$189.00

vinylguy

whats your guys opinion on $189.00 window companies poping up allover the place ? do they make life hard for you? or do they just come and go? how the heck they make a profit? they must buy windows for $5.00 each? i know they only pay thier installer $25.00 per window that sucks. what kind of person installs a window for those prices? anyone with input on this kind of stuff?

dougchips

We have WW189 in our market but they have a low budget marketing campaign thank god. They sell good windows but for a little more than 189. I was selling the same window as them for over twice their asking price for a while.

The only thing I could hit on was the perception of their installers. Sometimes it worked and sometimes money talked.

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dougchips

I just looked at your post again, hopefully you are referring to the national chain and not the pick up truck guys....they are a different story.

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vinylguy

no i was reffering to the national chain, but what the heck? these guys must be all about volume! sound to me as if the main suppliers make the money not the guys who buy the franchises?

vinylguy

i also know that its not really 189.oo only for there cheapest window and they don't seal it or insulate it. it cost more for low-e and capping and disposal of old plus clean-up. its the classic up-sell when they get to the house i'm sure. and buy the way thier windows are crappy. there is so much better out there. i would hope you wouldn't sell the same brand as them and try to get more!

marc

Here's how it works..............

Average selling price is $290

First they show a window that no one would buy.
Then they show them a window that's only $18 more
Window only: $207
Low-E & Argon: $40
additional work: $36 (exterior capping , custom trim work, etc.)
Disposal fee: $7
Average window price: $290

Most pay about $120 per window
Grids, Low-E & Argon: $20
Average cost of installation: $48
Other materials: $8 (caulking, isulation, coil)
Average Credit card expense: $2
Total cost of goods: $198.00

Average sell price: $290
Average cost per window: $198
Average Margin per window:$92
Average volume insetive: $5
Average Gross Margin: $97.00 per window

That's only 33% gross profit
I know I couldn't survive on it.


Remember that the average franchise or training fee is $5000 per year so they don't make any money for the first 52 window they sell

Need to do a whole lot of window to make this model work.

There are three big companies around..........Window World, Window Depot and Clear Choice Windows

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Marc

dougchips

My understanding is they are the largest volume dealer for the company that sells them windows. That company offers volume discounts so the purchase for much less then the average Joe.



The only thing I don't understand is why go after the pick-up truck guys when you can go after the $400-$600 guys?

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Sider' Brian

They just went under in my area-much to my dismay I loved doing the repairs and they weeded out the cheapskates as well

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john elliott

Your post was well researched and informative. This is the only part I query, the fact that you feel the gross profit is too low, but the GP quoted is a percentage of an unstated amount. Surely the whole point of what these people are doing is to make a small percentage of a LARGE amount, rather than a much larger percentage of a much smaller amount. This is the same model operated by all high volume, low margin operations.

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

C.C.R.

I've seen the ads for the franchises in "Qualified Remodeler" 189.00 per window? I charge about 335.00/per. And I'm still one of the cheapest around here. (Besides the guys that don't even screw them in )
and yes I insulate everything. and seal top and sides inside and out. 30 - 40 mins. per window start to finish Demo included. I pay 125 per window low e, etc. about 16 windows a day (if I realy crank). 10/hr. for the helper just to follow me around and clean up after me. Life is good during Replacement window season.

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marc

I have to think that your wrong on this point. The 2 in my area (Window World and Window Depot) both do about half the volume that I do. They're just mot smart enough to know that they're not making any money. You can last a long time on cash flow before going down. The model is broken IMO.
They make 33% gross profit on 1 window or 5000 windows. It's still 33%
It's not easy to last on that small of a gross profit. I know I need to make 46.5% gross profit in order to hit my goals and 39% gross profit just to break evan and I do twice as much volume and I don't have franchise fees to pay.

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Marc

john elliott

there's nothing wrong with the model itself, the problem for these people is to operate it properly
So, using your figures, they make $97 on one window, or $485,000 on 5000 windows
$485,000 minus $5,000 franchise fee = $480,000.
The point that we are arguing here is that percentage figures, on their own, are meaningless. For instance, I would much rather have 33% of Paul McCartney's income, or even 3%, than 46.5% of yours.

Plenty of businesses operate sucessfully on margins much less than yours. It all depends on the volume.

I expect someone will reply that volume is no good if you are losing money. I am not talking about that situation. I am talking about situations where the businesses concerned have chosen to operate on a small margin of a large volume because selling the same product at a lower price is a good way to get sales. Supermarkets are an excellent example

John

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Ed the Roofer said "John too, in his crass and blunt demeanor.............."

marc

My point is that they are not selling a big volume. They sell half of what I do and make less than half per window.
How does that work?

We sell almost every day against these guys. My window sells for $150 to $300 more and we still sell them. Sure they get their share. 40% of the population buys on price. We focus on the other 60%.

What is the number 1 objection that you here after giving a price?

Answer............That's too much, the price is too high, can you do any better or we have a better price.

Do an experiment.......lower your price by 40%. I guaranty that you WILL here the same objection. That's because it's not really an objection. Just cultural dialog. It's what you were brought up to say. It's the same as telling a store clerk, no thanks I'm just looking when they ask if you need any help.


You also stated..........I would much rather have 33% of Paul McCartney's income, or even 3%, than 46.5% of yours.

Maybe I read this wrong but my income (Salary) isn't 46.5% of my gross profit. I wish it was. I believe there is some overhead items that may need to be paid from that. My salary is closer to 4%. When we were doing less than $1,000,000 it was 10% and I think 10% is a good rule for owners salary unless they are selling also....then I think it should be 20%. IMO that rule changes after $3,000,000. Maybe it's just me but our overhead percentage didn't go down as we grew. I don't understand why people think that. The more business you do the more people you need to do it. More equiment, more trucks, more fuel, more upkeep, more salaries, more computers, more office supplies, a bigger office, etc. The list goes on and on......................How can the percentage go down?

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Marc