Price matching

[mannyb]

Our GC, that we are trying to do business with recently ask why our bids were a lot hire than other bids for same project so our company lowered the bids to get the job. We didnt have any experience with these types of installs but I felt confident we could perform the job and our price fit the type of demand it require for the time frame of 2 weeks, weekend included I find large retailers price shop and then become very aggressive once awarded the job. We did the job in alotted time but the came in over budget on manhours. Management then wanted to know why. I told them we would have come in on budget and 20% margin if they had stayed with original budget but because they wanted to try to get more work from customer they lowered the estimate to get the job. I understand we were not as effficinet as the next guy but also the next probably doesnt have the overhead we have as a company per employee and overhead. The solution for management pn next project is to increase efficiency in the field to match competitors numbers. I was like WHAT! Im sure we could become efficeint enough to do the project in the same number of hours and budget, is this normal for companies to be like everyone else/ I dont think I can give customer a quality work only ok work. Am I missing something? in my way of thinking or is this pretty normal?

 

[James L]

It's pretty common for people to see the lowest price as normal, and every other price as too high.

Sometimes it's just not a good fit.
I once worked for a commercial shop that had a great long-standing GC client. That builder decided to take on a large residential retirement project (duplexes and 4-plexes) and my boss didn't want the GC to entertain any other electricians, so he took the job.

I tried telling him it was a big mistake. I was his only employee with residential experience. He did 10 units and saw he was losing $1,500 per unit.

Sometimes the other guy is cheaper for a reason

 

[petersonra]

Sometimes the other guy is cheaper for a reason

It is not unusual for companies to have niches where they are very good at what they do. People like to think they do shoddy work but more often it is just that they are very good at doing certain things very cost effectively.

An electrician once told me he used to get the carpenters to drill 3/4 inch holes in all the studs for him by bringing them donuts and coffee. Saved him a lot of work and the carpenters got free donuts and coffee. I think he told me the carpenters would put 3 or 4 studs together and drill the holes thru them at one time before installing them. Much easier than doing it in place.

I do not worry all that much how pretty stuff is that is going to eventually be hidden. And a staple gun is just as good at securing NM as nail in staples, and much more cost effective. The bulk pack receptacles and switches that you used to be able to get for 25 cents or so at the big box stores, work as well as the more expensive ones.

 

[James L]

An electrician once told me he used to get the carpenters to drill 3/4 inch holes in all the studs for him

My brother paid his lumber company to order pre-drilled studs to make it easier for me to wire his house. Two problems:

the crap-penters didn't turn them all the same direction, sosome were high and some low

They were drilled 16 inches from the end, which put the 17½ off the floor. I didn't use any of those holes

 

[letgomywago]

I think this is a gc who price shops then tells their next target that they get the job for X and offer future work to make up for the loss. Well I doubt he'll use you guys much and will move onto the next one.

 

[ptonsparky]

I think this is a gc who price shops then tells their next target that they get the job for X and offer future work to make up for the loss. Well I doubt he'll use you guys much and will move onto the next one.

I agree.
Plus if you have never done similar work, your guys will have a learning curve and the 1st job will be it.

 

[blueheels2]

I’ve got a GC I did 130k with last year in a dditions and remodels. Though we had a great relationship. But I found out this week that they have started using someone cheaper for the low profile projects and my guess if it goes well they will use them on the high profile too. And I can see where every crew, foreman or owner has brand new trucks. I’m not lowering my price to support their spending. If the other guy is willing to do it cheaper let him.

 

[James L]

I’ve got a GC I did 130k with last year in a dditions and remodels. Though we had a great relationship. But I found out this week that they have started using someone cheaper for the low profile projects and my guess if it goes well they will use them on the high profile too. And I can see where every crew, foreman or owner has brand new trucks. I’m not lowering my price to support their spending. If the other guy is willing to do it cheaper let him.

I've gone through similar. But they started hiring a cheaper guy for the easy stuff like basement finishes, and wanted me just for the really difficult crap. I told them just have the other guy do all of it

 

[readydave8]

I have no problem doing the work others don't want or can't do, since I make more money that way

 

[James L]

I have no problem doing the work others don't want or can't do, since I make more money that way

My issue is that I have across-the-board opening prices. There are tiers, but the prices are set to take the good with the bad.

For instance, a basement rough-in in a 1990s house is usually easier and faster than a 1920s house. Same with kitchens and baths. Finishes are about the same

Most everyone in these parts want a fixed (or mostly fixed) opening price so they can estimate quicker. And easier.

I usually make 150-170/hr if it's a newer home, but only 65-70 on an older home. If there's a good mix of both I'm happy enough. But if they want to have somebody cheap do all the newer, easier stuff and ask me to work on all the older stuff, no thanks.

15 years ago a guy asked me for a bid, then told me it was too high. Then he had his brother-in-law wire it for 15/hr and asked me to go troubleshoot it after the finish. Nope, sorry

 

[letgomywago]

My issue is that I have across-the-board opening prices. There are tiers, but the prices are set to take the good with the bad.

For instance, a basement rough-in in a 1990s house is usually easier and faster than a 1920s house. Same with kitchens and baths. Finishes are about the same

Most everyone in these parts want a fixed (or mostly fixed) opening price so they can estimate quicker. And easier.

I usually make 150-170/hr if it's a newer home, but only 65-70 on an older home. If there's a good mix of both I'm happy enough. But if they want to have somebody cheap do all the newer, easier stuff and ask me to work on all the older stuff, no thanks.

15 years ago a guy asked me for a bid, then told me it was too high. Then he had his brother-in-law wire it for 15/hr and asked me to go troubleshoot it after the finish. Nope, sorry

Set up assembly pricing and flat rate pricing then you can if they're trustworthy give them some of your pricing info for their estimates. My price for kitchen and remodel old house outlets is over double what my open stud basement finish outlet price is and that is more than my new construction outlet price. A 4 way switch is much more than a 1 pole in materials and often its a pain to fish those 2 3 wires in where they want.

 

[James L]

Set up assembly pricing and flat rate pricing then you can if they're trustworthy give them some of your pricing info for their estimates. My price for kitchen and remodel old house outlets is over double what my open stud basement finish outlet price is and that is more than my new construction outlet price. A 4 way switch is much more than a 1 pole in materials and often its a pain to fish those 2 3 wires in where they want.

I have similar.

I have tiers to account for the various scenarios...
Tier 1 - new construction
Tier 2 - basement finish
Tier 3 - kitchen remodel
Tier 4 - bathroom or laundry room
Tier 5 - exterior

In each of those tiers I have a standard opening price that covers most basic openings (receptacle, switch, flush fixture). Really, 90% of the openings are covered there.

Then any opening that has a material price over standard, or lots of time, I add that. Such as a smoke detector adds $25, a bath fan varies depending on the size and quality, ceiling fans adds $80, high chandelier adds $200, etc.

 

[letgomywago]

I have similar.

I have tiers to account for the various scenarios...
Tier 1 - new construction
Tier 2 - basement finish
Tier 3 - kitchen remodel
Tier 4 - bathroom or laundry room
Tier 5 - exterior

In each of those tiers I have a standard opening price that covers most basic openings (receptacle, switch, flush fixture). Really, 90% of the openings are covered there.

Then any opening that has a material price over standard, or lots of time, I add that. Such as a smoke detector adds $25, a bath fan varies depending on the size and quality, ceiling fans adds $80, high chandelier adds $200, etc.

The various tiers are good maybe you just need to adjust slightly to take into account remodels take more than twice as long even when open stud since you're ripping the old stuff out.

 

[James L]

The various tiers are good maybe you just need to adjust slightly to take into account remodels take more than twice as long even when open stud since you're ripping the old stuff out.

I have demo price per opening, too.

 

[letgomywago]

I have demo price per opening, too.

Is it the same as what it is for the new work?

 

[James L]

Is it the same as what it is for the new work?

My demo price is $40 per opening.

A basement will usually have 5 or 6 lights, maybe a receptacle in an odd place, a switch or two that gets demoed to add one in the same place. It's usually an hour or two, and adds up to $240-360

A kitchen typically has 25-30 demo openings, so $1,000-1,200 and usually takes 6 to 8 hours

 

[letgomywago]

My demo price is $40 per opening.

A basement will usually have 5 or 6 lights, maybe a receptacle in an odd place, a switch or two that gets demoed to add one in the same place. It's usually an hour or two, and adds up to $240-360

A kitchen typically has 25-30 demo openings, so $1,000-1,200 and usually takes 6 to 8 hours

Demo for the basement seems light to me for dealing with old tar romex or knt it could be 4 hours if you have to deal with that much. New basements this isn't an issue like you mentioned.

 

[James L]

New basements this isn't an issue like you mentioned.

Me likes new basements

 

[letgomywago]

Me likes new basements

How about advertising this thing hard in your area. Maybe corner the market for this.