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  • Flat Rate Pricing

    Currently my company is revising our Flat Rate system. In talking to many contractors about where to be $hourly I am having some concerns with the simple jobs that people get up in arms when prices are presented. i.e. "Replace flapper". When Flat Rate Pricing is based on $150, $175 or $200 how does on over come a price of $200+ to replace a flapper?

  • #2
    Our hourly rate is $90/hr + $40 truck charge, so $130 for a minimum call out involving less than 1/2 an hour. If you need to call a plumber to change a flapper, you deserve to be nailed If the job takes more than 1/2 an hour we gotta hit another 30 mins travel time plus about 10 bucks for the flapper. Add on taxes and hidden fees and 200 bucks comes pretty fast. Especially after 4pm when our rate goes to $190/hr charged from the time I leave my house till I get back. IMO the trick is to make the job sound to the customer to be alot more complex than it is.

    [ 08-07-2004, 11:41 PM: Message edited by: Ghostfitter ]

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    • #3
      With an attitude like the answer from "Ghostfitter"
      he can be sure of two things.
      A:He will only get the that one chance to put a screwing to a customer like he suggests in his answer. You can be sure that no sane person will call him to do a future job.

      B:Contractors like "Ghostfitter" are the reason many plumbing contractors have to deal with the negative attitudes of customers before we even get on the job site. I have been in the business since 1969 and I will never cease to be amazed at some of the horror stories my customers have relayed to me about being taken advantage of by unscrupilous contractors.
      We need to make a fair profit by all means. But gouging is not the type of practice that makes for a solid customer base and repeat customers. I take pride in having many of the same customers that I had as an apprentice working for my first employer back in the early 70's. They trust me, and I know I can depend on them to keep me as busy as I will ever want to be!
      Plumber 122
      Rochester, NY

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      • #4
        Your flate rate should never be based on a number pulled from thin air. The same is true of a by the Hour price.

        You have to know the cost of doing business. You must always start by knowing the cost of doing business.

        If your at 20.00 then charge 20.00. If your at 500.00 you have to charge 500.00.

        Remember an hourly price has always been a flate rate price. Lets get honest the real question is did you give an upfront price!!

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        • #5
          Plumber 122 I completely agree, that is the same with my company. As for charging to change a flaper I just charge a service call of $79 plus parts (=$8 per flaper). I tell them that I resurfaceed the water valve and feel for nicks if so I sell them a stool rebuild (flat rate of $169). If they gripe about the price I tell them how other companys charge $130 for just showing up and try to explain to them that I cant do it for free.

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          • #6
            it amazes me knowing some people will even call a plumber, just to change a simple toiler flapper..!!

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            • #7
              Hey man..Some customers have never even taken the lid off the back of the toilet..I'm not complaining...I am very ashamed as a plumber that people do thend to gouge customers..It effect the whole industry. To fugure out how much to charge..Figure out what it cost you to operate on a daily basis...Call around and see what the competition charges....There is no pride in being the cheapest man in town!

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              • #8
                From a non tradesman's point of view. I am a DIY'r and do most of the work around my house i can do myself. if I overtake something i can not handle (with is not too often) i network, read, hit the internet, etc, get the answer, get it right, and get it done. On occassion though, I have had to call a professional. Lots of people out there in all trades getting too much money per hour than what they should. Yes it costs money to operate, yes materials cost money, yes, labor costs money, overhead, facilities, etc. Licenses,bonds, etc. I for one will not call anyone who will not come out and give me a free estimate. yes it is time. but your time is valuable and my time is valuable. And there are companies out there that want to do more that was needed. We bought a home with a home warranty and the water heater went out. I was out of town when this happened so my wife called the HWA people and they sent out a contractor 100 deductible and the thing was in. not long after i developed a leak near my soil stack. i had a horizintal drain from the sink running into the "t" on the stack. called HWA and found out was not covered (internal leak) so i called roto rooter for a "free estimate" they wanted close to 400 bucks to clean out and repack the joint. i had no idea how to relead a horiziontal pipe. I called the guy who did my water heater for a second opinion and he came out, went back to his truck and grabbed a weird looking chisel and some silicone. he merely tapped the lead back in and put some silicon around it. charged me a 35 dollar service call. he then went on to tell me that if the silicon doesnt stick or i develop any more problems i did not need to call him. he showed me exactly what to do, introduced me to quickrte hydro stop i belive it is called and i have not seen him since. he showed me what i needed to do in order no not have to shell out money everytime i need a simple leak fixed. well i ended up having to drill out that lead, repack with okum, and water stop it. that lasted until the cast iron stack started to seeep. i replaced it all personally with PVC. LONG day, pain in th ***, but saved a bunch of money.

                my point? dont rip people off on the simple ****! if someone calls you to do what ends up being replacing a flapper or a simple toilet adjustment, charge them for that. you get the part wholesale, sell it to them retail and charge them a few bucks to put it on. i dont think there should be such a thing as a "flat rate", i'd never call you if you were going to charge me 79 or 89 bucks just to show up.

                i do not believe that hourly pricing works/flat rate pricing. show up, see what needs to be done, quote a fair price and you will have plenty of business.

                i am currently getting my house sided and new windows. for siding alone i got estimates from 7000-15000.00

                i was going to research it and do it myself in the spring. i figured i'd start in the back and get the hang of it and then once i figured it out would move th the sides and front.

                got a contractor to give us another bid, and he is doing windows and siding, for less than 1000.00. premium windows, premium siding and he is essentially been a one man show so i have been working with him and learning. he admits that most of these siding contractors are getting too much money per square foot. He beieves in a fair price for the money. there were three homes sided on my block by those big guys over the summer. we went for a walk and he pointed out at least a half a dozen mistakes per house. now granted they are things i may have never noticed, but he pointed them out. when he got to those points on my house he showed me how they were different and his was right!

                so he is doing a better quality job at a lower price!

                charge people labor, retail on parts, and a reasonable service call price to cover expenses.

                a common citiczen's two cents nothing more!
                \"A SHIP OF WAR IS THE BEST AMBASSADOR\"<br /><br />OLIVER CROMWELL

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                • #9
                  I guess peoples opinion differs..We do not do free estimates...Well..only on very large jobs...Small stuff..Call us ..we;ll fix it..About the price..Have you ever ran a business and endured things like..Workers comp? Liability insurance...I would fire an employee if I caught him putting silicone in a cast iron fitting.. That is a lawsuit waiting to happen...Peace to ya...Just my two cents.. [img]smile.gif[/img]

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                  • #10
                    PLUMBER 122 IS RIGHT. I AM A ONE MAN SHOP. I WORKED FOR A NEW CONSTRUCTION UNION SHOP FOR 14 YEARS. WHEN YOU BID JOBS YOU HAVE TO BE COMPETITVE TO GET THE JOB. YOU DON'T ALWAYS HAVE TO BE THE LOWEST. ON SERVICE AND REPAIR I SEE PEOPLE GETTING TAKEN ALL THE TIME. I KNOW MOST OF THE COMPANYS REPUTATIONS. I CAN NAME THEM. ALL OF MY WORK IS REFERRAL. I DON'T ADVERTISE. I HAVE WELL OVER 750 CUSTOMERS. THEY KNOW ME, AND I KNOW THEM. I VERY RARELY GIVE ESTIMATES. THEY ALL TRUST ME. OTHER PLUMBERS REFER ME TOO. I'LL DO JOBS THAT ARE TOO TECHNICAL FOR THEM. I WILL NOT STEAL THEIR CUSTOMERS. MY RATES ARE BASED ON HOURLY. MY MATERIAL IS ALSO BASED ON RETAIL. MY PHONE RINGS 7 DAYS A WEEK. I THINK I DO PRETTY GOOD FOR MYSELF. IF YOUR HONEST AND GOOD, AND WORK HARD THERE IS NO REASON WHY YOU CAN'T MAKE A GOOD LIVING. YOU DON'T NEED TO RIP OFF PEOLPE. I COULD NEVER THINK OF SELLING A .50 CENT CAN OF COKE FOR 7.50. THIS IS WHAT FLAT RATE IS ALL ABOUT. MOST OF THE WORK FORCE OF THESE CO. WOULD NEVER MAKE IT AT AN HONEST SHOP. THEY ARE NOT SKILLED IN PLUMBING. THEY ARE GOOD SALESMEN. LET THEM SELL USED CARS!

                    [ 12-31-2004, 04:29 AM: Message edited by: PLUMBER RICK ]

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                    • #11
                      Some people make me laugh. spacebluesonoma is one. He is the kind of customer that will low ball everyone and every thing. I wouldn't put up with him for five minutes. How many people complain about a plumber's rate, but will go to the local Red Lobster and drop a hundred dollar bill for a lousy dinner? A plumber provides a service (such as changing a water heater) that will last for years, and they have to get grief because the price is more than a local handy man would charge. The price must be fair, not cheap. If a plumber can't make a very good living, he should get a new line of work. I bet spacebluesonoma's diy handywork is a sight to behold.

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                      • #12
                        People like him actually keep u s very busy....A DIY-er goes in ..starts a job...gets in over his head..and screws the job up worse than before he started...Thx space...Wink-wink

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                        • #13
                          i totally agree that price must be fair and not cheap.. youre paying for good quality service..

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                          • #14
                            Well this is my first eve. on this site. Saw this thread earlier and another on a different line that prompted me to come back and join this evening. Hello Gentlemen.

                            Having worked in the Plumbing and construction trades for a bit over three decades it has been my obsevation and experience that flat rate pricing is a fabulous deal for a shop full of salesmen. T&M is still the fairest way for honest tradespeople to deal with customers on the service side of HVAC and Plumbing. Most flat rate programs base all pricing as if each job were the only one to be done on a trip. For instance if a plumber is called out to rebuild a toilet and the flat rate is 150 bucks for that job and the customer asks him to change a flapper in another bathroom, that serviceman has to charge as if he made another entire seperate trip for that job. That becomes 300 dollars for about 45 minutes work and 30 bucks worth of parts. Its not fair to the plumber to put him in the position of gouging a customer while looking him in the eye. And its certainly not fair to the consumer.

                            Though I seldom do residential service work anymore I never did have a problem when a good faith estimate ran over by a bit. If there were unforseen circumstances that caused a good faith estimate to be inaccurate by more than a small amount an honest explantion of that circumstance, before the work went any farther, always eliminated at least 98% of any customer complaints. Even the ones who did complain called me back for other work so I know they didnt really think they were being taken.

                            I worked for a shop that went to flat rate pricing about fifteen years ago. It was a rip off of the customer sold as a fair deal. Within a week this plumber said no thanks. I liked to look my customers in the eye when I saw them in a store or at social occasions like sporting events and the like. To this day it was a decision I do not regret. That contractor closed a few years ago and his name is not worth phlegm throughout an entire half of a State. No one in the trade will have anything to do with the guy.

                            If you do good work and treat people fair you will be prosperous and successful.
                            Work hard, Play hard, Sleep easy.

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                            • #15
                              PLUMBER, I FEEL THE SAME WAY. HERE IN LOS ANGELES IT SEEMS THAT EVERYBODY WANTS TO GET RICH WITHOUT WORKING FOR IT. THE TRADE HAS CHANGED ALOT SINCE I WENT INTO IT FULL TIME IN 1981. NOW WHEN I GO TO THE PLUMBING SUPPLY HOUSE THE OTHER "PLUMBERS" SHOULD BE GOING TO A HARDWARE STORE. THEY CERTAINLY DON'T KNOW PLUMBING PARTS. LIKE YOU SAID, THEY ARE SALESMEN, NOT TRADESMEN. I GUESS IT'S A MARKETING GIMMICK. WHO PAYS $7.50 FOR A COKE AT A FAST FOOD RESTRANT. THAT'S WHAT FLAT RATE IS. I'M A TIME AND MATERIAL MAN. I DON'T ADVERTISE AND I HAVE MORE WORK THAN I CAN HANDLE. ALL OF MY CUSTOMERS ARE REFERRALS. WHEN WAS THE LAST TIME YOU LOOKED IN THE YELLOW PAGES FOR A DOCTOR? THE HONEST AND GOOD WILL LAST. THE DISHONEST WILL GO AWAY. WE'RE HERE TO STAY.

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