Higher Priced Contractors

rbsremodeling

Started a new thread for feedback.

Why is it in the contracting profession when another guy sells at a higher price than others he is gouging his customers and consider to be a bad guy.

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Winchester

Because people will always be bitter about someone getting more than they are.

They may even start tossing words around like "unfair", etc...

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Ryan

rbsremodeling

but isn't that weird. I would be happy to see another contracting company pushing the envelope and getting the kinda money we work so hard for.

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Meetre

Because most guys in this buisiness started as employees, aren't the best at figuring markup and overhead, and don't realize what it takes to run a business, they just have a job. It's not just other contractors, you hear it from customers and your friends too. Too many people dont understand the real costs involved in some of our work. They see some guys getting paid $15 an hour doing the work and wonder where the rest of it goes. not thinking about insurance, w/c, state license, marketing costs, equipment cost and up-keep, you know the story. Same reason people think doctors and lawyers rip them off, they don't understand buisiness.

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rbsremodeling

I agree that may be the reason early on Meetre, but there are lot of seasoned guys who still feel that making or charging the customer in their opinion too much is wrong, what accounts for that line of thinking?

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genecarp

Thats because we are the high priced guys

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rbsremodeling

Believe it or not there are quite a few other companies here whose prices make mine look like a dollar menu.

I am trying to work a bit more on my companies presentation, opening a show room and delivering better quality work, systems and products to raise my pricing to come in line with theirs.

Is that being greedy?

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threaderman

So the question stands ,you have them lined up waiting to pay $435.00 an hour,or do you have so few calls that you need to charge this amount.

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Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

Jason Whipple

I would guess that a lot of these seasoned guys still work in the field and don't do much more than run a newspaper add and a cheap web site for marketing. I think we all do things differently, the way it works for us. Overhead and profit come from our individual needs and can be all over the map from one to the next.

My prices are adjusted to suit my next step, not my current condition. It's the only way to afford the next step. Some wait for Santa Clause

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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rbsremodeling

I think for us one good thing is that we don't charge an hourly rate for plumbing, HVAC or electrical. We charge a flat fee for the work. So a valve is $220 per not $65 bucks and hour.

But we do put down drop clothes, wear foot booties on our work shoes and wipe down everything with a rag when we are finished

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threaderman

I do that and more,you do not have the market corned on service.I'll be right back,I gottsta throw my bib overalls in the dryer.

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Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

KillerToiletSpider

Higher price is relative, the price someone in the suburbs charges to replace a toilet will probably be half what I would charge to install the same toilet in downtown Chicago, they don't have to figure in time spent finding and paying for parking, waiting on elevators, transporting tools and materials from wherever the parking lot is to the job on foot, there are a lot of things to consider.

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A flush is better than a full house.

rbsremodeling

Now where getting somewhere. But even taking all of that into account. There are still companies around me that command top dollar. Companies of similar size, insurances, pay scales and such, basically similar in overhead costs.

Their pricing is still 30-100% higher than mine. what accounts for the price difference?

and the second part of my question is why do other contractors think that commanding that higher price is some how taking advantage of a customer

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Jason Whipple

Well established, great sales, big balls!

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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Winchester

Because they can.

If I could I would. If you could you would.

When you are able to, you will.

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Ryan

rbsremodeling

I remember going to a sales seminar and the speaker asked If we knew how to close a million dollar renovation job.

everyone had an answer from good estimate, appearance, established firm etc. When we were all done the speakers reply was, you just had to ask for it.

Simple idea but you be surprise how many don't do it

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Jason Whipple

I closed my first one this year. First time opportunity too. It was mostly listening, building trust, and yes, showing them you want it.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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threaderman

I think you feel I am knocking you or your prices,this is not the case.It comes down to one thing,perception of value for the money.It just amazes me that some people see value in a simple job which basically amounts to 435.00 an hour,plus parts,that's all.

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Joe ---International Code Council Member

Your plumbing & gas specialist proudly serving Oklahoma City OK, Moore, Warr-acres, Norman, Midwest City, Edmond, Bethany, Forest Park

rbsremodeling

I do this as well. I figure out new purchases, new overhead cost, etc and adjust my pricing 3 - 4 months in advance so that when those cost are implemented/occur the funding for them are already in place

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Jason Whipple

I think this is why so many find it hard to get to the next step. Once you figure that out it gets a little easier each time.

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Jason E Whipple, General Manager
Historic House Restoration, Cincinnati, Ohio
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