kickback?

[iwire]

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.

It is obvious that he is not saying that.

 

[weressl]

It is obvious that he is not saying that.

I agree that he is not saying that but he is advocating a behavior that may result in the conclusion I have drawn.

He talks about wheeling/dealing is necessary to make a profit. It is a slippery slope.

 

[iwire]

It is a slippery slope.

Agreed, but what in life is not?

 

[growler]

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..

Not really, the designer is providing a service to the homeowner for which she gets paid. She is also providing a service to the electrical contractor for which she would like to be paid. The homeowner may not be so happy if they knew that the designer was collecting from two areas of the same job but what they don't know will not hurt them.

If she operated two seperate businesses no one would could have any problem with this, one as a designer and the other a referral service. They get 10 to 15% just to connect homeowner with a vetted and competent contractor ( guess who pays for this service). It's very common for the homeowner to believe the contractors is the one that pays but let's get real the cost is just added to the price of the job.

The only unethical part of this whole deal is not being completely up-front with the homeowner about who is paying for what. The homeowner still has a cloice of accepting the job bid or not. Nothing is being forced on anyone.

With the EC and designer working togather the homeowner may get a better and even cheaper job than what they would have gotten otherwise. For some reason people that have a history of working togather become more efficient.

I can tell you from experience that working with a designer that you know will get a cheaper quote than working with someone that is unkown. If she is willing to work with the EC she can earn her money both from the homeowner and the EC and that's all that really counts.

 

[growler]

He talks about wheeling/dealing is necessary to make a profit. It is a slippery slope.

Have you ever read the history of your employer? BSAF the chemical company.

 

[weressl]

Not really, the designer is providing a service to the homeowner for which she gets paid. She is also providing a service to the electrical contractor for which she would like to be paid. The homeowner may not be so happy if they knew that the designer was collecting from two areas of the same job but what they don't know will not hurt them.

If she operated two seperate businesses no one would could have any problem with this, one as a designer and the other a referral service. They get 10 to 15% just to connect homeowner with a vetted and competent contractor ( guess who pays for this service). It's very common for the homeowner to believe the contractors is the one that pays but let's get real the cost is just added to the price of the job.

The only unethical part of this whole deal is not being completely up-front with the homeowner about who is paying for what. The homeowner still has a cloice of accepting the job bid or not. Nothing is being forced on anyone.

With the EC and designer working togather the homeowner may get a better and even cheaper job than what they would have gotten otherwise. For some reason people that have a history of working togather become more efficient.

I can tell you from experience that working with a designer that you know will get a cheaper quote than working with someone that is unkown. If she is willing to work with the EC she can earn her money both from the homeowner and the EC and that's all that really counts.

I agree with most of your points.

However you missed my point of questioning why should the decorator receive additional benefit besides that she is already earning an extra profit by working with an EC she knows? I would not have a problem her marking up the subcontracting fee if she is to hire the EC.

 

[weressl]

Have you ever read the history of your employer? BSAF the chemical company.

It's BASF, but what is your point?

 

[growler]

I agree with most of your points.

However you missed my point of questioning why should the decorator receive additional benefit besides that she is already earning an extra profit by working with an EC she knows? I would not have a problem her marking up the subcontracting fee if she is to hire the EC.

Unless she hold a general contractor's license that going to be hard to do. Either the homeowner acting as the General Contractor or general contractor hired for the project will have to hire the electrical contractor.

Most designers are not licensed or insured to act as prime contractors.

On a remodeling project you will need either a building or remodeling permit. All the subs come in under this permit. The general contractor is really responsible for the work done by everyone as far as warranty goes. It's up to him/her to make sure the subs honor any warranty.

The designer doesn't always call the shots on these jobs. If there is a GC then he will probably use his own EC. People that he normally works with.
If it's a homeowner project they still have the option of getting their own EC to do the work. They also have the option of getting a different designer.

Many homeowner don't even hire an actual licensed designer. In many cases it's not required that they be licensed. The homeowners try to hire someone on the cheap side and that's how this all gets started in the first place.

 

[LarryFine]

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.

Not my used tires! I get every inch of travel I can out of 'em.

 

[LarryFine]

I would not have a problem her marking up the subcontracting fee if she is to hire the EC.

Neither would I, as long as she's the one who has to hit up the end customer for the 'finder's fee', and not I. If I could wheedle another 10% from the customer, I'd want it for myself. Let her work for her extra percentage.

 

[cschmid]

wow..lots of opinions here on what sounds to me an unethical proposition..now if you are biding a new house and a designer was involved it would be in the architects prints..Should you pay the designer then..how about paying the architect..or maybe even paying the GC..where does it stop..who should you pay the finders fees too..Come on thats not ethical in the situation above..But on the other hand if the designer is designing a 2 room remodel and she calls carpenter and a EC up and you just come and do your work summit a bill and get paid; maybe she deserves a commission..It has to be in the right context of work..

 

[iwire]

What specifically is unethical about paying a finders fee?

 

[winnie]

I believe that the potential issue here is one of 'conflict of interest'.

The payment from the EC to the designer may put the designer in the position pointing the customer to the EC that provides the biggest kickback, not the EC that best suits the customer.

IMHO this is unethical if the designer represents themselves as providing an unbiased recommendation as to the proper EC to use. If the EC is paying the designer, then the designer _cannot_ be unbiased.

'Kickbacks' are a bad word because they are used to get people to violate their responsibilities with other people's assets.

Consider: your boss tells you to go out and pick up a piece of hardware. You are spending your boss' money for this. You can go to one of two supply houses, and the more expensive one will give you 1% cash back at the end of the year (not your boss, but _you_). If you go to the place with the kickback (cash into your pocket), knowing that you could have spent less of your boss' money at the other place, then you are essentially _stealing_.

However I believe that 'finders fees' and 'commission sales' can be ethical if such is done entirely above board.

For what its worth, it might be ethical for the EC to _pay_ the finder's fee, yet unethical for a given designer to _accept_ that finder's fee.

-Jon

 

[cschmid]

Bob the designer ask for the EC to pad the bid with and extra 5 or 10 percent..that is unethical..

If the designer had said If I can get you more work would it be worth a 5 percent commission to you..that is legal and ethical because the designer is asking you about a business deal..then commissions are negotiatable..padding the bid is wrong and unethical..charging a legal expense is not wrong or unethical..

Then you need to ask if the commission is paid on the total bill including the commission fee or do you subtract the commission and pay 5% on that total..So you total the bill and figure 5% and then give it to the owner to pay..now the 5% comes out of your profit or your advertising account which is part of the overhead shop expenses..

it is not the homeowners responsibility to pay the commission on your deal..it is not like buying a car because if I am an HO and knew you were paying a commission I might then call a contractor who would do it with out the commission and save some cash..so it has to be figured into the overhead costs..

Winnie that is pushing the definition of stealing..yet i do understand your point..yet you work for a corporation and you due business with a certain company and at the end of the year the salesman comes by and gives you a jacket for say Christmas is that not the same thing..because during the year you are going to buy something at one wholesaler that is more expensive then another wholesaler..I think that calling it stealing is very loosely used there..but it does need to be ask in the ethical area..

 

[mdshunk]

Bob the designer ask for the EC to pad the bid with and extra 5 or 10 percent..that is unethical..

It's not padding when it's a legitimate cost associated with that work. In any event, why would it be unethical to pad any bid? I submit to you that there's no such thing as padding. I can charge whatever I want to, for whatever reason I feel like it.

 

[480sparky]

.... I can charge whatever I want to, for whatever reason I feel like it.

Does the same principle apply to the oil companies?

 

[mdshunk]

Does the same principle apply to the oil companies?

You betcha. We don't have to buy it. It's called a free market. I guarantee you that you've never heard me complaining about fuel prices.

 

[iwire]

I submit to you that there's no such thing as padding. I can charge whatever I want to, for whatever reason I feel like it.

I absolutely agree, you can ask for 100 times the value of the work, if the customer says yes or no is in their hands.

Here is a set of pens for $68,000 US dollars, yeah they have some gold but they are not really worth 68K.

My point being is that unless you are somehow forcing the customer to accept a price then it is not unethical.

Now if you go into a home and try to make more work by telling the HO that they will die in a fire if you don't rewire the house that would be unethical.

 

[peter d]

You betcha. We don't have to buy it. It's called a free market. I guarantee you that you've never heard me complaining about fuel prices.

I agree, my attitude about fuel prices is "Oh well..." regardless of what evil schemes may be behind the pricing of natural resources.

 

[cschmid]

It's not padding when it's a legitimate cost associated with that work. In any event, why would it be unethical to pad any bid? I submit to you that there's no such thing as padding. I can charge whatever I want to, for whatever reason I feel like it.

Been taking business lessons from Exxon Valdez (hope that is spelled correctly they have more money then me)..

You can charge anything you want but in the end customers talk and you can be the real loser..If I am the customer and get an itemized bid vs the flat bid which are you going to pick..especially if they are only few dollars different, the one who is up front or the one who acts as if there is something to hide..Your choice..

Are you building a business or just being a profession electrician who is self employed..