There has been some excellent threads on sales and dealing with customer objections lately. I need some help in talking to customers about them buying their own materials.
Message on answering machine: “We are buying pre made counter tops. We want you to come measure and then cut the sink hole and install them after we get them”
It’s common for customers to want measurements for doors, windows etc. so they can drag something back from the big box on a trip to the city.
The problems I have with this is:
I’m out of the loop. If I deal with my suppliers, I know who I talked to and how to get info and how to get a problem taken care of instead of “some guy- we don’t remember his name” at Home Depot.
I know what I’m dealing with if I get it myself.
The risk isn’t worth the reward without a markup. Cutting a sink hole in the counter is an example. If all goes well I get a partial hour. If it goes bad, I have to buy a new counter from a place two hundred miles away. What happens if I miss a measurement on a window?
I have to insist they buy through me or carefully define my responsibilities which can sound really odd. “I’d be happy to measure your countertops and cut the sink hole, but unless you get them through me, I won’t be responsible if I mess up,”
How can I discuss these issues in a way the customer will take it well?
Replies
The risk isn't worth the reward without a markup.
Add a premium for materials they supply or simply don't allow it. You have to cover your costs and the hassle factor.
Beer was created so carpenters wouldn't rule the world.
"Add a premium for materials they supply or simply don't allow it. You have to cover your costs and the hassle factor."I'm convinced I'm going to have to start doing that. There are so many people on this forum who are better at customer relations than me. I was wondering about tips on how to present this to the customer.
Bluntly. I would tell them "I'll be glad to make the cutouts on your counter at my normal hourly rate but I can't accept the responsibility for the countertop if something goes wrong." That would force Mrs Jone to say "what do you mean?". I'd reply. When I work hourly, I don't make enough money to offset the risk that is involved in projects such as you are undertaking. One slip of the saw and I could ruin four months wages and my kids would starve to death. If I'm making a markup and profit on materials, a mistake then would cost me but it would be offset by the gain I made on all the materials that I cut right. So, I'm willing to work hourly for you, but when I'm working hourly, the risk is transfered to you. You get a lower price but it comes at a higher risk. I can help you lower the risk by offering you a fixed bid but generally, it come with a higher price becasue I know I'm not perfect so therefore I have to factor in the inevitable losses that occur. "CraigF, you really need to understand that you shouldn't be doing all that yapping to a client. They don't want that. They want fixed price bids. Many of our clients tell us they are hiring us precisely because "your not a one man band in a pickup truck". We'll install owner supplied goods but if the job is less than 10k, then we might flat out refuse and say this "Sorry, this job is already too small. We understand that you want to lower your budget but we need to make money too." Craig, that is called the takeaway. We're offering our services but do ing it on our terms. If they want professionals in there doing the work, we gotta have some money to motivate us and we're not afraid to say it just like that. We can look them in the eye and say that because they are making money too somewhere and if they are entitled to make money in their business, we are entitled to make money in our business. Its not that hard to do. It's okay to make money and to talk about making money...even if its coming out of their pockets! Bob's next test date: 12/10/07
"There are so many people on this forum who are better at customer relations than me. I was wondering about tips on how to present this to the customer."I tell them stories of how previous customers have screwed up orders, screwed up schedules, added greatly to costs by their screwups, and generally convinced themselves not to ever try it again.I find that after listening to me give my spiel, the ones that want to go ahead anyways, convinced of their own infalability, are the fools that I am better off avoiding.
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"I find that after listening to me give my spiel, the ones that want to go ahead anyways, convinced of their own infalability, are the fools that I am better off avoiding."That's a good point. There are a great many "infallible" people around here. I need to remember losing them as customers isn't all bad.
I have read a number of your posts and as a HO have found them very enlightening.This issue I have is how to both get the choices I want plus be fair to the contractor. There are so many more choices and information available that it seems to me a contractor would be hard pressed to be aware of even a small portion of them. What is a good way to pay a contractor a fair price. The markup is a simple device but not really addressing the real cost/profit needed for a particular job (installing a cheap product could entail more than installing a more expensive high quality one).In addition, when the exact same product is available much cheaper from a big box store than the contractor's supplier (something that routinely happens now with Pella windows), at what point do you expect the HO not to pay an inflated cost plus markup. To your mind, how can you negotiate a fair price for the product and installation while not increasing the product dealer's profit (sure he is entitled to a profit, but he is not necessarily entitled to make from you or the HO without providing added value.
Those are good and fair questions.Maybe I can do them justice."how to both get the choices I want plus be fair to the contractor."There is a system in place for most of us where the architect specifies the product to be used and the contractor bids on the job with that in mind.In my location, that system deviates and is modified. A lot of our clients are from all over the country and even all over the world. Sometimes products are specified that are not available easily here. I've had a lot of European fixtures specified. The Plumber would rather use American fixtures and lets the HO buy it themselves, rather than pursue new trails of supply and purchase than he normally uses. These are normally high end products, such as Waterworks.But it seems from your wording, that you are more concerned with a lower end product -
"when the exact same product is available much cheaper from a big box store than the contractor's supplier "
for instance with plumbing fixtures, you may find that the typical plumber uses a fixture that has brass parts, while what appears to be the same at the big box has plastic parts. In point of fact, it was q plastic part that failed in the example I mentioned where my plumber got sued.With windows, a large part of the decision what brand to buy is based on the service record of the supplier. In any full house window order, something is likely to be wrong. Both Pella and the big boxes have terrible track records on solving those kind of problems. The service that a contractor provides in dealing with that is the added value you mention looking for. That service - or the value of the advice to buy a brand better than Pella - has a cost- or value - or a price, depending how you want to look at it.Here is another example - I had a lady 10-12 years ago who hired me and my crew for a labour only job, explaining that she had once run a tile/carpet supply store and knew all about construction , so she wanted to deal with the materials herself.
But she could not figure out how much of what she needed...
So she got to pay me extra to make up a materials list
Then she shopped and bought a couple different things thinking she'd gotten a "deal"
So she got top pay extra fro re-framing to accomodate the changes she'd caused by listening to the salesman.
And another change she decided unilaterally meant I had to refigure the whole trim order.
Roughly three hundred bucks of my time for a supposedly money saving change that saved her all of $320 bucks, but got her a lot cheaper product/trim package - not a good value in my book.
I could go on all day with examples of people who screwed themselves by ignoring good advice and spending more to get less.That advice is included in the markup with a good contractor. But a customer who already is convinced they can save bucks by going straight to the big box is telling me right up front that they know too much and don't want my advice, so I don't offer it.Maybe my entertainment is more perverse as I age, but I learn more as i get older, not to "cast pearls before swine".
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thanks for you answers.Actually i was talking more of the high end. Big box stores are now selling the high end of major window manufacturers. They are custom order, fiberglass or aluminum clad wood with extensive options. They can get a better deal from the manufacturer because of the volume and don't need to make as much on each window with the volume and low carrying cost of the special order.
Good luck with that.
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Hi, I am not sure what you mean. Could you please elaborate?
The big boxes are notorious for bad service on special orders. They lose and damage things and mess up ordersandPella is not what I think of as a top of the line window company. Of all the brands of windows I have used, they have given me the most problems and the worst backup service.See that is part of the profit picture in hiring an experienced contractor and paying his markup. It was expensive over time for me to learn which window companies are worth dealing with and where to buy them. with windows, you are buying not only the glass and frames, but the backup service of the company and their local supplier.Calvin on this forum lives nearer to their factory and he gets good service from Pella - he must have a good rep in his area. I have had some ugly treatment and no help from the factory. So your purchasing agent is a critical part of the chain.
HD has a bad track record with things like this.
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thanks. My contractor was only offering Pella windows. Contractors I know through my boy scout troop also swear by Pella (but only the higher lines). Pella is offered by Lowes and at least here they have backed up everything. So I guess things vary around the country. thanks again for all you thought. I think the models may be changing.One thing that never changes is that everything changes.
There are regional differences.
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"To your mind, how can you negotiate a fair price for the product and installation while not increasing the product dealer's profit (sure he is entitled to a profit, but he is not necessarily entitled to make from you or the HO without providing added value."That value isn't apparent to a customer upfront. The guy I do business with is the third generation in the same lumberyard. Things very rarely get messed up, but if they do, I go to him and he takes care of it. One guy is responsible. He is also available and motivated to help since a bad rep in a small community will hurt him. There is no corporate chart to navigate through, just a call to him.He's also the most expensive option.
I can second Piffin's point regarding windows. Our contractor supplied about 30 Marvin windows for an addition done three years ago. We've had a few minor problems with the windows. A single call to the contractor brings the Marvin rep. out to the house to fix the problem. If we had been crazy enough to buy windows from HD, we'd still be waiting for a fix.
when the exact same product is available much cheaper from a big box store
More often than not, even when it looks similar, the product is different and usually inferior at the big box.
I just purchased a bunch of recessed can lights that my electrician needed to install. He asked me to get them to save some time. I got them from a big commercial electric supply house. They cost about double what the same brand costs at HD. My electrician commented on how nice they were and how much quicker and easier to install they were, compared with the usual big box junk. At $65 per hour, I figure I probably saved money by buying at a reputable supplier who caters to contractors.
"At $65 per hour, I figure I probably saved money by buying at a reputable supplier who caters to contractors."You are a smart man! Bob's next test date: 12/10/07
I was wondering about tips on how to present this to the customer.
I'd suggest memorizing a quick overview of your costs and charges so when you first touch base with clients it's very to the point and matter of fact. People won't trust a guy who hums and haws and chews around the edge of something. Say what you charge without hesitation and with no regrets.
For training on this, follow one of the high priced trades around for a day.
Beer was created so carpenters wouldn't rule the world.
Thanks.
Say what you charge without hesitation and with no regrets.
Right on! And no appologies either. --------------------------------------------------------
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my plumber started doing similar a few years ago after a HO bought fixture failed 3-4 years after installation.the HO's insurance Co filed a lawsuit against him to recover for water damage to the home. It was totally unjust and no way his fault at all.
but rather than fight it too long his liability policy carrier covered the claim and then raised his rates.So the next day, he started to add 15% to his bill for installations where the HO was buying the stuff.and he charges for the time they waste talking to him about what to get and what not to get.
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That's the most stupid thing I've read in a while. Leave it up to insurance to do the wrong thing. They hurt the wrong guy.
Yes, but it is done all the time. They measure the expected costs of waging a battle on principle vs the costs of a settlement now. That is the tort system we have and the reason why probably a third of the lawsuits in court are initiated.Got another one for you - my daughter was driving her car ( in my name) several years ago and rear-ended a guy. He suddenly decided to turn left without signaling, but there was a car coming the opposite direction, so he stopped dead in the road.said he was not hurt, no tickets issued to either of them, three months later, we get a notice of lawsuit for back/neck injury, pain and distress, etc.Well, at the time of the accident, he stated that he was on the way to the chiropractor for treatment for back/neck pain from a previous accident.
We find out from a mutual acquaintance that this guy lives off frivolous lawsuits and selling dope.
we inform our insurance company who is handling this and find out that they also are his insurance company.
A few months later, he stages an an "accident" where he steps out in front of a car in front of the supermarket and sues that lady too.Our insurance wrote us a few months ago to let us know that they are happy to inform us that the claim has been settled. They awarded him $73K for his shenaniganship.I hope someday one of his staged accidents turns out to be real, or that the ins comp[any finally screws him for fraud.
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I'd like to use 186 grains on jacketed lead on these low lifes. Too bad we ALL pay for them.
What I dislike most about client purchases is it adds one more layer of complexity, which is fine while everyone is playing nice, but not so much if they don't.
I have a whopper of a good story related to this, but everyone is lawyered up and it looks like it will have to go to court so mums the word.
:-)
Beer was created so carpenters wouldn't rule the world.
"it adds one more layer of complexity"it's a guarantee of more time in communications to straighten out foul-ups and another guarantee of some delays.
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I tell the customer to get the price installed when they go shopping somewhere else. I also explain that it is best because if there is a problem then they will take care of it and if something does not work they can only blame themselves. It works out very well because I have never had anyone come back and tell me that someone else can provide the materials and install it cheaper.I can easily beat Home Depot any day of the week on cabinets etc. Their cabinets are cheaper in price and quality compared to what I make but their installation price is outrageous partly because they have so many small cabinets to install that make up the longer runs. If the run is 12 feet I make one cabinet 12 feet long instead of 4 3foot cabinets.
Edited 7/1/2008 6:03 am by gb93433
I make a single 12' cabinet by putting the 4 3' cabinets together on the floor before lifting them, er... I mean it, into place. I'm guessing the depo pepo install, shim, level them one at a time, dogmatically adhering to the rules of installation.
And then they fall off the wall! LOL--------------------------------------------------------
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Craig,
I address it at the time of the proposal, at which point I explain and justify my markup along with other particulars.
Here is my wording in a proposal for a recent kitchen job:
• Some materials, to be decided on by mutual agreement, may be exempted from the 20% mark-up, under the following conditions:
1) Exempted materials and their installation are not guaranteed by Meetinghouse Restoration.
2) The clients will be responsible for procurement and timely delivery of exempted materials.
3) Should the value of exempted materials exceed $5000.00, Steven Zerby's hourly labor for the entire project will be billed at $38.00/hr rather than $35.00/hr.
I usually exempt appliances. I want nothing to do with the appliances. I would rather they bore the responsibility for getting them, and when they don't fit, are broken, missing pieces, it's not my problem...well, ok it is my problem, but it's not my legal responsibility.
Steve
I like the wording in your proposal. I like the idea of the rate change for more than $5000.How do you explain and justify your markup? Do customers ever object or resent it?
Craig,I explain that the markup is there for several reasons, one of which is assumption of risk. If I have to stand behind it, I'm taking a risk that has to be paid for somehow. The other thing they are paying for is my knowledge and expertise about what is going to work well or not. and last but not least I say this: I'm running a business, and that's one of the ways money is made in business. I don't know anyone in business who sells something for the same price they paid for it.Refusing to warrant things they acquire themselves helps them understand that you are indeed assuming a risk.That said, if I ruin something while installing it, whether they bought it or I did, that I'm responsible for. But that's what insurance is for. I've never had to make a claim, but I have eaten a few things, but nothing that I couldn't absorb.Nobody's ever objected to my face. I don't know if they resent it.Steve
Edited 6/26/2008 11:33 pm by mmoogie
"That said, if I ruin something while installing it, whether they bought it or I did, that I'm responsible for."Not necessarily! The responsibility for ruined goods by hourly workers is negotiable. I once got involved in a very long negotiation about an interior french door. A friend of mine had a brother that was a doctor and he called me to set a door that he was supplying. I told him that it would probably take me half a day including drive time. At some point in the conversation I told him. "oh by the way, because I'm not really making any money on that door and the labor bill is so small, I'm not going to be responsible if I accidently run the saw wrong and ruin your door.". That stopped him cold in the discussion and we started going round and round. I just held my ground and explained that I'm not willing to risk having to pay for a $1200 door on a $150 labor bill. The discussion went on for awhile as I educated him about MY REALITIES! He called back the next night and we eventually agreed that he would pay me an extra $100 for my risk! I knew I wasn't going to ruin it, so I took the money and did the door. The point is that the risk is a negotiable item. Bob's next test date: 12/10/07
>>Not necessarily! The responsibility for ruined goods by hourly workers is negotiable<<Good point. I've even managed to negotiate my way out of a couple of my mistakes after the fact just by the hang-dog look on my face!Steve
price and disclaim
price - the job according to what you need to make in order for it to be worthwhile for you including having to go do the inspection and up front work, get that established before you go out and get that check first when you leave the measurements, etc
disclaim any liability - in writing- for any errors in measurements, etc
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
I used to charge extra for services of installing counter tops bought by a customer. The saw shop I used could cut a counter top in or out square as needed. This saves a lot of time scribing in a top. I charged 20 bucks a foot then and if they bought the top themselves I charged 30 bucks. A sink cut out went from 65 bucks to 95 bucks. And If I had to fetch the top I charged for that. Basically most of them didn't have a clue as to what takes place to install a top.
The old story... (all you got to is just) If thats all you have to do, then why don't they just put it in themselves.
Great replies from everybody! Here's how I'm thinking about handling these type of situations:"I like to offer a turnkey, no-hassle service where I get my material from a supplier I know is dependable. If I handle the material, I can guarantee my price, materials, installation and handle any problems which may come up. All you have to do is pick the color. If you get the material yourself, you'll have to assume some of the responsibility and hassles. What are you willing to take on? "If they already have the material or still want to get it, I'll give them a fixed price which includes a premium for the hassle.If I'm T&M, I'll justify my markup .What do you guys think?
Sounds good.The job I'm doing today has homeowner supplied materials, but the guy used to work for Andersen windows and has enough experience with the trades that I have not had issues with prior jobs for him......but, today one of the doors I was to install is the door to the garage. He got one that is not fire-rated. Fortunately, I have enough other stuff to do there and he will have the proper door for me on Monday.Even having to take 5 min. and explain why this door will not work, can create some tension, needlessly. Better to avoid as many of these things as possible.Later,Bass
There's always something. Thanks for the feedback.
I think you have a a good reply, but for what its worth:
My contract states :"If you want to provide your own materials, thats fine, I can give you a list or you can chance it on your own. However I will not act as your agent in any warrantee claims on items purchased by you, nor will I warrantee that items you purchased are suitable for the intended use. You will be responsible for returns, defects and warrantee claims on Items supplied by you. You will also be responsible for additional labor charges for any removal and reinstallation of materials supplied by you due to warrantee claims or if the item is deemed unsuitable for its intended use.(not exact wording,but close)
After reading this, most people let me supply materials
I do usually suggest clients purchase thier own appliances and sometimes unique plumbing fixtures because I dont WANT to warrantee those things
I really like the wording in your contract. It gets to the issues. Thanks for posting it.
Craig:
I'll give you another, probably unusual perspective. In my business, I don't markup materials at all, and I use that as a selling point. It works like this:
On the first meeting with a qualified potential client I say, "Unlike a lot of contractors who charge a margin of ten to thirty pecent, I charge materials at my cost. Whatever it costs me, that's what I pass along to you. If I get a contractor's discount, I will pass that along to you to. I like to work this way because it saves you some money, and it lets me be honest with you about what is quality material and what is garbage. I will only be charging you for my time and not trying to upsell you things you don't need."
The clients are usually pleasantly surprised and accept the idea readily. Now, you ask, how can I justify that policy? Well, I charge my hourly/daily rate for everything I do, including driving to the lumberyard or big box to get materials and including running to get permits, and design consultations, etc. But, since the client knows I'm charging my cost on materials, she or he is happy to allow me to select the brands or types and only offers input on color or style, etc. I've even gone shopping with my clients to pick out fixtures and to talk about what is quality and what is not--of course, I charge for that shopping time.
This policy makes it easier for me on the accounting side too. Plus, I charge for sundries like garbage bags, sawblades and other disposible items in the materials portion of the bill. All in all, it has worked out very well for me, and I also find that I'm working for a better kind of client who trusts me and who feels they are getting a bargain.
John
OK, Now what do you do when that ten thousand dollar door you sold them goes bad and you have to spend 25 hours dealing with the company just to get them to stand behind it, and then spend another twenty hours replacing it, the trim around it and the paint job?you don't have the profit in your system to cover that kind of eventuality, but the customer expects you to take care of it for them.If not5 yet, then you just haven't been doing this long enough.I haven't had one that bad either - just an example, but it happens...I do have other smaler things that gave me a lesson in adding markup early enough to survive.
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Piffin:
I have had things go bad with materials. You can't be in this business for a few weeks without that happening!
It isn't that I'm making less money than those who charge a markup for materials, it's just that I'm making all of it on labor and not materials. At the end of the day I'm walking away with at least as much as the guy using markup as a means for profit. My labor rates reflect how I set up my business model. Now, I'm not doing hourly handyman stuff, either. Most of my projects are between one week and six weeks in length, which allows for a little room to correct for problems.
There have been incidents where I have charged the customer for the time to correct an issue with a supplier or vendor. If I'm managing (as well as doing the construction) on a remodeling job I'm being paid to make it all right, whether that means directing a sub to do something or following up with customer service of XYZ company who shipped a bad product.
John
It is a different perspective. You must have a good relationship with your customers.
Craig:
I do have a good relationship with them--one that I cultivate. I have many clients with whom I have done three or four projects and they think of me as "their" go-to guy. I have also walked away from potential clients (politely) whom I believe are not going to support their half of the relationship. Either I tell them that my skills or schedule are not a good match for them or I find some other face-saving way out. You can usually tell within minutes if a client relationship is going to work well or not, and it is better to walk away than to suffer the mental and monetary losses that will follow.
I'm also careful how I advertise and market my business. I'm not in the yellow pages or the coupon mailings, etc. Instead, I use highly selective ads in certain local publications, I use direct mail to very targeted lists, I push my website more than my phone number, and, of course, I rely on word of mouth from existing clients. Even my company name is meant to attract certain types of clients. The result is that I don't have every Tom, Dick and Harry calling me, I just have well matched clients calling me who have usually already sold themselves on me.
John
Great tips on finding the right customer to begin with.I really like your website.
Edited 6/29/2008 9:09 pm ET by CraigF
I like your website too (http://www.enduringcharm.com is your site, I assume). Reminds me how much I need to work on mine. :)--------------------------------------------------------
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I think that a job has a certain value, a certain amount of profit to be fairly made. Marking up materials and subtrades for the GC is one method of getting there. If a customer wants to be a supplier, raise the labor rate. Hold fast to your profit, no matter how it is calculated. Let him be responsible for any problems with the product.John
What did you get for a top removal and disposal ?
I ussually charged almost as much for a removal as I did an install and added an hourly rate if I had to empty cabinets or wait for them to get things out of my way.
My rates weren't as high as yours for long time. took me a while to figure out the corrected value of my work to make any money.
That became a key benchmark for me later on, when I put my business back on a part time basis.
I did charge a disposal fee. I charged $65 plus the tipping fee at the dump.
I did this with my plumber. WE agreed to the following... If it doesn't fit or work properly it's your dime for the repair/replacement no matter what.
We missed the rough in for the ped sinks. Everything else was dead on and we both were very happy with the end result.
I should have added that I did this because he couldn't get what was available to me.
Edited 6/27/2008 6:20 pm ET by RobWes
Glad to hear it works from the customer side too.
The risk isn't worth the reward without a markup. Cutting a sink hole in the counter is an example. If all goes well I get a partial hour. If it goes bad, I have to buy a new counter from a place two hundred miles away. What happens if I miss a measurement on a window?
What could possible go wrong? :D
If you screw something up it is still your responsibility, no matter who purchased the item in question. You've cut counters before, and installed windows. That's your profession.
Of course, they are also taking on a responsibility, to make sure and get the right stuff. You look everything over and if you see the countertop or window isn't going to fit, they screwed up. Not your problem.
As for the partial hour, don't you have a minimum?
Bottom line is, you have the tools and the skills. You can see in advance if there are potential problems, and you know when someting isn't going to fit. Assuming it will fit, get it installed, make your customer happy, put some dough in your pocket and be done with it.
And most importantly, don't screw it up.
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See some of my work at TedsCarpentry.com
I've never cut a sink hole wrong and wouldn't expect to. However, I wouldn't rule it out.I've never burnt a customers house down, but I feel its good business to carry insurance in case something happens.I've got to account for possibilities somehow.The job that really got me thinking about this is when I measured around $2000 of windows for a customer who was buying them direct from the lumberyard. The customer cuts me out by going direct, yet am I on the hook?It's all got to be compensated for somehow--disclaimer, higher hourly rate etc.
It's all got to be compensated for somehow--disclaimer, higher hourly rate etc.
Sorry, but I don't buy it. By the same token you don't have to order them, deliver or wait around for delivery, unload them. You go there and the windows are just waiting for you to install them. The only thing you're compensating for is if you mess up with the installation. That doesn't make sense.
Even if you go there ahead of time to measure for them, you charge your minimum for that time. I spent 2 hours with a customer just yesterday going to HD to order $4K in windows, and an hour before that measuring. It's all billable hours. So, except for your own possible (but not likely) mishaps, I don't see exactly what it is you're compensating for.
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Edited 6/29/2008 9:01 pm by Ted W.
Say you have two jobs:Hanging drywall-worst that can happen is that you buy another sheet or patch something.Installing a $50,000 item.(Hey, it's my post I can exaggerate as much as I want.)Same amount of time. Both are already delivered. Do you charge the same?I'm not so much arguing as trying to reason out things for myself.
Well I wann argue! :D
No, not really. Just a topic worthy of the roundtable.
Taking responsiblity for a $50K, or even a $10K item merits extra reward because we're qualified to install it. That's not because the custome provided it. --------------------------------------------------------
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Reminds me of a Monty Python sketch I saw. A guy is sitting in a booth that has a sign saying Arguments over it. Another guy walks up."So this is an argument booth""No it's not"It's interesting to see how different people account for different things. It all comes down to being compensated and there are different ways of getting there.
That was by far one of my favorite Monty Python skits. Probably because I can relate. :)--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
We adopted a policy of adding in our mark-up, profit or whatever you want to call it on the installation side while leaving our materials in at cost to beat the big box pricing game. For those who insist on supplying the goods, we use the following, which you're welcome to cut & paste onto your own letterhead:
RE: Warranty Policy for XYZ, Inc.<!----><!----><!---->
Dear xxxxxxx,<!----><!---->
We are more than willing to accept and install any materials you or others may have purchased. However, before we begin the installation, I want to make you aware of our warranty policy. This policy is the direct result of our having dealt with factory “seconds” or, in some cases, substandard materials that proved to be defective following an installation. We’ve also found it takes a great deal longer to obtain homeowner-purchased materials at consumer outlet stores than when we place orders with our traditional material suppliers. We’ll gladly pick up your fixtures and/or materials, but we will need to bill for all of the time involved. Warranty returns of defective items from consumer outlet stores is often an arduous time-consuming task, which you may want to deal with directly in order to avoid our billing for the wasted time. Please be aware that few products today are sold with all of the items needed for a completed installation. As a result, you will be billed for any additional items required to integrate your purchased products into the project. <!----><!---->
It is our policy to provide a full one-year labor and material warranty only on materials purchased through XYZ, Inc. When others provide materials, such as HVAC equipment, fixtures and/or faucets, we do not include any warranty for either the labor or materials. <!----><!---->
In the event one of these products should not fit in the space as needed, be incorrect for the application, break or prove to be defective, the repairs/replacements will be charged on a time and materials basis. Those charges will include lost time from contract work, time spent dealing with any defects, time lost because the products are not compatible with standard fittings, and any material costs involved which can include sundry items associated with the installation of the materials/fixtures.<!----><!---->
Warranty expenses are, on average, covered by the normal profit margins we would otherwise gain from the sale of these items. It is imperative that all parties involved in this process understand our position prior to proceeding with bidding and/or construction.
<!----> <!---->
Acceptance of Warranty Policy - The above specifications and conditions are satisfactory and are hereby accepted. You are authorized to do the work as outlined above. Payment will be made as specified. I am authorized to sign this agreement. In consideration of the attached proposal by XYZ, Inc., the undersigned personally guarantees the payment of all indebtedness pursuant to said proposal. <!----><!---->
<!----> <!---->
Date of acceptance_______________________<!----><!---->
<!----> <!---->
<!----> <!---->
Authorized signature___________________________Title_______________________<!----><!---->
I read that as simply you raised your rates, regardless of who provides the materials. You don't tack on extra for the materials you provide and you don't take responsability for the integrety of the materials the homeowner provides.
Makes sense to me. But that contract reads as if you just made it up as you were sitting here. No offense intended, just being honest. --------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
No offense taken! It's actually been a long-term development that arose out of a conflict. A customer purchased a product that turned out to be defective. She demanded we warrant the product, which really struck me as odd so I asked her if she had purchased motor oil, took it to a garage, they installed it in her car and it later proved to be defective and damaged her engine - would she thing the garage was responsible? "Yes, absolutely." Call that a defining moment. We either would refuse any installs with products supplied by others or develop a policy that covered these issues.
Interestingly enough, the document has turned lots of those I want to supply it to sales where we get to supply high-quality more-reliable products. For those who still want to provide the goods, we have our profits built-in & at a lower risk.
It doesn't say "United Way" on the side of our trucks and profit is not a dirty word. They want the knowledge and expertise we (the collective we) have and that's the real value we bring to the table. When contractors lose sight of that value and place it on the product side, they become a commodity item & then all that matters is who has the lowest price.
""Yes, absolutely." Call that a defining moment. "WOW is all I can think to say!
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Your warranty policy is filed for future use."It doesn't say "United Way" on the side of our trucks and profit is not a dirty word."That's embedded in my mind as a reminder. Great line.
Excellent addendum DY473! Thanks! Bob's next test date: 12/10/07
"Hanging drywall-worst that can happen is that you buy another sheet or patch something."
Your example gets to the heart of the matter. Hanging drywall sounds pretty problem free, but I've had to go after a drywall sub for damages to hardwood floors and my time to get at the leak, when he inadvertently screwed through the pex shower supply line. It's not just the obvious big ticket items that expose you to liability. All jobs need to be priced with this in mind.
That's true and something to keep in mind.
I suppose it all comes down your business model .... and your customer base!
With box stores everywhere, the customer has direct pricing information that he never had before. If your supplier is charging you more than the box store is charging for a similar product, you need to know why - and be able to explain it to the customer!
Yet, only very rarely are the two products actually the same. In the trades, we see that with the power tools we use all the time - the one at the box store might look like the one at the pro's tool store ... but one sure seems to work better than the other!
I'm a contractor - not a warehouse. I try to stock as little as possible - that is, I let the supplier do his thing, while I do mine. Let's face it- maintaining an inventory has its' own risks and expenses. These expenses, IMO, belong in your base rate - not your mark-up. But that's my model .... it may not be yours'.
Some things are best supplied by the customer- either because they are unusual, or because personal tastes are so varied. When this happens, it is critical that the customer understand the responsibilities and risks they are assuming. For example, if you need more material for 'set-up' than the customer estimated, he has to understand that getting more is his problem. Ditto if he mis-measured, essential hardware is missing, etc.
The biggest 'red flag' is when the relationship starts off with the customer assuming that 'everyone's a crook.' Unless you get that sorted out right away, the job is probably more trouble than it's worth.
Most of my customer base doesn't really understand and is suspicious of rates, markup etc.That's why I'm glad I'm getting some good tips from you guys here.
could you back up the statement that the tools bought at big box stores are different than the tools bought elsewhere?
I think you can't, it appears to be something said an passed on with no backup.
Well, I have two DeWalt drills. One -from the box store- came with stickers proudly announcing it had been "Inspected whit pride." Yup, they mis-spelt "with." The other, purchased from a tool supply house, lacks such a marking. The "inspected" batteries needed rebuilding within 6 months. The batteries from the other set lasted 2 years before rebuilding. (Batteries are rotated between several tools).
The "inspected" tool had a rubber covered chuck. The other one has an all-steel chuck and, supposedly, carbide jaws.
The "inspected" tool became noticeably noisier after a few uses. By comparison, the other remains quite a bit smoother sounding. Price difference? Maybe $20. Performance difference? Immeasurable, but real. Pure coincidence? Perhaps. On a different tack ... the box stores sell the "white" Makita impact driver for about $200 (in a set with a drill). The tool house sells the impact driver - alone - for over $300. This 'blue' one has double the amp-hours in the 18v Li-ion battery, and lots more torque. To give Makita credit, the part numbers are different, as is the appearance of the tools. Which brings up another matter ... part numbers. Look closely, and it seems every store has its' own part numbers. Are the tool makers just changing the packaging - or is there more to it? Your guess is as good as mine.
I guess the HD in a part number for da' Deopt doesn't stand for heavy duty, eh? :)--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
customer... I have from _______ ... how much to install???
me... I'm sorry I don't/won't/will not install their materials... EOS...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!Forget the primal scream, just ROAR!!!
That's another way to do it. :)--------------------------------------------------------
Cheap Tools at MyToolbox.netSee some of my work at TedsCarpentry.com
Renosteinke,
The white 1.5 Makita drills are openly marketed as a lightweight alternative to the 3.0 blue drills and you can still use the larger batteries if you buy them aftermarket.
I agree that the big boxes will often sell cheaper units than those found at a specialty store, but I don't think you'll find the model numbers identicle. If you look up a product on the manufactures website before buying the differances are usually made clear.
Matt
Sure ... it's usually found in the "fine print." Yet, to return to 'customer bought materials' ..... Walk down the lumber aisle of your local 'big box,' then visit a real lumber yard. The mass merchants sell stuff the LOOKS like real lumber, but is absent any industry standard certifications. For example, APA plywood grades include such terms as "AC interior" ... rather than the 'good one side' or 'one side sanded' nonsense the boxes carry.
Ditto in the plumbing aisle. Copper tubing is normally classed as K,L, or M .... there's no such thing as 'utility grade.'
This site has seen plenty of discussion as to whether house branded paints are really comparable to pro-quality name brands. Ironically enough, when the box stores are forced to carry a similarly rated product (like, say, KD stud grade lumber), their price advantage goes away. Heck, my parts houses typically beat the boxes when you are REALLY comparing like-to-like.
Me thinks you have a problem with big box stores. I am not argueing with you, but I have never had the problems you are talking about.
Yes there are some #### items sold at these stores, but not all by any means. I have bought lumber from these stores with the appropriate stamps at considerable discount.
I still prefer the lumber at our one remaining lumber store, justy wish I didn't have to pay such a premion.
I think you are wrong on the tool thing, will talk to a friend who sells Makita and find out their policies.
I know there is a difference with Makita, you can tell by their colors, but the rest, comes fromthe same line. Maybe different part numbers, but as far as I could tell, same tools!
"Comes from the same line" Anyone who has ever worked, in any manner of factory, knows that there is no substance to that sort of statement, even when true. It's a classic instance of 'non logic.' Why? Because production change-overs take place all the time. There's not a factory in the world that, with the swapping out of jigs, forms, and parts bins, cannot be made to make an entirely different product in quick time.
Indeed, even when they firm is making the 'same' product, there are often changes in the product made during the production run. Product improvement, 'sharper pencil' engineering, defect mending ... many are the reasons. Yet, one can make a few guesses. Guess #1 is that the manufacturer isn't running a charity, and he's not about to offer anyone a lower price without making up for it somehow. Quantity discount? Yea, right. His line is already at 100% - order size alone isn't any incentive for him. This was probably best explained by Akio Morita (one of the founders of Sony) when he sat for a Playboy interview. In his case, they had HIGHER pricing for larger orders. In the end, it doesn't matter who the manufacturer is, nearly as much as who you get it from. After all, that's the guy you see if there's a problem. My local guy has more reason to care - I'm one of maybe a couple hundred customers, not one of a million. To some degree, the entire issue is pointless, though. Last Christmas, I accompanied my recently military-retired brother to get his first (personal) tool sets. The tour we made of the box stores, department stores, and hardware stores really brought home just how many of my tools simply are not available at the mass outlets. Nor am I talking exotic specialty tools .... even my particular pliers and screwdrivers are hard to find.
I think you are right for the most part on tools, except notice that the example haad the external parts being cheaper - the chuck and the batteries. would not cost the maker more to use cheaper chuck on the HD models and throw in returned batteries that barely passed inspection.Some manufactured items can have cheaper substitue parts without increasing factory costs. The lighting fixtures at the big boxes have the stamped metal parts so thin that they are practically foil instead of fitting the thickness gauge.With Windows, the guy at the Andersen factory told me how they meet the price demands of HD. HD was demanding a purchase point price at just about the cost of production so no way could they do that and stay in business. They told HD they would sell them certain common sizes IF HD would take so many thousands a month and this and that. HD can only sell about 40% of the window models that Andersen makes.
So anderssen increased their volumn in certain sizes and lines specificly for the HD market, but refused to lower the production standard.Another thing I notice with products at the big boxes - either the package containing it or the warrantee card specificly states, "Do Not return this item to the store if defective, call us at this number instead"
Which saves HD a lot of service cost.I ran into that one year with some sump pumps I bought for a flooded cellar. A trip to the mainland and back and I found out that 2 of three did not work from the git go. Another round trip and HD was pointing out the words on the box and telling me don't bother us.I pointed out to them that there is an implied serviceability warrantee that retailers must abide by in law, and that there was no way my client wanted to wait for some foreign company to send a replacement from who knows where. I was getting fairly loud and obnoxious right there in the front of the store before they saw things my way. with credit in hand,I searched the shelves for an American made brand and found more.BTW, this was a weekend and lots of flooding going on all around or I would have bought from my normal yard.
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Regarding diff in tool quality...It's BS to state that the same tools are available at different quality levels with the same model number.Obviously Dewalt makes a LOT of JUNK. They also make a few good quality tools. The diff is that the pro yards just don't bother selling the junky ones and HD sells more of the junky stuff than the good stuff.It's up to the buyer to know what the heck you are buying. YOU have to know the diff between their XRP and XR batteries, between the "compact" 18volt #### and the regular XRP tools.Even Bosch is making cheaper stuff - but you have to know what you are buying.Only Caveat to the above is situations where the manufacture of certain tools has gone offshore with no change to the model #.Case in point - the bosch 1587 jigsaw. The industry standard for many years, made in Switz., --- they are now made in China. You may find some of the Swiss made saws in one of your lumberyards, but only because it's been sitting there before the switch was made. Rest assured, ANY retailer buying them new wholesale now are getting China units.The makita LXT tools whitye versions are not hiding the fact that they are reduced capacity lower priced tools - it's pretty darn obvious they are what they are and that is less than the
blue line.If you go buy a Bosch 4000 saw or a Dewalt 745 saw - they're gonna be the exact same saw no matter where you buy them.I'm a small time remodeling contractor - every time I go into a lumberyard or pro paint/electric/plumbing store - I'm waiting 20-30 minutes for slowpoke guys at the counter and slower people in front of the counter. They could care less about guys like me.HD and Lowes offer easy access, and - with some research on the buyer's part, some decent materials. I don't buy my tools in stores anyways - I buy everything online or used.Julian
Edited 7/1/2008 12:51 pm ET by JulianTracy
I never had that experience with HD or Lowes but I wondered how they responded when you told them they have implied warentee?
They backed right down and let me have a store credit for returning them right then and there.
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I kinda thought they might. I had that problem at electronics store, went all the way to the store manager before they understood.
piffen,
i ordered a window from a big box store approx. 23 years ago.
still have not recieved the window since then--the big box has gone out of business---and i have sold the house the window was intended for. anybody else remember "builders square" ? luckily-- i never paid a deposit----but the window just never,never, ever came,, LOL
stephen
They went away when the parent co., K_Mart had their money problems! I think Heckingeres(SP) bought them out.
The big box store offer installation.
How do I know this you ask??? because I did it.
Bow out gracefully an let them have at it.
Countertops are like brain surgery, when it's all said and done you are either a hero or a deadbeat. Never underestimate the rage a customer can spew when waiting months for running water to have it postponed for even a day.
"Countertops are like brain surgery, when it's all said and done you are either a hero or a deadbeat. Never underestimate the rage a customer can spew when waiting months for running water to have it postponed for even a day."Absolutely!way back in CO, in the mid seventies, I was sub on a few items in a house. While there, I watched the finish carp doing the trim and cab install and countertops. which he fashioned on site with laminate and plywood.I didn't know much at all back then compared to now, so I always learned by watching and asking. I wonder aloud if it wasn't better to let the contact cement dry on both items before slapping them together. The guy said "naw, this new kind is ready to go when I am".So wht do I know?Six months later, the builder can't find the trim sub to replace them cause they were bubbling and blistering. He asked me to do it.I got everything ready one day, spent the next AM on DEMO, sent the HO and his wife out for dinner at the steakhouse while I worked late and got it finished. They had not expected the dinner out but were impressed when I explained that I felt they had every right to it.
Talk about hero!?Over the next two years until the sold and moved, they had complaints about every phase of the various trades who built that house, but they praised me to the heavens and recommended me all around.I was just trying to be efficient and fair, but I learned a lot about marketing and customer satisfaction from that other guys mistakes and the way these people re-acted.
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As an architect I almost always offer the client a clear explanation of what is involved in their own purchases and what risks are inherent. I take it as my responsibility to convey this information specifically so that the builder does not have to deal with these issues at a later date.
Plumbing fixtures (sometimes bought via internet and delivered from a distant supply house) are a good example of where an HO thinks they may be getting a great deal - but which in fact could come back to haunt them.
When it came to my own house the contractor and I reached mutually-acceptable divisions of what I would, and would not, furnish for his installation, taking the 'responsibility factor' into careful consideration. OTOH I'm not a typical homeowner and have very good relationships with local supply houses who are more than happy to negotiate appropriate discounts based on the volume of purchase and potential business that I might send them (sometimes a lot) and who are also happy to stand behind their products.
Jeff
Edited 7/1/2008 10:49 pm ET by Jeff_Clarke
Thanks for sharing an architect's perspective.It's all about making things run smoothly for everyone.