Contractor Talk - Professional Construction and Remodeling Forum banner
Cancel
Create thread New Forums

Will you separate material cost and labor cost if asked by your customer?

Jump to Latest
21 - 40 of 68 Posts
#21 ·
Everybody does it differently, I am a "fair" person, and we did alot of insurance jobs that require a line by line itemization of both materials and labors...after a little bit I seen when we have ammendments to jobs for unforseen, addon's etc...just how easy it was for me to change things and keep track of things.

So I adopted it into my day to day bidding, and I actually sold jobs because people told me they appreciated the break down since it shows them where the money is going exactly. We were'nt a high pressure sales outfit...I knew my costs and what percentages I needed to profit and there was NO negotiation on labor..if they wanted a lower price, scoped of job got deleted or materials got downgraded to fit within the budget; not labor.

For the guys with the ability to sell $1000 per opening replacement vinyl windows for instance...they do not want anything to do with itemization as it will show their hand, and I get that. For the guys that dont have the ability to high pressure sale and extreme overcharge, there are advantages for both you and the customer doing line by line breakdowns.
 
#22 ·
maleko said:
I like that. But, the part about no additional charge if the job goes beyond the estimate can be taken a few ways no?
What if you find damage that was unseen and needs to be repaired to complete your job. Do you just fix it at no cost? Just thinking how a homeowner may read that.
Click to expand...
I don't do remodeling so that's not as much of an issue. I have a line in my contract that says unforeseen problems are treated as additions.
 
#23 ·
IHI said:
Everybody does it differently, I am a "fair" person, and we did alot of insurance jobs that require a line by line itemization of both materials and labors...after a little bit I seen when we have ammendments to jobs for unforseen, addon's etc...just how easy it was for me to change things and keep track of things.

So I adopted it into my day to day bidding, and I actually sold jobs because people told me they appreciated the break down since it shows them where the money is going exactly. We were'nt a high pressure sales outfit...I knew my costs and what percentages I needed to profit and there was NO negotiation on labor..if they wanted a lower price, scoped of job got deleted or materials got downgraded to fit within the budget; not labor.

For the guys with the ability to sell $1000 per opening replacement vinyl windows for instance...they do not want anything to do with itemization as it will show their hand, and I get that. For the guys that dont have the ability to high pressure sale and extreme overcharge, there are advantages for both you and the customer doing line by line breakdowns.
Click to expand...
I don't think high pressure sales or extreme overcharges have anything to do with it.

In our case we are very low pressure and if you broke pricing down to low,medium and high-we are at the low end of high or the high end of medium-my two most frequent competitors are some what higher than me and the 3 of us are a good bit more expensive tan the rest of the pack---------------------------

it's a business choice and I don't see any advantage to my company in providing breakdowns to people who are historically not going to become paying customers.

I prefer to spend my time meeting and helping people who ARE going to pay for the service,
Stephen
 
#24 ·
I just finished signing a contract where every single item was broken down. My fees, my subs fees, items with no mark up, allowances, etc.

It was a new experience for me. I think I like it, with one caviat. We didn't haggle on price. We only negotiated the scope of work. She even made sure I had line items covered I had missed. She is used to doing this in her former job, which made it much easier.

In the end I basically have a checklist of tasks for my guys to do.
 
#25 ·
We used to line item our estimates and billing. But have gotten away from it. We will break out tasks or budget items, and we also have very detailed estimates, but one total at the bottom. I find, like others here, that the ones that want to know how much every detail will cost, are not going to be fun clients.
 
#26 · (Edited)
Stephen H said:
the short answer is,

"No."

slightly longer answer is, " I am sorry, but is our company policy to not spend time on a break down of that sort"

Additionally I can tell you that in 25 plus years of my running this gig and as far as I know in the last 4 generations of my families envolvement in this business we have never gotten a job after being asked for this breakdown-so when asked I immediately begin dis-engaging and heading for the exit------------

but if you want some giggles---------- just look them in the eye and ask them why they want that sort of breakdown------------ because invariably they will turn 8 shades of red,hem,haw ,stammer,and finally admidt they intend to price shop different operations, nickel and dime you, self perform some of the work and in-general waste your time.

actually they are doing you a favor by asking for that breakdown,because it is a crystal clear signal that you can stop wasting time on them, LOL
Stephen
Click to expand...
Ladies and Gentlemen, we have our winner here.:clap:

I recently took a job after the customers asked for a breakdown which I didn't give them. They burned me for $960.00. I deserved to lose every penny for not listening to myself.

Joe
 
#28 ·
SAW.co said:
I build a lot of decks, and I have always bid by the square foot.

Having to break things down is a huge red flag. It just opens the door for argument.
Click to expand...
Curious...where's the arguement going to stem from? Materials cost what materials cost, simple as that. You/homeowner both know what your states tax rate is...nothing to hide from there either.

Labor rate? that's not a negotiable rate since your overhead/operating costs are exactly what they are. They want cheaper, downgrade the product or remove scopes of said project. As the person if they would go to work for $10 less per hour and still the do the same exact job...when they say hell no, ask them why they expect you to lost money to work for them.

Clients always told me I was the mid-high, to high bid of the ones they got, the reason they went with us was professional presentation, ability to answer all questions, and this is what it's going to take to perform the job line by line...the line by line point was what sold the jobs more often then i ever would've gave it credit for, but homeowners like that.

Think if you took your truck around to get a weird shifting issue fixed. You get estimates for-
"fix shifting issue- $2000" by 3 shops.

then you get a quote for
"check fluid level
remove trans pan
remove valve body
replace stuck ball, seized piston, and burnt solenoid $1250
replace all gaskets and fluids needed to make repairs $180

Labor to repair slow gear engaugement $700"



Got to remember, we're all consumers too, so think about what you want to see when you have to pay for a goods/service...we all like to see where our pennies are going.
 
#29 ·
I really don't break down anything in quotation or invoice purposes when I know I am purchasing all the materials. The price for materials when I'm buying materials is quoted at a box store price plus my 10% overhead. While discussing the job price and getting haggled I may say you're looking at roughly "x" amount of dollars for materials. If a customer wants a breakdown exactly for what materials is going to cost them, I tell them we can go together to the box store and buy the materials at retail cost. I buy majority of my materials at the box store but there are certain materials I don't buy at the box store because I can get better prices plus trade discount for at the manufacture,
 
#30 ·
What do you think McDonald's would say if you asked them to break down the cost of a Big Mac. They would laugh you out the door. The reason they don't is its proprietary information. If I bid a deck by the square foot it's because my costs are not public info.
 
#33 ·
IHI said:
Everybody does it differently, I am a "fair" person, and we did alot of insurance jobs that require a line by line itemization of both materials and labors...after a little bit I seen when we have ammendments to jobs for unforseen, addon's etc...just how easy it was for me to change things and keep track of things.

So I adopted it into my day to day bidding, and I actually sold jobs because people told me they appreciated the break down since it shows them where the money is going exactly. We were'nt a high pressure sales outfit...I knew my costs and what percentages I needed to profit and there was NO negotiation on labor..if they wanted a lower price, scoped of job got deleted or materials got downgraded to fit within the budget; not labor.

For the guys with the ability to sell $1000 per opening replacement vinyl windows for instance...they do not want anything to do with itemization as it will show their hand, and I get that. For the guys that dont have the ability to high pressure sale and extreme overcharge, there are advantages for both you and the customer doing line by line breakdowns.
Click to expand...
I see what you are saying. That is your standard practice and it works for you.:thumbsup:

I break down all task, line by line and all material to be used. but only one number on the column on the right . I suppose I could break it down but in the end it is still the same price.

We had a thread a little while back where we discussed the mindset of people. They would rather here a lump sum price over an hourly rate. Even though the lump price is mostly higher.

Somewhat the same thing?
 
#34 ·
jlsconstruction said:
but if they want a itemized bill then they will pay for every screw and bolt that I use.
Click to expand...
As contractors, we know we always carry forward items from one job to another, so a job prior paid for the handful of screws you are using in the present job. And the present job is paying for the leftover piece of window flashing that will be used on the next job. And that job...

But an interesting thought:
For such itemization of minutiae as the customer desires, where exactly does consumables come in, like sanding paper, saw blades, safety glasses, ear plugs, screwgun bits, buckets, compressor oil, etc. ?
Or are these items something we as contractors are just supposed to eat?


I've done some time/material jobs where the cust wanted to purchase the items themselves--for a variety of reasons. So sometimes they get cheap garbage, and/or not enough, or the exact amount. All this results in my time lost which translates to them into higher labor costs/charges or the reduction in our price as we then have to work fewer hours per (that) day (week). Our fixed costs are the same, fuel is the same going/coming, etc. but if we only work 6 hours instead of 8, we got paid 20% less for that day--yet our fixed costs were the same for that day.

And if the job takes longer, not only are we making less money and even losing money, we are missing out on actually making what money we should be making by doing other jobs for our 'standard rate'. This is the "opportunity cost" we (sometimes) pay by working for people/businesses that short/fight/haggle/cheapskate us.
 
#35 ·
I find if a customer wants to breakdown the entire quote they are looking for the cheapest price...not the customer for me. There are so many little factors in what each of us do that I will not provide it. Little things add up, so a lot of it is guesstimating, for me it's items such as tie-wire, screws, bits, 14" quick cut blades, so many little sundries that add up, it would take me days and probably 3 sheets of paper to break it all out.
 
#36 ·
Some great points made here. This is yet again, another great argument for charging for bids. As Chris and others have pointed out, breaking down a bid in minute detail will require more time. I guarantee that if a customer asks for this breakdown, and your response is " I can absolutely give you the cost breakdown. I will just need a check for $125 for the itemized bid", the conversation will end there.
 
#37 ·
maleko said:
Just trying to find a nice way to say. Sorry i dont break down the cost. Without sounding like im hiding something.
Theres alot involved in a price. Overhead. Time to and from supply yard. Figuring estimate. Insurance. Etc
Click to expand...
"Sorry, lump sum only."

I emailed that to an adjuster yesterday who wanted a breakdown. The job was an hour away, in the sticks, so no close suppliers. The 50 year old mobile home was falling apart so badly, that I was afraid that I could knock it down with my framing hammer.

His bidding software (Exactimate?) couldn't rectify my bid numbers. I should have told him, 'Why don't you have your bid software do the job.' :blink:
 
#38 · (Edited)
CO762 said:
As contractors, we know we always carry forward items from one job to another, so a job prior paid for the handful of screws you are using in the present job. And the present job is paying for the leftover piece of window flashing that will be used on the next job. And that job...

But an interesting thought:
For such itemization of minutiae as the customer desires, where exactly does consumables come in, like sanding paper, saw blades, safety glasses, ear plugs, screwgun bits, buckets, compressor oil, etc. ?
Or are these items something we as contractors are just supposed to eat?


I've done some time/material jobs where the cust wanted to purchase the items themselves--for a variety of reasons. So sometimes they get cheap garbage, and/or not enough, or the exact amount. All this results in my time lost which translates to them into higher labor costs/charges or the reduction in our price as we then have to work fewer hours per (that) day (week). Our fixed costs are the same, fuel is the same going/coming, etc. but if we only work 6 hours instead of 8, we got paid 20% less for that day--yet our fixed costs were the same for that day.

And if the job takes longer, not only are we making less money and even losing money, we are missing out on actually making what money we should be making by doing other jobs for our 'standard rate'. This is the "opportunity cost" we (sometimes) pay by working for people/businesses that short/fight/haggle/cheapskate us.
Click to expand...
Bingo.

I agree with those saying breakouts on request leads to nothing good for you. Trades work is hard enough to do without adding the headache of haggling with a client.

Everybody wants a "deal" but I'm not going to be the guy trying to build his life by giving it to them.

Not.The.One. :laughing:

The simplest answer is "There are so many additional variables besides labor and materials that go into making up a bid, just as the cost of ingredients is a small fraction of what is required for a bakery to bake a cake. I don't offer bids like that, one price for one cake just the way you want it."
 
#39 ·
Don't do it. A detailed quote, showing labor and materials, is a valuable document. It's the rough draft of a project plan, and you should not give it away.

The only real reason a customer asks for these numbers is to shop your quote around to other contractors, often a CraigsList guy (or other lowballer) who doesn't have the knowledge or skills to measure, choose materials, do takeoff, or estimate time. A materials takeoff and estimate of time is solid gold for those guys.

This request doesn't allow you to quote by a standard rate or other rule of thumb, either.

If I've done the numbers, and I have some reason to share some bit of them with a homeowner (some material is super expensive, for example), I never leave the paperwork with the customer even for a moment. In one case a husband asked me to explain a detail in another room; on a hunch I turned around and went back to the kitchen, and found his wife clicking away at my spreadsheet with her smartphone camera. They were a nice academic/professional couple.

When a customer asks, I tell them that it's a significant part of my project plan, that it's valuable, and that I can't give it away.

I used to give detailed breakdowns, but I've stopped. I now waste less time on those leads, and I get awarded more jobs - those people come back when they find out that they can't get a firm price from the CraigsList guy, if they can't give him my detailed quote.


Don't do it.
 
21 - 40 of 68 Posts
About this Discussion
67 Replies
42 Participants
Last post:
avenge
Contractor Talk - Professional Construction and Remodeling Forum
posts
3.6M
members
169K
Since
2003
A forum community dedicated to professional construction and remodeling contractors. Come join the discussion about the industry, trades, safety, projects, finishing, tools, machinery, styles, scales, reviews, accessories, classifieds, and more!
Full Forum Listing
Explore Our Forums
General Discussion Tools & Equipment Business Painting & Finish Work Decks & Fencing