T&M Question......Ethics....

[dbuckley]

Why would you want to show them your costs? :-?

Because on a T&M job the entire risk is with the customer, and the more you can allay a customers fears that he's being ripped off, the greater the degree of trust.

If for T&M you work on fixed margins, then there is nothing to lose by showing invoices if requested.

 

[JacksonburgFarmer]

Yeah....

everyone wants you to make a good living....just not off of them!!

The guy I am doing this work for is a good guy.....my Father in law does work with him and has known him for 30 years......He isnt trying to beat me down in price at all, I just want to play fair, and do what is right.....but sometimes these ideas beat my profit out of my pocket.....I am not nearly as nice as when I first started....

 

[iwire]

Because on a T&M job the entire risk is with the customer, and the more you can allay a customers fears that he's being ripped off, the greater the degree of trust.

They either trust me or they don't. If they do not trust me why would they believe that I am showing them the true price?

Again I ask ............ what other businesses show their costs to the customers? Not to many I and I know I would not.

 

[jusme123]

imo if it is tm they have the right to see the original invoice (if requested)... would u want to see it if u paid bill. charge whatever the invoices where and the agreed upon markup--good and fair business practices never come back and bite u

 

[don_resqcapt19]

They either trust me or they don't. If they do not trust me why would they believe that I am showing them the true price?

Again I ask ............ what other businesses show their costs to the customers? Not to many I and I know I would not.

There is no reason not to show your material costs on a T&M project. You have agreed up front to a specific markup on the material. Why would it be an issue to show them the invoices? As far as mark-up for handling the material, that doesn't really exist for T&M...you charge you normal labor rate for the material handling on these types of projects.
Now this is totally different for a contract job...their they only get an invoice based on percentage of material that has been purchased and percentage of the job that is completed. No material costs or even labor hours show up on a contract invoice and the client does not get to see any of the documents...other than our invoice to them.

 

[Mule]

As I said, it's not a 'right' it is a decision you have made.
Ok, just a play on words

Nothing personal but I can see no reason whatsoever to show them your prices. None, never, ever, not their darn business.

If I dont want any risk, and want to enjoy my work by working T/M, the customer has to take the risk. By telling him that he has access to the cost invoices, it at least shows him that I have nothing to hide,

Does the grocery store you shop at show you the price they paid?No, I dont have a cost plus agreement with the grocery store, Does the supply house show you what they paid? Same deal, not T/MDoes anyone you do business with show you what they paid for what they are selling you?Yes, I've had cost plus carpentry work done before, and frankly I liked it.

Why would you want to show them your costs? :-?

To show them I have nothing to hide, and I use that as a selling point, to promote T/M, which is 90% of my business

Bob, I've had several corporate clients that demand breakdowns on proposals. They want to know, and compare bids.

So, I have to ask you, "Why would you not want to show a customer, when you have a T/M agreement, that in truth is basicaly "cost plus" ?

But, as you know Bob, it's America, so we have to run our individual business'es the best way we know how. For me I have to rely on alot of repeat business, and my relationship with my customer is paramount, and then my profit seems to always come along with it...

 

[Mule]

They either trust me or they don't. If they do not trust me why would they believe that I am showing them the true price?

It's a way of EARNING the trust Bob......trust is a variable element.

 

[LarryFine]

You have agreed up front to a specific markup on the material.

How would you respond to "Okay, then, I'll supply the materials. Just give me a list."

 

[Rewire]

imo if it is tm they have the right to see the original invoice (if requested)... would u want to see it if u paid bill. charge whatever the invoices where and the agreed upon markup--good and fair business practices never come back and bite u

what if you pull from shop stock? I order conduit several thousand feet at a time and I usually don't wait till I am out to reorder I cannot tell which 10ft piece was purcase at .19 a foot and which piece was purchased at .16 a foot

 

[iwire]

There is no reason not to show your material costs on a T&M project. You have agreed up front to a specific markup on the material.

No we have not, only when forced to do that we agree to that.

 

[jusme123]

your regular supplier will give u the current price on the conduit and that is the price u use

 

[iwire]

It's a way of EARNING the trust Bob......trust is a variable element.

Never been an issue, 99% of the time people trust me. They give me keys and alarm codes for their businesses, tell me to let myself in and out.

 

[bradleyelectric]

just tell him if it is between .01-.49 mark up is x6
.50-.99 x 5.75
1.00-1.49 x 5.5
1.50-1.99 x 5.25 ..........

maybe not, just total the bill and give to him to pay

 

[rt66electric]

I agree with--

I agree with--

If the customer is a good one with trust , then I would consider giving the actual cost and savings.
I have bought loads of surplus stuff at auctions, etc. Do I sell the do-hickee at $0.10 or less, or do I sell at Home depot single Item price?? If I install a 100 ft of romex ,do I sell at the HD per/ft price ?? or call it a Half roll when the price was $80 a roll??, or at $40 a roll???. WELL IT DEPENDS on the customer and who do they Know?

 

[iwire]

To show them I have nothing to hide, and I use that as a selling point, to promote T/M, which is 90% of my business

Or your showing them they can make you jump through hoops.

So, I have to ask you, "Why would you not want to show a customer, when you have a T/M agreement, that in truth is basically "cost plus" ?

Because they are not going to want to see they paid so much for wire nuts, screws etc. The smaller the cost the higher it gets marked up. If you think thats wrong then I assume you don't shop at stores or bring your vehicle to a mechanic?:smile:

But, as you know Bob, it's America, so we have to run our individual business'es the best way we know how.

To keep things clear I am an employee, I don't have the guts or energy to run a business. Besides, I would always be an electrician running a business not a businessman running an electrical shop.

 

[Dnkldorf]

Bob, I looked into a particular bid about 1 yr ago, it was for on call electrical service for an Air base. The contract was for 3 yrs with a fourth optional.

These type bids call for you to name your price, per hour, for each of the 4 yrs.

xxxx for yr1
xxxx for yr 2
xxxx for yr 3
xxxx for yr 4


It also calls out, you are limited to 15% mark-up on materials.

They want the reciepts, if they ask.

This is the bid, if you don't like the terms......don't bid it.


Just because you would never do such a thing, doesn't mean this type of arrangement doesn't exist.


And if material is taken out of company stock, ie straps, wire ect, you price out each item and indicate stock item.

It can be a sweet deal if done right.

 

[iwire]

It also calls out, you are limited to 15% mark-up on materials.

They want the reciepts, if they ask.

This is the bid, if you don't like the terms......don't bid it.

Exactly, but that is different then always doing it as a 'nice gesture'.

Just because you would never do such a thing, doesn't mean this type of arrangement doesn't exist.

Never said it does not happen or that the companies I have worked for have not done it when it was all part of a contract.

But when I hear T&M I think of regular run of the mill service calls that have no contract. The customer signs a rate sheet and we start.

 

[Mule]

Or your showing them they can make you jump through hoops.No hoops here Bob, If I detect a customer like that, he's not my customer any longer



Because they are not going to want to see they paid so much for wire nuts, screws etc.
We have a flat rate fastener charge that is charged to every job per day

The smaller the cost the higher it gets marked up.
Our trip charge covers that cost, if there is little or no materials

If you think thats wrong then I assume you don't shop at stores or bring your vehicle to a mechanic?:smile:I dont thinks its wrong Bob, and I dont think my way is wrong either, just different



To keep things clear I am an employee, I don't have the guts or energy to run a business. Besides, I would always be an electrician running a business not a businessman running an electrical shop.Youve got me titled just the way I like it.......:grin:

:grin: It's ok to be different..........isnt it?

 

[Dnkldorf]

But when I hear T&M I think of regular run of the mill service calls that have no contract. The customer signs a rate sheet and we start.

I hear ya. Some of these arrangements aren't so much for making money now, as much as they are taken at cost, and made up after building relationships and trust as mentioned in above posts.

FWIW, I wouldn't break down materials individually. I would just have 2 lines.

time xhrs total
Mat total

And I wouldn't do it as a nice gesture either.

 

[NolaTigaBait]

I would always be an electrician running a business not a businessman running an electrical shop.

iwire, i find myself doing this...even when i bid a job with a flat price, i never find myself cutting corners, i go the extra mile and add this or do this, i end up killing my profit margin!