Register free!

Reply
 
Thread Tools   Display Modes
  #31  
Old 07-08-2014, 07:15 PM
indylights indylights is offline
LawnSite Member
 
Join Date: Nov 2007
Location: indianapolis, indiana
Posts: 149
James,

If you install a bullet light for lets say $300, and I do too, but yours cost $100 and mine costs $50, who makes more money? I'm not saying that's what happens but I don't see your logic. You are the biggest proponent of not being a fixture salesman, and selling yourself as the expert and designer. So if an expert and designer can command good money for his projects, use what he considers are quality products, gets them less than you for the same exact job with the same amount of fixtures, I don't understand how that's not a sustainable model.
Reply With Quote
  #32  
Old 07-08-2014, 11:53 PM
INTEGRA Bespoke Lighting's Avatar
INTEGRA Bespoke Lighting INTEGRA Bespoke Lighting is offline
LawnSite Platinum Member
 
Join Date: Jun 2007
Location: Muskoka, Ontario, Canada
Posts: 4,009
You won't last long in this business installing fixtures that are emblazoned with a brand name, and that can be instantly searched online, offering offering prices at deep discounts all the while charging the client many times more than the price paid. People talk, reputations are hard to change.

I am not saying that every client will price check your components, but when you are so bold as to markup a fixture by several hundred percent... well that is the type of rep. that is hard to shake.

I always treat my clients the way that I want to be treated in a similar relationship. What would you think of your (insert professional contractor's trade here) who takes a product that so obviously cost him $25 and sells it to you for $200? Our client's are not stupid. They understand that everybody needs to make a decent profit to survive, and they understand that talent and experience come at added cost. What they simply will not tolerate (in the long run) are people who boldface rip them off. If you wouldn't tolerate it at your home, why should you expect your client's to?

The products that I spec. and install are from manufacturers who respect this profession and the people who have built this industry to what it is today. Just try finding discounted NET pricing for OTC sales from the likes of Auroralight, BK, HK, Vision3, Hunza, Excelsior, Hevilite, or even CopperMoon and Illumicare for that matter. (I think that CAST is finally hearing our roar loud and clear and may be backing down from their discount off MSRP program... I know I haven't bought a single thing from them since they introduced that dumb policy.)

Do what you want of course, but in my 16 years at this I have seen some stay and thrive and many others disappear. I have been fortunate enough to develop a system that keeps my operation healthy and profitable through the good years and the lean years. I have no need to race to the bottom and I have developed some excellent relationships with great manufacturers who 'get it'. You go ahead and sell $25 fixtures for $200 bucks if you want, but when you get questioned by one of your clients about it, and they tell others about it, don't forget that I "told ya so".
__________________
James Solecki
INTEGRA ~ Bespoke Lighting Systems ®
JSLDesign Inc.


www.integralighting.com

www.facebook.com/INTEGRA.Lighting

Affiliations: IESNA, IALD, IDA, AOLP, LO, MBA
Reply With Quote
  #33  
Old 07-09-2014, 02:09 AM
indylights indylights is offline
LawnSite Member
 
Join Date: Nov 2007
Location: indianapolis, indiana
Posts: 149
James,

I have been in the green industry for 25 plus years. My reputation is pretty cemented. As I stated previously, I don't use Volt, but not because of their pricing policy. I don't care about their pricing policy (or Cast's, or Kichler's, or BK's, or Hunza's, insert whatever manufacturer you want here of any product). My point is I think you logic is flawed. You price things your way, I will price them mine, and my customers speak just as glowingly about me as I'm sure yours do about you. Regardless of the cost of the products I use, I charge the highest (usually by far) of any of my competitors on most jobs I bid. And I win most of them, not because my clients are stupid, but because they know what they get from me and the quality of my work, relationship building, service, and results. And trust me, I know the plumber who charges me $100 for a job and the one who charges me $175 for the same job are using the same parts for whatever they are doing (and maybe the $175 guy is paying less, and guess what, I don't care), but if the guy at $175 knows what he's doing and I don't have to worry about it ever again, he's getting my business. And while you list some companies who are well respected, several you listed have done nothing to "build this industry in to what it is today". Just because they sell an expensive product doesn't mean they do great things for the industry. And you know this as well as I, several of those "specification grade" fixture lines aren't that special.

Do what you want as well, but when I make more net profit on my jobs than my competitors (and have for years), and everyone knows I'm the highest price, and I still win more jobs than they do year after year don't forget that "I told you so" as well.

Last edited by indylights; 07-09-2014 at 02:18 AM.
Reply With Quote
  #34  
Old 07-09-2014, 02:26 AM
JimLewis's Avatar
JimLewis JimLewis is offline
LawnSite Fanatic
 
Join Date: Dec 1999
Location: Beaverton, OR
Posts: 6,547
Amen to what James just said. That's how I feel too - about charging a fair price to customers.

I always compare it to a high end mechanic shop. If I take my truck in to get a new alternator and the mechanic charges me $119.00 for the AC Delco alternator and $159.00 for labor, I'm going to look at that bill and say, "Sure. That sounds fair." and pay it. Now, my wife on the other hand. She may see the bill when I bring it home and say, "Wow. Isn't that a lot for an alternator?" And I say, "I don't think so. But just to make you feel better, let me call Napa and see." So I call Napa and they tell me that alternator is $119.00 list price but they can sell me one for $99.00. I tell the wife, "Well, we could have picked one up for around $20 less and taken it over there. But who wants to waste time doing that just to save $20. I think we got it for a fair price. Done deal. We're both left feeling the mechanic was fairly priced.

Now the mechanic MAY be able to get parts from Napa or some other wholesaler for way less than I can. Maybe he can get that alternator for $59.00, because of the volume he does. Fine. I could care less. All I know is that I cannot buy it that cheap and the price he charged me was pretty close to what I would have paid. No hard feelings at all.

Now let's say I go to a mechanic and get a VOLT alternator for $119.00. Same thing happens and I call Napa and they say they don't sell Volt. So I go online to find out who does. Quick search for the VOLT alternator turns up several results and I see right away that I could buy one online, with free shipping for $34.99. Now I'm thinking, "WTF!!! This guy is buying some cheap off-market alternators and selling them for 3x the price??? What a Jackass! I'm never shopping there again!"

Of course, not everyone is going to shop you. 90% of our customers never do. But the 10% who do would be totally pissed if I sold them a $40 fixture for $120 and they found out about it. It's a totally unfair profit margin in most customer's minds and if you do enough lighting it will bite you in the A$$ - and it has for me before.

Now I know the next response is, "Fine. Why do you have to list the cost of the fixture at all. Just charge 'by the fixture' - one lump sum, including all labor and materials." I'm not sure most people really like that method of business. Again, referring to the mechanic scenario: you go to a mechanic and he gives you an invoice that says, "Changed out alternator: $249.00" And that's it???? You think most customers are going to be happy with a receipt like that? With no detail of where that total figure came from? I think not. People naturally want to see where the total came from. They want to justify in their own mind that they are getting a fair shake. Even many rich people feel that way.

Your customers might PUT UP with you doing business that way. Maybe because you do amazing work and they don't know of any other companies in your area who do that nice of work so they're willing to put up with your prices and lack of detail just to have you. That may be true. They may still hire you DESPITE your lack of an itemized quote. But I bet if you polled each of your customers and said, "Which kind of quote would you prefer? This one - where I've broken down all the materials and the labor? Or this one - where it just has one lump sum total?" You and I both know what each customer would answer. They'd always want the more detailed one. People naturally want to feel they're getting a decent deal.

Now how the heck did you guys draw me back into this damm argument again!!!??? I'm trying to quit!
__________________
Jim Lewis
Lewis Landscape Services - Oregon
"kickin' grass and takin' names"


www.lewislandscape.com - Portland Oregon Landscaping Company

landscape design Portland Oregon
Reply With Quote
  #35  
Old 07-09-2014, 07:01 PM
Chris J Chris J is offline
LawnSite Silver Member
 
Join Date: Sep 2006
Location: Maldive Islands
Posts: 2,157
If I'm understanding all this correctly, what some of you are saying is that it's ok to charge a lot more than you pay for your materials as long as your manufacturer of choice cooperates and uses a ridiculously high MSRP. So, according to this logic, your really not charging what you call a "fair price", are you? You're not paying nearly as much as that MSRP. I'm pretty sure that the majority of us contractors pay pretty close to the same price for materials..... at least within 5-10 bucks.... so if you quote 10k for a 30 light job and I quote 8,500 for the exact job because I'm saving on the materials, who is going to be mad again? We both end up making the same profit (roughly), but they are going to be mad at me when they search the materials online?
Please just tell me what manufacturer you use the most. I guarantee that I can quickly find those materials online at a deeply reduced price off of MSRP.... So what's the difference? For that matter, how do franchise companies do it when they make their own materials that are not for sale to the public? I assume that they simply create arbitrary numbers to use on their quotes to fit their objective. So their you go!!! Create your own product numbers for the materials you use so it can't be searched at all!! Hell, post your own MSRP online!!
Reply With Quote
  #36  
Old 07-09-2014, 07:44 PM
JimLewis's Avatar
JimLewis JimLewis is offline
LawnSite Fanatic
 
Join Date: Dec 1999
Location: Beaverton, OR
Posts: 6,547
No, what we're saying - or at least what I'm saying - is that there is a typical retail or list price for good quality items. A typical retail price for a truck alternator might be $119.00. And as long as my mechanic is charging me a price somewhat close to that and using a good reliable brand that I recognize, I'm going to be fine with it. Now, if for some reason my mechanic installs an alternator from a brand I'm not familiar with and I happen to look it up and find that they are cheap alternators going for only $35 online, I'm going to be a little pissed at my mechanic, thinking he's raping me on price. But if he installs for me a name brand that I know and have heard of before like AC Delco and I price out an AC Delco alternator locally for around that same price - no problem. I feel like I got a good product for a competitive price. I'm a happy customer.

Our customers are sometimes the same way. They want to know that what they're paying for is a reasonable price for that item. I mostly install Kichler. But we also use Unique and FX Luminaire. And I personally don't sell for list price. I sell for MAP price - which is the lowest amount any online seller is allowed to sell that item for. It's around 12% off list, currently. So then if my client goes and does a search for that item, they'll find the price I'm selling at is exactly the same - or very close to - what they could buy it on their own. I'm still making a real good markup on it and they're still getting the item at the same price that THEY would pay for it. It's a win-win and nobody ever gets upset that we're ripping them off.

So your statement about you being able to find my materials for less online isn't true. I've specifically tailored my pricing to match what they can buy it for online.

Quote:
Originally Posted by Chris J View Post
.....So what's the difference? For that matter, how do franchise companies do it when they make their own materials that are not for sale to the public? I assume that they simply create arbitrary numbers to use on their quotes to fit their objective. So their you go!!! Create your own product numbers for the materials you use so it can't be searched at all!! Hell, post your own MSRP online!!
Well, since the fixtures I use say the name brand on them and have the stock number on them somewhere too that would be a little hard for me to make up my own brand and pricing and then deliver a pathway light that is stamped "Kichler 15810" underneath the cap. Besides, I'm not trying to be sneaky. That's my whole point! I want to be able to make a good markup without the customer feeling like I'm being sneaky or ripping them off. If I buy a $40 bullet from Volt and mark it up to $80, my customer could see the fixture later and say to me, "Hey! What the heck! I found this same fixture online for $40! Why you charging me $80 for it?!?". Maybe you've never had that happen to you - but I have. Several times. But nowadays that never happens. I quote them $144.00 for a bullet spot light, they can go online and find that same bullet spotlight for $144.00 and everyone's happy. Now I may have been able to purchase it for less because we buy a serious crap load from that company each year - so they give me a big discount. But the customer still feels like they're getting the unit at a fair price and I'm still able to make the markup I want. It's a win-win. And now I don't have to worry about not listing my product numbers and trying to hide my brand and fixture from my customer. They can check out my pricing all they want and they'll find they're getting a fair deal.

Makes for good business that way.

You wanna hide your pricing and try to keep it all a secret? Go ahead. One day that may bite you in the A$$ though - like I've had happen to me and like James was saying. But hey, more power to you. If it works for you - go for it. I just don't like doing business that way. I want my customers to always feel like they're getting a fair price on everything we sell them and I want to be able to be up front and honest about what I'm charging for every item.
__________________
Jim Lewis
Lewis Landscape Services - Oregon
"kickin' grass and takin' names"


www.lewislandscape.com - Portland Oregon Landscaping Company

landscape design Portland Oregon
Reply With Quote
  #37  
Old 07-09-2014, 09:39 PM
indylights indylights is offline
LawnSite Member
 
Join Date: Nov 2007
Location: indianapolis, indiana
Posts: 149
This conversation does get tired at times as it has been played out many times, but my only additional comments are two things. No one on here is going to change their business or pricing methods based on what someone they barely know if at all says about their business model, so the majority of it is noise. However, what I will say is that calling someone who doesn't list out per fixture cost dishonest I don't think is fair. I list what brand products I use in all my jobs, whether it's lighting, hardscape, ponds, etc. I just don't put a line item price on them. I present the plan and material list as a package, essentially saying here is what I will install, service, and warranty this job for using these materials. If they can find it for less or take that effort, so be it. I am selling an installed price for the entire job, all inclusive. If a customer asks for material cost, I place my own price on it. I don't follow MSRP. Again, if they find it for less, great. What I am presenting them is a price that I will install it for. If they don't want to pay that installed price, they find somebody else. Not one thing dishonest about that, and I am quite profitable because of it. I don't let internet searches determine what I charge for product, regardless of my cost.
Reply With Quote
  #38  
Old 07-09-2014, 09:41 PM
whiffyspark whiffyspark is offline
LawnSite Fanatic
 
Join Date: Jul 2011
Location: Chesapeake beach
Posts: 5,505
Quote:
Originally Posted by indylights View Post
This conversation does get tired at times as it has been played out many times, but my only additional comments are two things. No one on here is going to change their business or pricing methods based on what someone they barely know if at all says about their business model, so the majority of it is noise. However, what I will say is that calling someone who doesn't list out per fixture cost dishonest I don't think is fair. I list what brand products I use in all my jobs, whether it's lighting, hardscape, ponds, etc. I just don't put a line item price on them. I present the plan and material list as a package, essentially saying here is what I will install, service, and warranty this job for using these materials. If they can find it for less or take that effort, so be it. I am selling an installed price for the entire job, all inclusive. If a customer asks for material cost, I place my own price on it. I don't follow MSRP. Again, if they find it for less, great. What I am presenting them is a price that I will install it for. If they don't want to pay that installed price, they find somebody else. Not one thing dishonest about that, and I am quite profitable because of it. I don't let internet searches determine what I charge for product, regardless of my cost.
Yep

You will never get a job in this area if you have a 3k material line and $6k labor line.

All materials are listed. By labor and materials are rolled together for a lump number.
Posted via Mobile Device
Reply With Quote
  #39  
Old 07-09-2014, 09:53 PM
JimLewis's Avatar
JimLewis JimLewis is offline
LawnSite Fanatic
 
Join Date: Dec 1999
Location: Beaverton, OR
Posts: 6,547
Quote:
Originally Posted by indylights View Post
.... However, what I will say is that calling someone who doesn't list out per fixture cost dishonest I don't think is fair.
Who said that?
__________________
Jim Lewis
Lewis Landscape Services - Oregon
"kickin' grass and takin' names"


www.lewislandscape.com - Portland Oregon Landscaping Company

landscape design Portland Oregon
Reply With Quote
  #40  
Old 07-09-2014, 10:06 PM
indylights indylights is offline
LawnSite Member
 
Join Date: Nov 2007
Location: indianapolis, indiana
Posts: 149
You just said you were being "upfront and honest" with your pricing, insinuating those who did not price it your way were being dishonest. If I misread your intention with that comment, I apologize.
Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump






Powered by vBulletin® Version 3.8.6
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
Copyright ©1998 - 2012, LawnSite.com™ - Moose River Media
All times are GMT -4. The time now is 03:24 PM.

Page generated in 0.13475 seconds with 7 queries