Question re: markup, quotes

[TheOtter]

I wasn't sure if I should put this in the homeowner forum, but since it's so specific to irrigation, I decided to put it here. Sorry if that was wrong.

I'm a homeowner in the process of cleaning up after the previous owner's crappy work all over the house. We've used the same irrigation company for the past two years for startups/shutdowns, and now we're going to get some real work done: move (and replace) 6 heads for better coverage, and replace the outdoor controller (3-zone).

My question has to do with markup over retail (internet) prices on the equipment. I know some markup is normal, but their quote has the controller box for almost twice what I can find on the internet - $200 (plus $65 for 1 hour labor) for an outdoor Hunter Pro-C controller, when it looks like these things go for around $100 - $110 retail.

Is that normal? It seems high to me to charge labor and 100% markup over retail...

How would you guys react if a homeowner offered to purchase the controller themselves and pay you to install it? Should I get a quote from another company? I've been very happy with the work these guys do (what little I've had done), but I have not been happy with the business' communications - things like being 4 hours late for an appointment and not calling ahead to let me know.

I appreciate any thoughts...

--Rob

[Wet_Boots]

Internet prices are not retail list. Lose that idea real quick, or do the work yourself.

[TheOtter]

Ok - point taken. "Retail" was probably the wrong word. I have no delusions about doing this work myself. As I said, I'm trying to fix up my house after the previous owner did everything halfa$$ed.

Perhaps I should rephrase - is $200 plus $65 labor a reasonable price for that controller? And, if someone called you up and said, "I already have a controller, how much for you to install it?" would you take on that job for labor-only rates (in addition to the other work on the system, which is 4-6 labor hours) or is that just not done in this industry?

I may get another quote simply because of the communications problems anyway, but I'd like to know if this sounds like a typical quote or not, so I know what to expect.

Thanks again...

[Wet_Boots]

It's kind of like having car parts and asking a garage to install them for you. In the world of irrigation, you might actually find a lower price online than your installer pays. But the installer gets manufacturer and distributor support you never will. And an installer will support what he buys and installs. He cannot offer support for what you buy.

As for missed appointments, one does want to keep customers informed, but it's hard sometimes to climb out of a muddy trench to let the next customer know that there's going to be a delay, especially when the current situation isn't completely diagnosed.

[TheOtter]

Fair enough / makes sense. Thanks for the replies. I'm definitely not trying to lowball. I just don't want to be taken for a ride, either.

I understand about the trenches thing, but it seems like every time we've had something done, something has been off with them letting us know what's going on, so it just hasn't felt comfortable. Maybe I'm overreacting, but it's things like the secretary telling us they'll call with a time estimate when our startup date gets closer, and then no call. Or, when we reminded them that the tech said he'd be fixing something (can't remember what) on his next visit, but he showed up without the equipment, saying they didn't put it in the file for him that morning.

I work from home, so it's never a huge deal, but knowing an approximate time helps me schedule my work (meetings and such) or errands around it. I'm sure I'm preaching to the choir - from lurking around here a couple of days, everyone here seems to have a great business attitude.

I like their techs, so maybe a little under-communication is worth the good work, but then again, maybe not?

[ICS]

It's kind of like having car parts and asking a garage to install them for you. In the world of irrigation, you might actually find a lower price online than your installer pays. But the installer gets manufacturer and distributor support you never will. And an installer will support what he buys and installs. He cannot offer support for what you buy.

As for missed appointments, one does want to keep customers informed, but it's hard sometimes to climb out of a muddy trench to let the next customer know that there's going to be a delay, especially when the current situation isn't completely diagnosed.

Well put.....

[irrig8r]

I was challenged by a customer just other day about a quote I gave him for a Sidekick FM 12 remote. (Large property and he just wants to monitor it better.)

He went to sprinklerwarehouse.com and saw that he could buy the same unit for less than I would pay through my distributor, and avoid CA sales tax too.

My distributor said that at that price he would be making less than 5% markup.

So, instead of me buying it and marking it up further and then having to deal with any service or warranty hassles, I suggested he go directly to my distributor, pay the additional markup (but less than I would have to charge him) and then be confident that they would handle any warranty issues that came up for him.

Meanwhile, I'm doing other T and M work for him anyway and will just charge my normal hourly rate to install the pigtail and test it, so I'm giving him a pass on this one.

This is a rare exception to my normal approach.



Remember that we are all in business to make a profit. Even if we enjoy our work we can't afford to give it away.

When a contractor doesn't know his true costs of doing business, that is, just being able to open the doors, answer the phones, and put vehicles and equipment on the road every day, and doesn't price jobs accordingly, then you can be assured he won't be in business long.

[TheOtter]

Thanks Gregg. That's why I came here before making a deal out of it. I wanted to know if the price is fair and reasonable - sounds like it is.

[Wet_Boots]

Controllers especially justify their list prices, because they require more installer support than most anything else.

[TheOtter]

Interesting. Is that because they malfunction, or because most people who aren't familiar with them have trouble operating them?

[PROCUT1]

Thats reasonable markup.

Your not just paying for the controller.

Youre paying for the installers time to order it, pick it up, deliver it, and pay out of his pocket until you pay the bill.

Im not in irrigation, but in other services there is always a markup on parts or materials and thats figured into the profit of the job.

Its all in how the numbers are presented.

He shows you 100 mark up on the controller and 65 for labor.

I would show you a 50 markup on the controller and charge 115 to install it.

We would both charge the same price and make the same money, but you wouldn't question the numbers the other way around.

Thats the reason so many contractors are reluctant to break down their bids into parts and labor. Not because they are being unfair in their charges, but there are many customers who dont understand how the pricing works.

[Wet_Boots]

Controllers do occasionally malfunction, and the only way for an installer to support the controllers he installs is to have some spares on hand. And then the manufacturer updates the controller, and none of the spares on hand can ever be installed as 'the latest thing' ~ it's a hidden cost of dealing with the world of solid-state electronics. You buy one online, and it fails, and you pack it up and ship it somewhere for service and/or replacement, and await its return. That delay in time is not something a pro can accept.

[Mike Leary]

Interesting. Is that because they malfunction, or because most people who aren't familiar with them have trouble operating them?

With a quality controller. the latter is almost always true. However, micro-
processing units are susceptible to power spikes, as they are to large
draws, such as being wired to the same circuit as the garage door opener,
freezers, etc.

[TheOtter]

With a quality controller. the latter is almost always true. However, micro-
processing units are susceptible to power spikes, as they are to large
draws, such as being wired to the same circuit as the garage door opener,
freezers, etc.

Yeah - our current controller is wired using a line coming from somewhere around the side of the house. That's the other thing we need - an electrician to hardwire the new controller properly. The irrigation guy says he'll replace the controller the way it's installed now, but with a strong recommendation to have an electrician wire it properly ASAP (which I totally agree with).

My next call will be to my electrician to see if that sequence makes sense to him. Part of me thought it would be easier (and cheaper, I admit) to buy a controller myself and have the electrician wire it to the house before the irrigation guys come out to do their part, but it doesn't sound like that's the preferred way to go.

I do appreciate all the responses!

[Mike Leary]

If you trust your sprinkler guy, let him buy & install it. He's going to make a buck,
but he then handles the warranty, etc. And quite honestly, NONE of us like to work
on homeowner-bought stuff. Good luck.

[Wet_Boots]

One possible division of labor would be to have the electrician run a dedicated circuit to an exterior "in-use" box, into which the sprinkler guy can then plug in an outdoor controller.

[Mike Leary]

One possible division of labor would be to have the electrician run a dedicated circuit to an exterior "in-use" box, into which the sprinkler guy can then plug in an outdoor controller.

I like a hardwired box with a on/off switch, all in conduit.

[Wet_Boots]

I also like hard-wired, but there is something to be said for the ability to pull the plug on an electrical device. This is also a factor where your state laws can come into play. Some states almost always have indoor controllers fed from plug-in step-down transformers, so there is no installer need to connect any line-voltage wiring, not even a line cord.

[Mike Leary]

I also like hard-wired, but there is something to be said for the ability to pull the plug on an electrical device. This is also a factor where your state laws can come into play. Some states almost always have indoor controllers fed from plug-in step-down transformers, so there is no installer need to connect any line-voltage wiring, not even a line cord.

All true, 'cept those "water-proof" boxes for plugs look so hokey. I am talking about outdoor mount. :)

[Wet_Boots]

Sure, but if the sprinkler guy isn't supposed to touch line-voltage wiring, then he's going to plug in the controller. Kind of a pain in the butt, since color-coded power wiring is really straightforward. I agree that those "in-use" outdoor covers look hokey, but if they're made from poly-carbonate, they're pretty strong.

[bobw]

Thats reasonable markup.

Your not just paying for the controller.

Youre paying for the installers time to order it, pick it up, deliver it, and pay out of his pocket until you pay the bill.

Im not in irrigation, but in other services there is always a markup on parts or materials and thats figured into the profit of the job.

Its all in how the numbers are presented.

He shows you 100 mark up on the controller and 65 for labor.

I would show you a 50 markup on the controller and charge 115 to install it.

We would both charge the same price and make the same money, but you wouldn't question the numbers the other way around.

Thats the reason so many contractors are reluctant to break down their bids into parts and labor. Not because they are being unfair in their charges, but there are many customers who dont understand how the pricing works.
:clapping: nicely put

[TheOtter]

Sure, but if the sprinkler guy isn't supposed to touch line-voltage wiring, then he's going to plug in the controller. Kind of a pain in the butt, since color-coded power wiring is really straightforward. I agree that those "in-use" outdoor covers look hokey, but if they're made from poly-carbonate, they're pretty strong.

If the sprinkler guy installs the new controller the same way the current controller is installed (which was his idea), would the electrician then be able to come in after the fact and hard-wire it without messing with the controller-to-valve (or whatever) connections? If so, my sprinkler guy may have the right idea all along.

[Wet_Boots]

Hunter did have a fairly good compromise appoach to this situation, for installing their indoor-only SRC controller outdoors. It was a weatherproof box that had room for both the SRC controller and a regular outlet box, into which the stepdown transformer plugs in. You got the secure look of a hardwired outdoor case, with the plug-in convenience of an indoor controller.

[Mike Leary]

If the sprinkler guy installs the new controller the same way the current controller is installed (which was his idea), would the electrician then be able to come in after the fact and hard-wire it without messing with the controller-to-valve (or whatever) connections? If so, my sprinkler guy may have the right idea all along.

We don't touch the electricians stuff, they don't need to touch ours.

[TheOtter]

I think I see. So the small box at the bottom left is what the electrician did, and the rest was you?

[Wet_Boots]

Hunter's own instructions for the outdoor controller installation take a conservative approach, and assign all the line-voltage wiring to an electrician. That would mean the sprinkler guy wires the zones to the controller, but the rest of the work is done by the electrician. Like so (http://www.hunterindustries.com/Support/Installation_Adjustment/Owner_Manual/Controllers/ProC/ProC_Instructions06.html)

[TheOtter]

So under Hunter's conservative approach, it would be best to have the electrician come second, after the sprinkler guy is done connecting the controller to the zones? Or does it matter? Just thinking about who to schedule first here.

[Mike Leary]

I think I see. So the small box at the bottom left is what the electrician did, and the rest was you?

Small box is a on/off switch, he came into the clock, which I had already
hung, with the lower splice box containing field wires & remote pigtail.

[Wet_Boots]

Sprinkler guy first. Controller manufacturers like to have all the low-voltage wires connected before the controller is powered up.

[Mike Leary]

Like so[

"Like so" Where's the linkie?

[Wet_Boots]

"Like so" Where's the linkie?You mean this link? http://badgerbadgerbadger.com/ (http://www.hunterindustries.com/Support/Installation_Adjustment/Owner_Manual/Controllers/ProC/ProC_Instructions06.html) :)

[Mike Leary]

Yup, you got it , finally.Those damn transformers have always bothered me, tho
someone (Hardie/Irritrol?) had a flange on the top to screw the transformer to the
convenience outlet.

[TheOtter]

Thanks guys. You've been very helpful!

[Mike Leary]

Mite print this one for your sprinkler boys.

[AI Inc]

Otter , I work out of Nashua. Im $172.95 for the clock, $65 for the service call.

[AI Inc]

Otter , I work out of Nashua. Im $172.95 for the clock, $65 for the service call.

If your interested you can use our online service request form at www.advanced-irrigation.net

[FIMCO-MEISTER]

Had a disagreement with a fellow tech on markup. He was charging 10.00/1804 plus our hourly rate of 95.00. Claimed that the 10.00 charge was not just for the head but knowing how to use and install it. I figured that was what the 95/hr rate is for. The problem with his approach is that nobody is going to let him change out 20 heads at that price. So assuming list on the product he would make a lot more on the popups and job plus get an extra hour service in. Sometimes I think highly priced products are an excuse to scare off letting the job get bigger and a way to avoid carrying inventory.

[DanaMac]

Had a disagreement with a fellow tech on markup. He was charging 10.00/1804 plus our hourly rate of 95.00.

I usually charge 10.00 for an 1804 and a nozzle if it is just one or two. More than that and I charge around 7.00

[dtanovic]

Basically he is charging you $265 to install a controller that cost him at most $100. That's $165 for one hour's work. Right up their with what a doctor makes. People are free to charge what they want but it is a competitive business and you you are free to get more quotes.

Don't really understand why list prices are so much higher than the real cost of these items. I'm not trying to stir things up. It just seems like a 100 to 200% or more markup from real cost to list is excessive.

[Wet_Boots]

Basically he is charging you $265 to install a controller that cost him at most $100. That's $165 for one hour's work.It could be more than an hour, if the homeowner is particularly dim about the operation of the controller. Besides, if I spend an hour installing a $500 controller that I get a $200 markup on, it's a nice return on my investment in time, but the parts are figured separately from the labor. Right up their with what a doctor makes. People are free to charge what they want but it is a competitive business and you you are free to get more quotes.

Don't really understand why list prices are so much higher than the real cost of these items.Maybe because they don't just float into our possession? Time and fuel and taxes and inventory are folded into our markups. I'm not trying to stir things up. It just seems like a 100 to 200% or more markup from real cost to list is excessive.You ought to see what percentage I mark up an Oeticker clamp.

[TheOtter]

If your interested you can use our online service request form at www.advanced-irrigation.net

AI Inc,

Thanks for the info, but I think I'm going to stick with our current company. I figure if my only problem with them is communications, then I owe it to them to mention that and give them a chance to change before I bail on them. I.e., good communication goes both ways.

[Mike Leary]

If your interested you can use our online service request form at www.advanced-irrigation.net

Pimp.........:hammerhead:

[AI Inc]

Pimp.........:hammerhead:

Hey I need to support my habits , like food and shelter.

[Wet_Boots]

....and 35-year-old Wild Turkey

[AI Inc]

....and 35-year-old Wild Turkey

I drink maybe 5-6 times a yr. Usualy at night after snowmobiling.
Fatty food is my downfall.

[Wet_Boots]

I'm more of the glass-and-a-half-with-supper kind of wine drinker. Helps keep the cholesterol dissolved.

[Wet_Boots]

I drink maybe 5-6 times a yr. Usualy at night after snowmobiling.
Fatty food is my downfall.Try to cut back on those saturated fats