Markup

[DavisIMI]

Like others have said, they are contractors, they know what it takes to stay in business, charge them your usual rate and 10%, believe me they would do the same. Just make sure they are happy with the installation and maybe throw in a few extra's.

 

[magictolight.com]

The End Result

The End Result

Well, I bid the job with our usual markups. Told them I would throw in a $1000 office warming gift. Figured I would take care of them when it came to their change orders. They got the bid, which was $15,500, told me they figured about $8000, asked me my advice on some of the construction regarding the electrical install, and then got three more bids. All came in right around where I was. Now I heard through the grape vine that a couple of the managers are irritated that I did not give them an incredible price even though we already give them incredible service. They went out, found an unemployed electrician who could do it for cheap and we lost the job. Oh well, I guess all is fair in love and war! Don't know what this means for our future relationship. It will be interesting.

 

[growler]

They got the bid, which was $15,500. They went out, found an unemployed electrician who could do it for cheap and we lost the job.

OK this is commercial office space that needs around 15K of electrical work. Sounds like a job that would need a permit so how are they going to handle that?

They can cover him on their workman's comp.( as an employee) and maybe even their general liability but would have to start an electrical contracting business to get a permit for the job.

 

[LarryFine]

They went out, found an unemployed electrician who could do it for cheap and we lost the job. Oh well, I guess all is fair in love and war! Don't know what this means for our future relationship. It will be interesting.

Be ready for a call to redo stuff, and heed Grwoler's hint about the legality of the guy they hired to do the work.

 

[electricmanscott]

They can cover him on their workman's comp.( as an employee) and maybe even their general liability but would have to start an electrical contracting business to get a permit for the job.

Says who?

Bottom line is these people are morons. It just that simple.

 

[benaround]

Our best customer, a general contractor in the area, is now building a space for their office. Since they give us so much work, and since this is for their own office, do we still mark up the electrical project like we would otherwise or do we discount the project for this client?

I would ask myself, if I hired this GC to build something for me, what would he do for me ?

 

[Mule]

Id say keep so called "favors" limited to small jobs. When it comes to larger amounts of money, the money always wins out, and it doesnt matter how well you know the person. That's one of the reasons we dont do larger jobs...

Its my experience that money people think about money, and that the end of it.....

Dang Im pooped just got back from a Harley ride.......and Olive Garden...yum yum....

 

[George Stolz]

Our best customer, a general contractor in the area...

...more than 50% of our work comes from these guys...

...I bid the job with our usual markups ... $15,500, told me they figured about $8000...we lost the job.

Sounds as thought they meant a lot more to you than you meant to them, which is what I expect from any customer. Set your expectations low and you're prepared for the worst, and not 'heartbroken' when they give the job to someone else. I wouldn't have given a discount either.

I worry far less about losing a job bid as close to right as I can than taking a job bid $7,500 lower than I'm comfortable with and trying to figure out how to make money on it. JMO.

Edit: I'm in a similar boat - two guys (essentially) against the world, and IMO, lowering guard (i.e. discounting) in our precarious position equals death. At least that's how I look at it.

 

[Buck Parrish]

IMHO, normal markup, throw in a nice "Housewarming gift", a nice lighting upgrade for the conference room, or something like that.

That's what we do. Give them some fancy wiring. Not to much just enough to notice. Make a light come on when a pantry or closet door is open .

 

[Cavie]

If their 50% of your business, do it at cost. Cover your expences. Material, Labor. That way your not out anything. If they ask,tell them you cut out your overhead and profit and leave it at that.

 

[electricmanscott]

I would ask myself, if I hired this GC to build something for me, what would he do for me ?

I'd bet my house that he answer would be jack.

 

[satcom]

If their 50% of your business, do it at cost. Cover your expences. Material, Labor. That way your not out anything. If they ask,tell them you cut out your overhead and profit and leave it at that.

How can you cut out your overhead, that is part of your cost?
I would just tell him electrical work is not one of your hobbies, it's how you earn a living.

 

[jrannis]

Here is how you decide how much of a discount you give them:

If they were not building a building, how much money would you give them out of your own operating account for being such a good customer. That is the discount you give them. If you had to write the check today, what would it be.

BTW, if you give a good customer a break because they are a good customer, then you are even....right? Then they are no longer a good customer? Isn't the point is to have as many good customers as possible, not to get even with all you customers.

I can appreciate the logic here

 

[jrannis]

Well, I bid the job with our usual markups. Told them I would throw in a $1000 office warming gift. Figured I would take care of them when it came to their change orders. They got the bid, which was $15,500, told me they figured about $8000, asked me my advice on some of the construction regarding the electrical install, and then got three more bids. All came in right around where I was. Now I heard through the grape vine that a couple of the managers are irritated that I did not give them an incredible price even though we already give them incredible service. They went out, found an unemployed electrician who could do it for cheap and we lost the job. Oh well, I guess all is fair in love and war! Don't know what this means for our future relationship. It will be interesting.

Ill bet the job is going to cost them close to 20k before they get done

 

[magictolight.com]

Man, you guys are greatly encouraging. You might expect I was seriously 2nd guessing my judgment. Thanks for the great input! Most of the time it feels like we are floating out here all by ourselves. This was one of the toughest business lessons I've dealt with so far! Thanks! Of course my darling wife is telling me "I told you so! but you had to here it from them!"

 

[radiopet]

Our best customer, a general contractor in the area, is now building a space for their office. Since they give us so much work, and since this is for their own office, do we still mark up the electrical project like we would otherwise or do we discount the project for this client?

They use you because they trust you or liked your work. If you wish to discount it, that would be a choice you have to make. I never discounted by work as most of the people who hired me knew I had bills to pay also and figured I always gave them a good deal anyway.

Gotta pay your own bills first.....just my opinion.

 

[satcom]

They use you because they trust you or liked your work. If you wish to discount it, that would be a choice you have to make. I never discounted by work as most of the people who hired me knew I had bills to pay also and figured I always gave them a good deal anyway.

Gotta pay your own bills first.....just my opinion.

He is building the office space because he is making money, if he discounted his work he would have to keep his office on the corner of the kitchen table, If he has the money to build the office, he should be able to pay your fees, what you will be able to do is throw in some small extras, that will just require a little of your time. Don't commit to extra work just throw some small extra in the job.

 

[Don Gorham]

If you give away your work you won't be working long before you are begging. Leave your OH&P in the quote and then determine a % discount you will give them for being a "Good Customer", let them know your doing that and that you really like doing business with them ect. ect. They know it costs money to run a company and should not expect you to loose any thing in the process.