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My company is currently being courted by Home Depot to do installations.
What experience do you folks have in regards to the big box working in the contracting field. We are wondering about how they carry their mark-up and their sales force? Is this the enivitable “Borg” taking over the market and do we resist or is resistance futile.
Thanks
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Two things I've foung out from talking to both customers and contractors here in Naples, FL.
1. Don't expect to make much more than about $35 per hour.
2. Don't expect too much organization (they are not), thereby complicating many of the jobs you take on - and no extra $$$ in your pocket for the time it takes to correct the errors.
Our Remodelers Council is in the process of investigating their GC licensing arrrangement(s), who's liable for what, who does the designing, who pulls the permits and for what jobs and what trades, and finally, who is where the buck stops, both morally and legally.
Also, no extra money for example if the job is on the 17th floor in a high rise. They treat is as though all you do is back up to an overhead garage door and in 15 minutes material, tools, and equipment is at the room/site/area. Oh, and no $$$ for the time it takes you to get rid of the subsequent debris.
But, some guys like it. The guys who don't like to sell or take the time to sell. They call themselves "contractors" and "businessmen." I call them self-employed tradesmen.
Finally, since you're not going to recapture any overhead expenses on the material or make any profit on the the material, you'd be smart to add at least 50% to your normal labor rate.
*Are the salesmen experienced or the old fashioned "Tin Men"? Are they able to maintain any level of quality or responsibility? They are just starting to get into installed sales in our region. I am a roofing contractor and have seen how SEARS can sell based on their brand, with improper specifications and a high price. How much market share can they get ?
*Many of their sales people are not technically inclined. Personally, and apparently others, think that most of those who buy from Home Depot do so for one of two reasons, or both:1. Price2. National company to stand behind warranteeAssuming my above statement is correct, that brings us back to marketing, salesmenship and everything else needed to prosper on your own. Done correctly you should be able to better if they exist in your area. About roofing, and it's been at least 20 years, but back "then" in a small town in Michigan, I had a roofing division and I sold all of the jobs. I sold them routinely at prices varying from 15% to 25% over my competitors prices. I used a combination of salesmanship, PR, marketing, photos and documents right from FHA and the roofing manufacture's literature and bundle paper covering. Like I said, it's been 20 years but I think the same "approach" is still appropriate today since I use it in my current business which does not including roofing.As to your question about quality, or consistency of quality, let me ask you a question. If you "consistently" received less in monies what you kow yo needed to provide the workmanship you desired what would your options be. Answer: Shortly go broke, or "consistently" take short cuts.I think you'll agree, neither is agreeable. Botom line. All you'll end up with each week, week after week, is a pay check - period. Almost as though you are really nothing more than just another employee of Home Depot.Anyway, that's MHO
*Don't do it. They belive they can train any one to do the designs, the customer is always right & it is seldom acknowledged when a Depot emplyoee screws up. They expect you to fix it for no extra charge. Unless you are trying to get established & are willing to take some lumps stay away.
*Rob hit the nail on square on the head. I recently have just severed my relationship with a big box. Everything he stated, my company experienced. Starting with this company was a larger mistake than I originally anticipated. Basically if you decide to accept this venture, you are "sleeping with the enemy". They want everything for nothing, they want new construction prices for remodel work, when something goes wrong, such as a poor conceived design, who suffers? YOU!(and the customer).To sum it up, I saw easy money. I thought without doing all the leg work and only having to put the puzzle together, how could I go wrong. I was dead wrong.We have only been in business officially 2 years and I am proud(and sad) to say the big box partnership is the only customer we did not satisfy.Think long and hard on this one!MCBCB INC.
*About thirty years ago, I did sub jobs under another national retailer of home improvements. There was almost nothing about the arrangement that was good for me. Anything that went wronmg was my fault. Even if their estimator mismeasured, I would not get paid for the # of squares applied - just what he wrote down. They even used my license # to show a customer for a different sub and said, oops, the office help must've made a mistake and gotten them mixed up. They wanted to control my schedule like as tho I was an employee - I could go on for pages.They could keep me more than busy enough though. For a startup in business with a short list of clients, it's a start but a hard way to go.
*Mike to answer your last question, the answer is no. If you have been reading Walt Stopper to the head in remodeling magazine, he has no clue. Talk to some folks who've had an experience with one of the installed sales programs. Most of them are not very happy. This presents a tremendous oppertunity for an experienced remodeling contractor. At this point the low price for the materials & installation given by the box is lost in the memory of poor design & execution. The customer now WANTS to pay for a job done right.I doubt the boxes will ever be able to controll or even be a serious threat to the market. The way their systems are set up will ensure they keep shooting themselves in the foot. The primary goal of the installed sales departmrnt is to move product. They only look for a modest profit (10%+- gross)from this division. The belief is they can hire contractors to install for a lower rate by offering a steady stream of work. I'm sure you were told the lower rate they offer offsets what you would spend on advertising. The sales people sell out of a book with a canned formula for materials & cost for the job. The party line to prospective contractors is you set the price for what ever falls outside of the drescription. What they don't mention is the sales person may have told the customer this is the price & if any thing else is needed the installer will provide it in this price. The management at the store will bow to the customer & give away your money. It's a given that misorders & mistakes will happen in this business but the incidence is higher here do to inexperienced & untrained help. Try putting a kitchen or bath together that has been designed (?) by one of these pepole. You will not be permitted to charge for the extra trips , time spent calming the customer & fixing the order. It may well be considered your fault because you didn't verify the job was sold correctly. You also may be back charged the additional cost of materials. because you didn't catch it.With conditions like this, how many good contractors are going to hang around? I know a couple who have but most don't. It all adds up to a bad image left in the mind of the consumer. Most don't go back. The statistics takers haven't caught up with the dissatisfaction with the boxes but it will come out.
*VERY well said!Saved me a lot of typing.*wink*The big boxes actually create work for the good remodelers - we get to do it over again - right this time and at our price!
*I feel for anyone who has not done well with them. It is not the same at all as working for yourself. It takes much due diligence to control your end of the deal. It is up to the contractor to make the job work, to make himself happy, to make the big box happy and all. It is somewhat like working with an architect or private Kitchen retailer. It can be done...but will not work for most.Adding a third party to make happy is what trips most. Make all parties happy and you will succeed.near the stream,aj
*When I see the Big Box wants 40% I gag. How can anyone take 40% off the top and expect to get a good job for the subcontractor. It just cannot be done. Then add in the estimators lack of experience. Very bad start to a business relationship. Now if HD only wanted 10 or 15% it might start to look better. But 40% WAY TOO HIGH.
*The best thing about Lowe's doing installation is it gives me a price range for my jobs. Lowe's gets $100 to install a new toilet! So I have no qualms whatsoever charging $75 even though it still seems high to me!Rich Beckman
*Rich,I tell 'em I'll install it for $110, to code, show up on time and they won't have to look at the crack of my ass.Most pay cheerfully.
*I wouldn't care what they charge as long as I get my rate. Whether it's 15% or 95% is between them and the customer.
*The Home Depot guy, who came courting today requires a 15% take on gross sales. They provide the lead and the brand and we provide everything else,sales, production, collection and 10 year installation warranty, on their contract terms. The lead quality appears to be weak and price sensitive. Basically it is great for the Home Depot team, because of minimal risk. 15% pimping fee. Count me out
*Did you tell him why? If you did what was his reaction? Just curious.
*I asked direct questions as to their level of contractor support and he very neatly side stepped and went forward with his presentation. Salesmen eh! My boss is still considering it but count me out
*Print this out & show him. If any of your money is tied to company profitability your income will probobaly drop.
*A friend of mine made a decent living as a door contractor for Sears. I had the opportunity to help him out a few times, we will be talking about a few of those jobs for years to come (roll eyes). He did OK for several years but eventually did get fed up and dropped out.Personally I wouldn't get into a similar situation knowing what Marv had to deal with. However HD may be different. Scott R
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My company is currently being courted by Home Depot to do installations.
What experience do you folks have in regards to the big box working in the contracting field. We are wondering about how they carry their mark-up and their sales force? Is this the enivitable "Borg" taking over the market and do we resist or is resistance futile.
Thanks