overcharge?

Discussion in 'Landscape Architecture and Design' started by Island Lawn, Feb 3, 2001.

  1. Island Lawn

    Island Lawn LawnSite Senior Member
    Posts: 632

    I started last year. I spanked myself bad with low bid after low bid.
    During the "off-season", I found LS and my knowledge and professionalisn have since grown

    I just completed my first planting job of the season.
    I was contacted by a customer I had planted for last year about this time.

    It was a small job. Five 4'(15 gal) Ligustrum lined against a fence.
    I bought the plants from a wholesale nusery @ 40.00
    This was my first purchase there. I asked them what I should charge. They told me 3X the cost.
    I have read the "3X" rule of thumb on a pricing thread somewhere here @ LS.

    $40.00(my cost)X 3 = 120 charge for each plant
    X 5(# of plants)= $600.00
    Pick up & delivery (50 mile rnd trp) + $ 50.00
    $650.00

    I did the job for the pre-agreed quote of $650.
    I bid $850 to make sure I wasn't lowballing again, but he wanted it for $500.00
    I told him since he was a good customer... and I was willing to do what I can.......$650.00

    It took me 2.5 hrs, including prep, clean-up, and collection!
    God, how I love beach sand! EASY diggin!!

    But did I rip this guy off??
    650-250(costs)= 400.00/2.5hrs=
    $160.00/hr!!!

    They paid me on the spot! They went on about how beautiful it was and said they would be calling me for a spring clean up and maybe more!!




    [Edited by Island Lawn on 02-03-2001 at 12:19 PM]
     
  2. SCL

    SCL LawnSite Senior Member
    Posts: 543

    If they're happy, its no ripoff!
    Seriously, what would the Ligustrums have retailed for?
    I Usually figure 2 times the WH is retail. Then add your hourly rate for pickup, prep, delivery, cleanup, consultation time, design time etc... Sounds like you did okay to me.
     
  3. paul

    paul Lawnsite Addict
    Posts: 1,625

    No you didn't rip him off, it's what the market will bear. Never question your profits, did you figure your overhead( insurance,truck wear and tear, labor(think what it would have cost you to hire guys to do the install), taxes, tools, dump fees, shop rental, future expansion) These all add up!

     
  4. thelawnguy

    thelawnguy LawnSite Silver Member
    Posts: 2,412

    I had this discussion with an acquaintance the other day-dont I feel bad charging 40 bucks for a lawn that takes me a half hour to mow? Heck no, the customer isnt going to feel bad for me come mid-February and all I can afford to fill my shopping cart with is those 8 for a buck chinese noodle soups ;)
     
  5. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    you eat those too, huh. 3x is a high markup if u ask me, but dont get me wrong, ive done it when the job really didnt matter, and have got it too. i usually go 2.15 x the wholesale price, and then charge for everything that goes with it(peat, etc.) plus fuel cost for pickup and delivery. but whatever the market will bear does apply. BOB
     
  6. Island Lawn

    Island Lawn LawnSite Senior Member
    Posts: 632

    I just got back from this customer's house. He had called me earlier today concerned about the spacing of the shrubs.
    I got right over there. We looked and the spacing. We measured once. We Measured twice. He decided one needed to be moved a couple of inches to the right. I told him no problem, and had it to his specs w/in 10 minutes.
    I offered him a gift certificate for $25 off a Spring cleaning. He declined. He said that me coming out there was enough for him. He then took me around the rest of the lot and we made a list of things for me to do. He said, "Just bill me".

    I read the above posts before I went to his house. I went feeling more confident that I charged the "going rate" for my area.

    Thanks for the help!!!


    [Edited by Island Lawn on 02-03-2001 at 05:32 PM]
     
  7. kermit

    kermit LawnSite Member
    Posts: 138

    You cannot price a job by charging x times the price of the plant. Say you have a two inch caliper maple tree. My cost is $140. It takes the same amount of time , labour, and material to plant as a two inch caliper willow which costs $70. If i only charge $300 per maple I'll go broke yet if I charge only $140 for a willow I'll go broke quicker! You have to recoup your costs and make a profit. You are just guessing.Better get a proper system in place before you are out of business. Join a local landscaping association where you can get the training you need. Don't go by what other contractors tell you they charge. Even if they are telling you the truth, their costs have little or nothing to do with your costs. This is why asking others what they charge for a job is meaningless. Different parts of the country have different costs, labour is different for everyone etc. If you are this out of touch on pricing what is your horticultural knowledge? A pickup truck and a wheelbarrow don't make you a landscaper.
     
  8. Island Lawn

    Island Lawn LawnSite Senior Member
    Posts: 632

    OOOoooo, BURN

    Thanx kermie

    My accountant tells me I covered my costs.

    You dont know anything about the quality of my work, or what I drive.
    Why the attack?

    The customer seems happy, and ordered more work.










    [Edited by Island Lawn on 02-03-2001 at 09:31 PM]
     
  9. FIREMAN

    FIREMAN LawnSite Senior Member
    from n.j.
    Posts: 318

    Seems as though people are getting cranky here...lol..seriously, watch out for the just bill me types,
    I just(last fall) did about 9k in add ons to a job. Up to this point mister customer was very happy(and paying all bills promptly) before working I presented a proposal, he approved it said just bill me.....I listened...he hasn't paid yet and we'll most likely be going to court to figure it out....thankfully though I lost nothing out of my pocket as all materials were covered by part of the profits from work performed prior to this situation.
     
  10. Stonehenge

    Stonehenge LawnSite Bronze Member
    from Midwest
    Posts: 1,277

    I have to second what Fireman said - Get some oney up front.

    For my contracts I collect 20% from the customer to hold their spot in line. I collect another 50% the day I start. When I'm done the invoice goes out for the final 30% plus any extras that were added on. They have 15 days to pay.

    I started doing this last year, and it provided me with a very relaxed season. Never a cash flow problem.
     

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