacles, or putting light fixtures where they are difficult mechanically, or any of a number of issues that make the ECs job harder and more expensive.

It seems to me that having a designer that is clued in about these issues would make the EC's life easier, and also make the job _cheaper_ for the customer.

Receiving good practicable designs is probably worth paying for.

-Jon

 

[weressl]

I don't think you will find a totally ethical business. The best you can hope for is to stay on the right side of the law.

Lets ask Mike Holt if he thinks he is conducting a totally ethical business or not. (I bet his answer would be: yes.)

I quess you're saying: do whatever is necesary as long as you don't get caught and you can have a good night sleep.

To me that is unacceptable.