HD As Competition

locofoco

Just an idea. Got it from Jbfan. We're always curious what the other guy is charging for a specific installation etc. Seems like HD is becoming the benchmark that the customer wants to compare us to (Right or wrong- dubious quality). It would be advatageous for a lot of us to know what HD is charging for a new entry door, roof, water heater, etc. etc. Maybe a new category/forum devoted to competition pricing where we could share what we learn from customers/ friends/etc.

TimNJ

All you have to do is call and ask HD for a price for_________. Then you will know. It seems there is a pretty wide swing to their pricing depending on what part of the country you are in though.

Floorwizard

There is no way I am going to care what they are pricing out for. It really has no bearing on what I charge, or what I will charge.
So actually it doesn't matter.
If I compete with them, it will not be by amount of estimate.

I would rather know the prices of my competitors instead.

Perhaps others on this forum might be interested.

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Mike Finley

If it comes up I want to always make sure I'm charging more than HD, certainly never less. I have a whole canned, boring speach about the middleman and dubious quality of the guys they have to hire since they are only getting 1/2 the fee. I've personally ran into so many people with stories of whoa from installations from Lowes, HD, Expo, Great Indoors I have plenty to relate and feel good about charging them more.

It's very rare that I run into a customer that doesn't realize what he is getting for his money from HD.

RobertCDF

Yeah but $475 to drop a door into a hole not even take the old one away or modify the frame at all? I dont do doors very often but I know I could not charge that I would feel bad.

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Peladu

You and me both…

I will stay under Home Depots pricing … no reason letting them get the job just because I want more. But, with Kitchens I think we are neck and neck. Most of the prices I have seen them advertise for installation service’s are inflated. Just because your price is higher than HD’s doesn’t mean anything to the end user at the point of sale. I keep the speeches for how wonderful my children are, not bash other tradesmen or competitors. Most of the time I have already won the job I am bidding on, because they saw my work elsewhere. I show my talent more with my work, than I do with my mouth. So, if the quality of HD’s service remains terrible, then the word will get around. Eventually making it a non issue.

Mike Finley

If HD is charging $475.00 to install a door, a door bell, plug in a toaster for customers, whatever... you know as well as I do that there are customers each and everyday writing checks to HD for $475.00.

If you know you will be doing the job better than HD is, then aren't you simply doing people a favor and a service to do it for them instead of HD. If they are willing to pay HD $475.00 for less quality, why in the world would you do it for less when you are giving them a better product?

The argument goes around in circles anyways because HD isn't the bench mark for prices. What HD charges and what you or I do has absolutely nothing to do with each other. You should be charging based on your overhead, your expenses and your profit projections. HD is the lowest rung on the ladder for customer service and quality installations. Basing your prices in relation to them is like a nice steak house restaurant setting their prices by what Ponderosa charges.

locofoco

Mike- I hope you're right, but I can remember the proprietor of the hardware store and the lady at the clothing store down on the town square making the same argument about Walmart. They weren't afraid, they had loyal customers and would beat Walmart on sevice and quality. Well we all know what happened. Seems like everyone loves the big box stores. They spend a fortune for advertising. Once again, I hope your right.

Peladu

:Thumbs:

locofoco

That probably wasn't a good analogy, there's a lot of differences between HD and Walmart. They can't really beat us on price unless they find subs who will work for peanuts. And we shouldn't try to compete on price.

bob the builder

I see a slight difference in installation prices at H.D. in my area

Interior prehung, 59.
entry door 295
patio door 425
storm door 120
all prices say start at that price include moulding, I don't think any of those prices are cheap....

Bob

Teetorbilt

Just the title of this thread is funny.

I looked into becoming an installer for them many years ago and decided that it was a surefire way to go broke. Look into it sometime and see what the contractor actually makes not to mention the reams of corporate paperwork.

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Mike Finley

Commodities?

If your goods and services are commodities that are identical to everybody else, you are going to have a hard time of it. We've discussed this so many times here about providing unique value added services, selling yourself on everything but price, serving the customers who fit your customer model, etc...

On another note not related to your post -

Hey, if you see HD as your competition, then you gotta do what you gotta do. Competing on price is obviously the path of least resistance to making work for yourself.

If you and the customer both believe you and HD will be delivering the same results, then it can be as simple as "HD and I are going to do the same thing, but I'm 15% cheaper, when do you want me to start?" Let's face it, there is no denying that selling on price works for a good segment of work and a good segment of customers, if you and what you are doing falls into this then keep on keeping on. Unfortunately the dark side of this, and correct me if I'm seeing this wrong, but since you have made HD the benchmark for what you do in the eyes of your customers, haven't you just capped yourself financially and put yourself at the mercy of if you want a raise, you have to wait for HD to raise their installation price. Even worse, what happens the day HD suddenly starts doing what you do for 15% less? Suddenly you're going to be in trouble and you might have to learn how to sell your companies features and benefits instead of your price.

IHI

It's no secret I do alot of millwork installs for the HD in my town. I have been and will be one of the few guys that are dependable and will have the jobs done just like I would bid it out myself and sell-just my nature to do the best I can at all times....but I am also the one personally measureing my jobs that are getting bid and jobsite quotes are the norm, the only time I go into a job "blind" is with storm doors and for the most part those are pretty standard installs, every once in awhile you'll run into somthing funny that you cant install it or door wont fit, but otherwise it's no problem.

FWIW, on a standard entry or patio door installation I could easily pay a sub what I try to sell door installs personally through my business and still make some decsent money. Everything is flat rated from, changing out sill, installing floor molding, changing casing, capping brickmold, and my personal favorite..."custom labor" since quit a few jobs require at least 1 step that goes above and beyond a "standard" step and this is where the money is made. Also consider off of these HD jobs there are typically 4 people getting paid off of it. HD, main middle company to handle paperwork, a subcontractor to handle paper work from that first middle company, and then the installer. When I submit an estimate to do an install the end price if very inflated since everybody adds % to it and most of the time homies go for it since they only have to pay $10/month on their home depot card or deffered payments until next year kinda deal If I could get the kind of money HD does for most of these jobs I'd be in heaven, but it's hard for me to sell labor only to replace an entry door at $475-550 and then tell homeowner they have to have the door, lockset, permit, and landfill fee on top of that...they'd run me out of the house LOL!!

It's a nice way to get paid for people to see my abilities in the feild and since our HD does not offer very many services I'm free to take on the work when I get call backs since it's not competeing with HD...last year was a very good year for sales off former hd installs so the lil bs I had to deal with was offset with the cha ching in my account at the end of the year. I do get frustrated cuz HD seems to forever lack people that have a clue and can transpose info from measure sheet to order sheet, but when lookin at the big picture it makes me money so I'm happy, plus it makes excellent fill in work to keep the wheels turning for an otherwise wasted few hours in a day if we get done early somewhere.

Average entry replacement $450 labor only-includes labor to replace sill and interior casing and cap brickmould

average window replacement $150 labor only-just to remove and replace window only-no rough in, build down, or finish work of any kind

average interior door replacment $125 labor only just to remove casing on both sides and old interior door, then set new pre hung interior door in hole with lockset (pre bored door) reinstalling casing is extra

Storm doors are bad though at only $60/ea and we install 2-300 a year so I'd like to see that upped to at least $75 since the new ones take an honest 1-1.5hrs to install start to finish. this is the one area I can sell through my business at $80 no problem and have gotten as much as $90 with some deer in the head light looks from the customer.

Garage door openers only get $75 and we've gotten it down to less than an hour to change out for standard swap...if any extra work/material is required cost gets bid up with custom labor and have gotten as much as $225 to install.

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A+Carpenter

Damn I charge $250 exterior $150 interior change out.

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Greg Di

Must be nice living in Iowa...

I get $750 easy for an exterior prehung replacing existing int. casing.

$250-300 minimum for a interior prehung with new 2-1/4 colonial casing

6 panel hc colonial slab replacement. $250 for the 1st, $125 each additional with me suppling slabs, hinges, and $3.00 doorknob.

Anderson/EMCO full glass storm door is $500 from me installed.

The customer supplies OR me suppling the doors is extra.

But, remember...the property taxes on my little cape cod on a 75x100 lot are just under $7000 a year. Everything is relative!

IHI

LOL, all realitive is exactly right. Take building garages, if I'm lucky I dont get too much slack selling them at $16.50/sqft with the latest material upcharges..used to be $15 for EVERYTHING for a complete turn key uninsulated garage....and I've seen amny on here by region not doing anything forunder $30-40sqft man I could live very happy at that rate LOL!!!

Our avearage wage in this area is $25-30K a year for good paying jobs...if you can get in anywhere at $10/hr your doing very well. My current 1150sqft house in a very nice neighborhood was picked up from my mother for only $69,000, and average selling price in this neighborhood has been $120-180K for single story ranches with both up and down finished. Property taxes average $900-1200/yr here for your average home. My last house with double lot and 2 outbuidlings I paid $620/yr LOL!!!

Seems we're all in the same boat, just depends on what level the local cost of living is. Here you can buy 3bdrm ranches all day long starting at $30K for a descent house that just needs paint and minor touch ups and has become a property owner/slum lords oasis. gas is $2.06 and diesel 2.39/gallon, milk 2.39/gallon, etc...

I just picked up a national estimator book for kicks, friends have been biddnig theri jobs by the book and are making alot more money than I typically do and having less jobs turned away??? typicalk bathroom gut/remodel last year I would bid at $5-7K depending on materials and lost more than I sold due to being too high priced. Book says typical bathroom at 40sqft should start at $7200 and go up from there...I loosely figured mmy last project and it should have been done on the order of $13,000 and there was no way in helll that project would ever sell for that much ever in this area unless you had a shaddey salesman, customer with no credit and offered $20/monthly payments LOL!!

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DecksEtc

I try to refrain from knocking competitors and I tell people that up front - especially if they already have a quote in. I do point out the facts to them about dealing with HD or franchise company's though. I tell them that the contractors for HD do not get the entire installation price they are paying. HD takes a percentage off the top. Also, in regards to deck franchises in my territory, I tell them that the contractors are paying 5-10% of the total price as their "franchise fees" and that their prices "may" be inflated to reflect that. I don't knock them or their work but I do feel it's important for customers to understand where their money is going. I'm just presenting the facts to them. And, I do my best to sell them on the quality and workmanship that my company provides.

Peladu

If a customer has already obtained a quote from a competitor I usually ask which competitor it is….at that point I cross my fingers and hope it was one that I had to fix their prior mishaps…and if it is, I just tell them the experiences I have had with the contractor and leave it at that. Face it, if a customer feels your honest with them, you have their business ….. if they feel that you are a slimey salesman …. Your down the road. Just some new guys, haven’t learned this yet, but will one day or another.