View Full Version : CUSTOMER WANTS A LOWER PRICE
I did a clients residence with 1 cy of half inch brown red rock about 266 sq.ft my cost for the rock is 52.00 plus tax 55.00 total well I charged a total of 146.00 to install,
well the neighbor also wanted it done so I went and measured it was 456 sq. ft which would take approximately 1.5 cy of rock my price was 79.00 for rock and I was charging them 248.00 to install well she said It was too much and that they only need 1 cy she also called the rock company and then gave her a quote for 52.00 per cy well my question is this.... the neighbor said that they just had to pay over 200 for there cat dr bill and that they want me to lower the bill well I was gona charge her the same price as the first one 146.00. but I feel bad she knows the price of the rock and doesn't understand why she has to pay that much she also said that they will deliever it for free. what should I do,, need some input my charge for the stuff is
half in brown bed rock my price is 55.00 total client price 86.18
delievery charge 20.00
install chargr 40.00
03-28-2001, 11:02 PM
Ask her to see if the Dr. will lower the cat's medical bill! I bet it has a higher profit mark up. I wouldn't budge, more material = more labor and expense, tell her to have them deliver it for free and have them install it or pay you what you are asking.
I've had customers see what I pay for trees, I then mark it up 2.5 time and they pay or find some other sucker.
03-28-2001, 11:03 PM
Sounds like a future problem customer!!!! At that price walk away!! Tell her sorry those are my prices and move on. You are in business to MAKE MONEY!!! So dont budge on your prices, she asks why those prices well you have to pick up and deliver and I bet the rock company will charge her more for delivery. Like I said I have found to stay away from these types of customers they either dont pay, compain about work or other misc things. Put your effort into another job.
little green guy
03-28-2001, 11:04 PM
Guess what it's not your fault her cat had to go to the doc. Your not making money feeling bad for people. I don't even deal with people like that because if I can't make money on a job why do it? I can go do another job and make money. Especially if a person is going to call the supplier and all that, they are not worth it. Just tell her you where thinking about charging 200.00 but decided to give them a break and charge 146.00
03-28-2001, 11:12 PM
That's a pretty small project to be haggling over price. I usually just tell my customers that I charge just what I need to in order to cover my costs and make some money. I leave it at that.
If you wanted to get into more detail, figure out all of your costs:WC, Unemployment, Gen Liab, Vehicle Insurance, computers, ISP, paper, ink, tools, equipment, loan payments, eqpt maintenance, fuel, uniforms, wages, taxes, signs on your trucks, business cards, brochures, newspaper and yellow pages advertising, postage, pencil lead, erasers, cell phones, regular phones, dues and subscriptions, meals and entertainment for employees and customers. Tell your customer that to pay for all of that and still make some money, that's what you have to charge. If they don't like that, walk. No sense you paying to do their work.
03-28-2001, 11:26 PM
Why are you paying the same wholesale as a retail phone customer off the street?
Time to renegotiate with the supplier my friend. IMO thats the bigger picture to this story.
03-29-2001, 07:19 AM
Walk away now and save yourself a load of headaches. For that much money, this job is definitely not worth it. Before you know it, you will be doing the job for a reduced price, and then be getting 3 calls a week because stones are spilling out of the beds, its not 'smooth', leafs are in it, etc. etc.. Get out now.
As for the supplier selling the stone to the homeowner, well, I'd give him a call and see what is going on.
Free delivery? That sounds rediculous. If this company is going to sell stone at the same price as they would sell it to you and then deliver it for free this is what I would do.. Call them up and have them deliver all your stone.
Now you don't have to go out and pick it up, you can save money, and they can handle the trucking.
One other thing, its a very bad idea to be telling/showing people what you pay for materials. This is exactly what happens when you do. If they are so interested in this project and want to be this involved with what is going on, then let them do all the work, and while there at it, let them install it and leave you alone.
When you walk into a restaurant and order a hamburger and pay 4.95 for it with a order of fries, do you dare ask the owner the price of the meat and rolls and then begin to bargain with him. Hell no. Thats what these people are doing and you are just playing along with their little game.
[Edited by steveair on 03-29-2001 at 06:31 AM]
Hey thanks to everyone who replied to this message..well last night I went by there residence after work around 12;15am and placed the same price with bid as there neighbor for 146.00 I have not recieved a call from them yet,oh well time to move on ,,,hey thanks again for all your support..
John from OH
03-29-2001, 04:23 PM
At 10% profit, you are putting up with this "customer" for $14.60. It would not be worth the headaches to me. Isn't Tylnol about $5.50 a bottle? Run from customers like this, or refer them to a competitor.
By lowering your price, you have to lower costs accordingly. Lowering your price also indicates to them that your initial price was too high.
Her $200 vet bill let you know how little she values professional landscaping. You could always keep your original price and offer to throw in a healthy cat. LOL
03-31-2001, 08:34 AM
I tell my sales people all the time....
"If it FEELS bad, it usually is".
This one feels REAL bad.....
I agree with most of the guys here.... walk away from it.
And.... you can't survive on that kind of profit anyway.
03-31-2001, 09:50 AM
This is a great way to show why sq. ft pricing is dangerous. Job no 1 was priced at $0.55 sq ft. ( 266 x .55 = 146). We do that job and made a tidy profit, so we price job no 2 the same @ $0.55 sq ft. (456 x .55 = 250). We missed out on this job because the price is too high. Now if we had looked more carefully at the second job we would have reailized that to make the same margin as the first we could have sold it for $206.
Spread 1 cu yard stone
Cost of materials = $55
Mark-up = $31.18
delivery = $20.
Labour = 40
Spread 1.5 cu yard stone
cost of materials = $79
Mark-up = 31.18 x 1.5 = $46.77
delivery remains $20
Labour 40 x 1.5 = $60
Total $ 205.77 $206/456sq ft = $0.45 sq ft
Here's the bite, if you price by the unit you will land all the bad paying jobs and loose the ones that are profitable. You revised your bid to $146 even though you needed that much to do a job 50% smaller, what if you got it? Simple you just reduced your profits for the year and started a very bad habit.
Know your costs, recover them, know how much you want to make, ask for it and accept nothing less. Any other way you are giving profit that you have already earned back, and sooner or later that will add up to the keys to your house.
I realise this is a small job but multiply the jobs by 10 and how much more dangerous does this habit become?
[Edited by diginahole on 03-31-2001 at 08:54 AM]
Step 1 figure out how much it costs per hour to be in business. Include all costs. Get help figuring this out if necessary, or read the book by Charles Van Der Kooi.
Step 2 Decide how much profit you need to make this career worthwhile.
Step 3 Price accordingly and never lower. Make money on every single job, or don't do it. (unless it's for charity). This includes working for friends.
Step 4 Check costs and refine. Check back to see if you made what you thought after each job.
Step 5 Concentrate on the areas where you are making the best profit. Aviod low profit jobs.
Step 6 (You are already doing it) keep an eye on your industry so you don't get left behind.
04-02-2001, 09:43 PM
I just bought a box of 9mm shell's for $ 11.00
Thats .22 cents each marked up x 2 for .44 each.
That's .44 cents to take care of the $ 200 vet bill.
Simple, start dong veternairy care on the side. The patients can't talk.
04-03-2001, 12:07 PM
I think you should sympathize with the $200 vet bill for the cat.
Explain to her about your dog... I forget his name, but you know the one. He is the castrated one with three legs, one eye, no tail and is an insulin dependent diabetic since he was hit by a car last week. Oh yeah, I remember his name now, it is "Lucky". Anyway, you have vet bills to pay for him and that is why the price is what you quoted.
Don't lower your prices. You work hard for your money.
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