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  • To compromise, or stand pat?

    Over the past couple of weeks, my best (by far) client that i do on average 2 kitchens, and 3 bath remodels a month has been bustin my chops on my pricing. I feel that I am giving them a fair deal, with excellent service.

    The last few jobs that i have bid have been bid, reduce scope/price, then a call begging to sharpen the pencil some more. No problem with that.

    Two jobs in particular however, I have gotten phone calls, explaining to me that if I couldn't shave my pricing some more that they were going to have one of their carpenters(that can do plumbing) take care of the plumbing.

    So I told them that i could no way compete with in house plumbing, and if i did I should just go hire on somewhere, they said that they still wanted me to do the plumbing, but felt that my pricing was taking them right out of the job. With the price of gas, copper always on the rise, my pricing has stayed pretty consistent over the course of the last 3 years.

    So, get a call today, asking where revised bid xyz was and answered that i wasn't aware that there was a scope change, and the answer was that there was no scope change but needed to sharpen pencil. so I open the bid up and it is for a slab bath/laundry remodel, laundry converts to stacker, shower where toilet was, toilet where laundry was, and new lav in slightly new location. I look at my bid and it's a little higher than normal and decide that i can reduce it by 15% plus travel charges. give a phone verbal and they still think its too high. want it down an additional 15%

    My choices at this point.
    1. Stand pat and see how well their "in house plumber" does
    2. try and compromise between their # and my reduced number( and put some qualifications in the contract about down time due to pizz poor planning, other things out of my control
    3. Agree to their price and give them a blanket qualification that any hidden conditions will be extra.
    What their price covers is 3d labor and material...Near as i can tell from the sketches is in an ideal world it would be just that, but there is no room for error in scheduling, design changes which this outfit does alot, taking into consideration the bad fitting causing a 1h each way for parts...

    Im thinking to just compromise between my revised number and there "goal' number, but on the other hand, i really don't want this contractor testing the waters in this economy either.

    Any thoughts?
    Greg

  • #2
    Re: To compromise, or stand pat?

    1. Stand pat and see how well their "in house plumber" does
    Don't negotiate. It sounds like, you are giving them the fairest price you can already.
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    • #3
      Re: To compromise, or stand pat?

      Tell them a price and be done with it. There are still a lot of people out there with money and they are not afraid to spend it.
      Distractions are everywhere, don't lose sight of your dream.

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      • #4
        Re: To compromise, or stand pat?

        Our biggest Property Management account came to me about 7-years into our relationship and told me he felt he paid us awful well for the work we were doing. Keep in mind this is a hands on multi-millionaire. I worry about losing his work for a glancing moment then told him I felt we did an awful good job for the price he was paying us. That was 20-years ago and he is still the shops largest property management account.

        When in doubt read my signature line.

        Mark
        "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

        I never lost a cent on the jobs I didn't get!

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        • #5
          Re: To compromise, or stand pat?

          Originally posted by ToUtahNow View Post
          Our biggest Property Management account came to me about 7-years into our relationship and told me he felt he paid us awful well for the work we were doing. Keep in mind this is a hands on multi-millionaire. I worry about losing his work for a glancing moment then told him I felt we did an awful good job for the price he was paying us. That was 20-years ago and he is still the shops largest property management account.

          When in doubt read my signature line.

          Mark
          A wise businessman.
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          • #6
            Re: To compromise, or stand pat?

            Each man's situation is different. Can you stand to lose every bit of this work tomorrow? If so, let them go.

            Alot of GC's or companies will try to beat you down no matter what. "$10,000.00. That's too high. $1,000.00. That's too high." They want you to subtract 15%? Are they subtracting 15% from their contract to the homeowner? Ask them.

            When I've let people like this go on my terms I've been the happiest & most successful.

            You might gain some time on your end to get new business or find ways to save more of what you make with your existing business.

            Oh. And if they want to play hardball on the pricing, turn the carpenter in for doing the plumbing. Right thing to do anyway.

            Either way, do what's best for you and your family. Good Luck.

            J.C.

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            • #7
              Re: To compromise, or stand pat?

              Thanks for the fast replies. The only thing that concerns me is the risk of losing the long term client...Guess the right way to look at it, is they're losing my services.
              greg

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              • #8
                Re: To compromise, or stand pat?

                greg, do you really think the carpenter is going to do a job to your level?

                is it getting inspected?

                #1 stand firm and be ready to bail him out for a premium when the carpenter gets in over his head.

                i should share the photos of the last generals work. where the carpenter was the plumber, electrician, drywaller and tile man.

                can't share them yet as the contractor has 2 choices.

                fix it

                or tell it to the judge and contractors board.

                rick.
                phoebe it is

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                • #9
                  Re: To compromise, or stand pat?

                  Originally posted by JCsPlumbing View Post
                  Each man's situation is different. Can you stand to lose every bit of this work tomorrow? If so, let them go.

                  Alot of GC's or companies will try to beat you down no matter what. "$10,000.00. That's too high. $1,000.00. That's too high." They want you to subtract 15%? Are they subtracting 15% from their contract to the homeowner? Ask them.

                  When I've let people like this go on my terms I've been the happiest & most successful.

                  You might gain some time on your end to get new business or find ways to save more of what you make with your existing business.

                  Oh. And if they want to play hardball on the pricing, turn the carpenter in for doing the plumbing. Right thing to do anyway.

                  Either way, do what's best for you and your family. Good Luck.

                  J.C.
                  OK for GC to do plumbing in house, ask toolaholic about the 3 trade rule. This contractor is about 60% of my business annually, so losing the client would pretty drastically change my business(and hurt financially in the short term), maybe now is the time to get into service and repair?

                  Greg

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                  • #10
                    Re: To compromise, or stand pat?

                    Originally posted by glkearns View Post
                    OK for GC to do plumbing in house, ask toolaholic about the 3 trade rule. This contractor is about 60% of my business annually, so losing the client would pretty drastically change my business(and hurt financially in the short term), maybe now is the time to get into service and repair?

                    Greg
                    I am not nearly as experienced in the construction business as some of you. However, one big reason why I chose service early on, and why I focus 100% on service....the money is better, far less negotiating.

                    (of course it also fits my personality better, plumbing service has a whole different set of problems associated with it)
                    Last edited by Service Guy; 06-18-2008, 11:21 PM.
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                    • #11
                      Re: To compromise, or stand pat?

                      Originally posted by PLUMBER RICK View Post
                      greg, do you really think the carpenter is going to do a job to your level?

                      is it getting inspected?

                      #1 stand firm and be ready to bail him out for a premium when the carpenter gets in over his head.

                      i should share the photos of the last generals work. where the carpenter was the plumber, electrician, drywaller and tile man.

                      can't share them yet as the contractor has 2 choices.

                      fix it

                      or tell it to the judge and contractors board.

                      rick.
                      I laughed about that myself, the answer is clearly no it won't be done to my level, and I probably would be getting the call for the bail out. Not sure if its permitted or not.

                      Thanks again everone for the replies
                      Greg

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                      • #12
                        Re: To compromise, or stand pat?

                        Understand. Gotta say I stick by my earlier post. You've got to crunch the numbers and know what you and your family can tolerate. Sometimes you have to do things that are unfair or you don't want too for the sake of your loved ones.

                        I hope you are able to get what you deserve for your work. From this person and all of your new business.

                        J.C.

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                        • #13
                          Re: To compromise, or stand pat?

                          Thanks JC, definantly tough times out there. Is it the same for you service guys, or is it kind of steady as she goes for you guys?

                          Greg

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                          • #14
                            Re: To compromise, or stand pat?

                            Originally posted by JCsPlumbing View Post
                            Understand. Gotta say I stick by my earlier post. You've got to crunch the numbers and know what you and your family can tolerate. Sometimes you have to do things that are unfair or you don't want too for the sake of your loved ones.

                            I hope you are able to get what you deserve for your work. From this person and all of your new business.

                            J.C.
                            So much love in this forum....its really like a band of brothers. Brings a tear to my eye.
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                            • #15
                              Re: To compromise, or stand pat?

                              Originally posted by glkearns View Post
                              Thanks for the fast replies. The only thing that concerns me is the risk of losing the long term client...Guess the right way to look at it, is they're losing my services.
                              greg
                              One of many businesses I've had over the years was a security guard business. My partner sold a monster account which required 20 guards 24/7. When I reviewed the contract I realized the price he agreed on was $2 per hour below our cost. When I tried to explain it to him his answer had something to do with volume. My point is you need to run the numbers and see if they work for you. Unless you are already charging your GC more than the work is worth you will be giving him the profit off of your job.

                              Mark
                              "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

                              I never lost a cent on the jobs I didn't get!

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