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Pricing Algorithms

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Old 12-22-2017, 01:40 AM   #1
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Pricing Algorithms

So, the age old question... what to charge!

I know pricing talk is prohibited, and I'm not asking for numbers, but what does everyone use for industry standard pricing information. I am familiar with RS Means... have not spent much time researching prices there though. I have an active membership with Xactimate - but that is only insurance pricing and I find it to be fair on some items, and extremely low on others... I know this is going to get the standard LMOP talk - and I agree this is the best method - not arguing the fact.

Some things I am very acute on costs and etc., I know exactly the "walk-away" number and don't feel bad losing to a competitor if it is only a cost issue... the customers I lose aren't the right ones for my business anyways... The question comes when I am bidding jobs that I don't do all the time - it would be nice to at least be in the ballpark with the (reputable) competition. Many times I feel like I am slinging a number at the wall hoping it will stick.

Any of you guys found a resource that might give some assistance?
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Old 12-22-2017, 04:50 AM   #2
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Re: Pricing Algorithms

One item for XactiMate is make sure you use all the applicable line items - for instance floor & wall protection for inside (maybe multiple times for floor?) - a simple reroof is around 10 items as I recall
Another is look at the breakdown & adjust prices as needed - vanity is 600 instead of 400. Another is look at the PITA factor, is it going to be a harder job due to you have to walk stuff down a hill, add labor hours for it


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Old 12-22-2017, 04:37 PM   #3
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Re: Pricing Algorithms

If I were bidding roofing jobs I'd start with Google earth satellite pictures for general conditions and approximate sizes and cross check with the Counties real estate appraisals, plans, and photos on the InterNet.

I suggest you read "Demons and Angels" to inform addons for high maintenance customers, and just not even servicing bottom feeders, let the competition suffer them and the type A sphincters-The more for less tribes.

Cheap to more labor/materials, shed roof, Single pitch ranch style, gambrel, very high pitch, very low pitch, hip roofs, shed dormers, barn dormers etc, shakes, bad sheathing, bad soffits, bad gutters/downspouts, height above ground, landscape obstructions.....Historical zones and or Historical Buildings... just don't go there, unless you are desperate.

Totaling rain protection-sheltering prior to roofing......
Financial issues.

time frame restraints.

Rented, purchased, and or leased special equipment

My worst customer profile would have been an immigrant Chinese Engineer, Now I'd never even bother to keep talking, just exit as politely as possible after giving them my adversary's business card.

Waste costs.

Regulatory burdens, Osha, California style nanny State.....building code changes.

permits taxes, insurances, legal fees now and potential...

Write a spreadsheet/ checklist with % and unit upcharges for all these and other negative factors then list the positive if any, such as entry into a higher class of customers, high traffic corner etc.... for word of mouth advertising, keeping work force busy with out actual losses...

Last edited by Fouthgeneration; 12-22-2017 at 04:43 PM.
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Old 12-23-2017, 02:10 AM   #4
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Re: Pricing Algorithms

I'm a one man show, real picky on the roofs I take. Referral only. My experience with Smith says most HO's that use it simply want the cheapest option, not the best value.

I do less than ten roofs per year, only single story residential, 4-6/12 pitch. Tearoff 1-2 layers or roof over if it's a good option. No new construction, most builders around here are too cheap.

I always use the same supplier with the same materials. I know materials will cost me right about $120 per square, delivered.
I know pretty accurately how long it will take me. Knowing those variables helps a lot.

I'll sometimes look up an address on Google earth and diagram the house before I show up to measure it. Joist generates an estimate while I'm still on the roof, which I show to the HO when I get down.

I price by the square but don't reveal the footage. Makes it harder to shop prices. My default pricing is for tearing off one layer. I add some if I think it will take a bit longer, if the HO may be a PITA, or if I want to add a discount.

I do all types of repairs, so I sell that- replacing or cutting back the siding, fixing fascia boards, etc. I paint my repairs, which most of the hacks around here don't do. I sell my services.

It works for me to cherry pick jobs.

For the stuff I don't regularly do, I price high. If it takes longer than I thought, I don't lose money. Like is sometimes said here, I've never lost money on a job I didn't get.

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