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Both my plumber and electrician now prefer if I supply the fixtures and have them install everything but supply their own pipe/wire etc. This saves them time and hassles and they can bill more hours. The trade off is that I can work into my costs the time it takes and a mark up on the product. Usually, I either spec the jobs through a miriad of catalogs or have them go to the supply houses and choose the fixtures. There’s no way you will ever have to pay as much as the listed price that they see. With cabinets it’s a bit of a different story. Your sales rep should be working with you and not telling the clients you send him/her what the millwork costs are. As a GC, that’s your job. It should still allow you to mark the product up and still give your clients good value for their money. If your discount at the supply houses is 10%, just pocket the difference, if it’s 15%, take ten for yourself and pass on the additional to the client. The trick is, be very up front in this area with the clients, they may be able to appreciate some of the savings, but they will definitely appreciate the honesty.
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Allaround
On high end jobs where I (the GC) supply the fixtures, my Plumbing sub merely increases his price to make up for his profit shortfall. On weird imported fixtures he prefers to take his profit upfront and leave me with the callbacks.
Sort of like my framers income revolves around selling labor only, not lumber. He drives a better truck than I do
Hmmmm.
Of course thats just my opinion, I could be wrong
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I send the customers to several showrooms to shop on their own. Appointments are made, the salesfolk do all the handholding. They present me with their wishlist. This allows me to ensure tha all items have been selected and that the fixtures are on hand when required and subs arrive for installation.
I don't markup, they get wholesale. They sign off, "buying" the fixture and thus are responsible for future repairs.
This goes for all plumbing and electrical fixtures. Electrician supplies switches and outlets as in specs.
I once had a customer who wanted really bizarre windows from a fringe manufacturer. I saw one, they were horrible. He insisted, so I had him "buy" them himself, he "self-paid" for the install and signed off on the whole deal. Sure enough, within 3 months, problems began and never ended until I think two years later when ALL windows (except gable attic) were pulled and replaced at OWNER EXPENSE. Saved by the paperwork.
*Did you get the 2nd job too?When y'all say "cost plus," do you mean cost of materials plus labor/profit? Or materials/labor plus profit?
*Look, I claim ingorance, but that doesn't stop me from posting. As I understand it, cost plus is a way of saying materials are X and labor is y and I will charge Z to make sure it all gets done (includes management fees, profit,overhead, etc.)This sounds very possible on highend jobs, but on smaller centrist jobs I would think you would fight more over your worth.I'm talking about the jobs where the homeowner thinks he knows the cost of everything because Dean said it should be around this much. I'm not trashing cost plus, I just think you are dealing with a more sophisitcated crowd that is more concerned with quality and getting it done than every dollar. As I say this, let me explain I do mostly commercial work and I tend to deal with businesses that see every dollar spent as dollars from their pockets. All this said, I agree with Mongo in that sending people to showrooms and either passing on wholesale prices and or letting them know what things cost you is a good idea. I think the HD's of the world have blown the oppurtunity to charge retail or more for an item. I don't want to alienate a customer because he saw what I sold him for X at HD for Y. Even if you can prove that what you are giving them is better, I feel that they may see "something that looks just like what you supplied" at a fraction of the cost and feel ripped off. I have gone beyond sending people out to find products they like (note: I also send them to better stores when possible). I also steer sub I like their way and let them make their own deal, with imput from me as to whether I'm happy about it or not. I also will work with their sub if they don't go with mine, but that is more difficult.
*I didn't want it, and referred it away, but the wife kept calling and pleading. I caved. They paid dearly, as the old "custom" windows were "custom" sizes and in some cases, uncommon shapes. A fair amount of sawzall action. Replaced with Marvin Woodies, SDL's, they look fabulous. Imagine "cost-plus" as a never-ending apple pie at Thanksgiving Dinner. Doesn't matter how many people are served ahead of you, there's always a slice left for you.Cost-plus is good for some people. I don't work that way. I like a fixed price up front with change orders as required. Keeps people on their toes.
*J.D. Our customers are very concerned with quality. They usually are working with two interior designers, which neither one can make up their mind, and changing plans every other day. They also wanted it yesterday. This all lends itself to cost plus very well. Once in a while we go with a fixed price but then we'll end up with 30 change orders on a $30,000.00 dollar bath because the designer twitched is nose and changed the plans! Having said this I agree with what you and Mongo have stated. JKBPS Allaround, what trim carpenters provide the trim package? Before I even finished reading your post I knew that you were a plumber!
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As a PM for a remodeler in the same ballpark as you, we generally prefer the customer work through supply houses our subs use, then specialty places we carry accounts at and as a final resort let them or the decorator buy the fixtures. Our cabinet maker of choice participates in site meetings and works with the owner and decorator along with us to get the client what they want within our scheduleand budget. We charge a builder's fee on top of the costs of the invoice to cover profit and overhead (10% works for us). The trick is to be clear up front that so much of your plumbing/electric budget is for fixtures and make the client aware if they have exceeded this amount or any mark-up will be lost.
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So what's that supposed to mean? Why bother to mention that at all? Did you feel you had to add that comment in some effort to belittle what I had to say? Remember, while you're putting in kitchen cabinets we're "protecting the health of the nation."
*Everyone has a bias and yours was very easily spotted. I try to get intelligent feed back through this forum......not snipe and gripe !JKB
*As I re-read this thread I think , this is why I went commercial. I also think of estimating and the way, I feel, would least distract, offend, irritate the client. I think that there are many valid ideas here, and while I have nothing to add, this is why on Monday I'm accepting a job and hanging up, at least for several years, my crystal ball that wasn't so accurate to begin with. "What do you bill?" is a great question, and I would love to see more discussion on the subject. It is the heart of our or any business. We need more talk on the subject and why some guys and or jobs are worth more than others. I had clients I would charge more, but they needed more hand holding or were a complete pain in the ass. Then were those that I charged less because they were cheap and top quality was less important than low price. One of my biggest problems with residental work, and why I left it, is that I couldn't see myself paying high prices I deserved. That was mostly because I couldn't divorce myself from the fact that I could do it myself and had or could rent the tools. For me it was why would you pay me a lot of money to do that simple task for you?Anyway, this seems more about estimating than billing, but that IMHO.
*I agree J.D. . It takes practice to charge enough. I don't mean estimating either. A lot of contractors don't even know how to figure there overhead. There is a certain amount of guilt associated with making a living for something that comes easy to anybody. Our tile sub can speed through a masterbath floor fairly quickly and make some good money because of our high end clients. Our drywall sub does flawless work. He usually hangs 5/8ths and it always looks great. He goes over and over it. I've known him for years and he has always bitched about money!! Not about us, just the trade he is in. He has wanted to get out for years. I tell him all the time to charge us more. I told him "Mike we'ar not looking for a deal just perfection" He says that he can't do it because nobody elese will pay it. But he is booked for a year go figure? Are professional atheletes worth what there getting?JKB
*J.D."I couldn't see myself paying high prices I deserved. That was mostly because I couldn't divorce myself from the fact that I could do it myself and had or could rent the tools. For me it was why would you pay me a lot of money to do that simple task for you?"This EXACTLY states my difficulties. I am slowly getting over it. I used to think when a friend said he could not hit a nail with a hammer that it was only because he really didn't want to.Now I understand that sometimes that is right, and sometimes the person really can't hit the nail. But I also understand that it doesn't make any difference. I have a talent and that is why it is easy for me. IT ISN'T EASY FOR EVERYONE!As a result, it has gotten a lot easier for me to charge a lot more that I would ever pay. Oddly, as my income begins to creep up, I already see that I might be more willing to pay for things I can do, but don't like doing.Rich Beckman
*hey J.D. - I think you just said you got that job. Congrats and I hope the change is what you hoped for. - yb
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I'd like to hear what you people do as with regard to plumbing an electric fixtures. We do are projects cost plus. The plumber and the electrician supply the fixtures. Does anybody supply plumbing fixtues and have your plumber supply pipe and labor.We send our clients over to the show room and then the supply house faxes the plumber. Should we cut him out of this? Same Question for Kitchen cabinets. We ussally send the clients to a showroom that we do work with. Very high end . Our clients are usually shopping for cabinets in the $30000.00 range. Our remodels are usually $165.00/sq.ft and up.My partner and I would like to be getting more money on some of these goodies but were not sure what is fair.
JKB
*I only do cost plus also but on new construction.I have accounts at major plumbing, electric... suppliers. I send my clients shopping and order fixtures directly.Plumbers and electricians supply labor and rough materials. Electricians supply Outlets and switches also.Now I have a choice. I can charge retail price for fixtures to the client and pocket my discount (10 to 25%) or I can pass the discount on to my client.Warrantee issues come up here. If I charge retail and a toilet stops flushing because it's deffective then I have to pay the plumber to come - pull the toilet and put in a new one (new one free from supplier under warrantee). Had the plumber included the fixtures then he'd be responsible for labor and replacement.If I (as I usually do) pass the discount onto the clients I have them sign off on a disclosure. No warrantee on labor since they're getting wholesale pricing..... When the toilet malfunctions they pay the plumber to pull the toilet, pay me to deal with the supplier getting a replacement and pay the plumber to reinstall.It's 'risk' shifting really. I build all profit and overhead into a flat fee to do the project. Since new construction runs 10 to 20 % the number doesn't pop the client's cork when they see it spelled out on the line item budget I develop.Remodeling is tougher. 30 to 50% for profit and overhead is a deal breaker and why many remodelers stick to fixed price bidding or manipulate their COST and the PLUS so that some overhead and profit are actually contained in the COST. (burdening labor or taking retail markup on fixtures are examples of this)I don't like playing the shell game. I sell Cost-Plus on honesty, integrity and client benefit so the last thing I want is to get caught with my fingers in the cookie jar.You have a lot of options on how to handle retail markup on fixtures. I hope this helps.Mike
*If you're not making enough money on a job it's a problem of not pricing it right to begin with, not how much profit can you take away from your subs by providing plumbing and electrical fixtures yourself. The next thing you'll want to do is buy the pipe and hope you can find a plumber who will be dumb enough to work for just his labor. Why don't you try to cut out the lumber and cabinet middleman, too, and buy direct from the mill?From my experience, when someone insists on selling on a cost plus basis, it tells me he/she can't put together a bid that will be within the customer's budget while still making an adequate profit. I do remodeling as a GC, but also sub as a plumber. As a plumber, I expect to provide all plumbing labor and materials because that's what my income is based upon. If I don't sell it I don't install it. As a GC, I expect my subs to give me fair pricing while still making a fair income. I don't try to screw them by figuring out how much of their business I can take away from them.
*Both my plumber and electrician now prefer if I supply the fixtures and have them install everything but supply their own pipe/wire etc. This saves them time and hassles and they can bill more hours. The trade off is that I can work into my costs the time it takes and a mark up on the product. Usually, I either spec the jobs through a miriad of catalogs or have them go to the supply houses and choose the fixtures. There's no way you will ever have to pay as much as the listed price that they see. With cabinets it's a bit of a different story. Your sales rep should be working with you and not telling the clients you send him/her what the millwork costs are. As a GC, that's your job. It should still allow you to mark the product up and still give your clients good value for their money. If your discount at the supply houses is 10%, just pocket the difference, if it's 15%, take ten for yourself and pass on the additional to the client. The trick is, be very up front in this area with the clients, they may be able to appreciate some of the savings, but they will definitely appreciate the honesty.