Took a customer a bid this afternoon.

Gave a lump sum price and outlined what the price would/wouldn't buy them.

Now they want a price breakdown, material vs. labor,because they think they can buy the material wholesale.

I already have about 8 hrs. invested so far with going to look at job,pricing materials,etc. This is for less than $8000.00 work.

I'm thinking of just giving them just a labor price for the outlined work and letting them fend for themselves on material.I don't like that type of arrangement,but I could use the work.

Of course,no assurance that I'll get it.

How much more time would you invest in this?

Tell 'em take it or leave it? Is not a MUST HAVE.

Russell

The lure of the big orange box raises it's ugly head, snarls at anyone daring to produce a markup and scoffs at the national suppliers by way of sheer volume.....

so be it..... why fight it?

sometimes i really think we are the
Me-Install/You-Fetch generation of EC's, or at least subjected to exponential proliferation of the concept.

i have done these jobs T&M, the crux is the individual's (read-You-Fetch) ability to comprehend the materials needed.

If in fact YouFetch needs to have repeated visits to the supplier with the same list, trading invalid materials in, then it becomes more T&M for the EC explaining the needs.

The reality with many YouFetches is that the haven't a clue, will require extensive coaching, will hold up thier own job, and will cost themselves more in the end result.

This is a major reason for small business failures. Labor alone will not sustain a business, material sales are as big if not a bigger contributor of profit on a bid job.

This customer won't like it, but I would tell him that your labor rates for a job where material is furnished by others is 10% higher, and it will be a charge per hour, not a quote on the estimated time if you were to furnish material.

This would also add to the senario presented by Steve, in that while my crew waits, they are on the clock and said time is being charged to the customer.

I mean why deliberatly try to go out of business, in the best case, another person besides this one is going to try to help you.

Roger

Outside of specialty items, such as light fixtures, whoever buys the materials installs the materials. If you included $500 to go to the race track what difference is it to the customer? You made it clear what work would be done for what price. If you do the job for labor only make sure you tell them it is for actual labor hours. Include travel time, time shopping for materials they didn't get and stand around and bulls**t with them hours.
Good luck Russell
bob

And what about warantee callbacks. If you has purchased the materials and made a profit on them, well then by the quasi standard of the industry, at least around here, for 1 year, we'll come back and replace a defective part. However, if Mr. Penny Pincher is so tight, you might remind him that those would be T&M service calls. Elecbob is right; bigger chain stores such as WalMart, McDonalds or such supply the interior lighting package or lot lighting package. They lock in not only price, but uniformity, special fixtures if needed, and usually a free from the manufacturer lighting design. If there is a problem with even 1 fixture, any addition time incurrec can be billed as extra. It depends on how good a customer the GC is I guess if you want to nick him for a small item, but larger blocks of time would be expected. I know times are not the best, but too many contractors bite at the carrot dangled in front of them only to find it tainted. Roger is right also. Material problems, the job grinds to a halt, on the customers dime; Hell, if you had supplied the materials they would have been right , and on time.

Hi guys:
I'm not an electrical contractor, but the concept of "you fetch, I install" bothers me for two reasons; 1)The quality of some items sold at the big orange or big blue stores leaves a lot to be desired - which means that Mr. Pennypincher will usually purchase the lowest quality items for the EC to install (sacrificing safety and durability along the way), and 2)Some items may not be suitable for use together in every instance.

This is where the EC's experience kicks in. He (or she) knows from experience what components work well together and which ones don't. If you are going to hire an EC to do the work for you in a professional manner, allow him to do the WHOLE job.

Just my thinkin'...

Mike (mamills)

I had my own construction company for a few years. My view is that you've got to make $X every day to stay in business.

You can make it on high labor rates or make it with lower labor rates and mark ups on materials. Either way, you can't afford to walk away with less in your pocket.

Asside from the PITA factor of depending on the HO to have what you need on site when you need it, letting them buy materials CAN'T effect your take home. If you don't get to mark up materials, your labor rate had better double or you're only working for wages. If you want to work for wages, you're better off doing it for someone else who can provide insurance, a vehicle, health benefits, holiday pay, sick time, and money for warranty service. You can't work for wages and pay for all these "extras" for yourself.

If you let the HO buy materials and give up the markup, you're getting taken advantage of.

To get a good answer on this subject try your auto mechanic and tell him you brought your own parts. Or Try telling the plumber you will supply all the pipe and fittings.
Roger has the answer, your material mark-up is what makes your business survive. The customer that wants to supply the material is a caution flag, that means I may not be able to find my checkbook.

Thanks for the input guys.

All of you have reinforced what I've had in my mind from the beginning. It's either a business or a job.

It's nice to have friends for backup.

I've been trying to think of a time when a situation like this had ever worked out for me, but I can't.

Maybe a simple way to look at is that it takes time to estimate and plan out a job that includes an accurate and complete material list. A markup on materials helps to pay for the time involved in laying out a job.

Quality and suitability of materials aside, sometimes things have to change depending on unexpected circumstances encountered. And having the flexibility to change methods and materials along the way instead of being committed to using what someone else bought can be a big deal.

Bill

Ditto on all said here!! Glad to see all in agreement.

Obsaleet

Whenever I've had a customer want to purchase materials, I will take out my cost, but the markup/proffit stays in the bid. I don't like it because they rarely get the right stuff. I've had several customers try this and just before the job tell me to go ahead and get the stuff for them.

I hear you loud and clear Gasparky,just went through the same process last year,had a customer that wanted us to rough it in but no-finish. I canceled the finish permit which upset him, He couldn't get his lights to work (Three and 4 ways)He had out the ol black and decker book HEHE. So when I went back to fix his crappy work, I also charged severely, increasing this customers pucker factor.....For these very same reasons I am now a maintenance electrician for a printing outfit...

A sincere good luck and when you drive by and see your competitions truck outside just know that during the same time period you were out making money.

I can't tell you the number of times that I've done the same thing that Eagle described. When I was estimating, the big word was "value engineering". Value engineering is a fancy term which means, "cut the guts out of it." I can't tell you the number of projects that I lost because the GC would take the lowest 2 bids, and have us value engineer the project. The project that I was first on was lost because the other EC "cut more guts out" than I did.
'56,
I would worry about more than just the material on this project. I would worry about getting paid even for your labor. Watch out for people like this.

Bid Breakdown?.....Nervous Breakdown,
Doc

Thanks for the input! I've tried this a few times and it never seemed to work out well. I just wanted to see if someone else had a good,workable way to do this.

Just as a footnote,the work is on some new buildings at a lodge/campground/retreat.
I can't find out who really owns the place,only the manager,who is a fast talking,high intimidation type who almost had a stroke when she read the line in my bid that said"all invoices to be due on Friday of week submitted". It's a business not a job.YUP!

Russell

I have learned the hard way that you NEED to know who the owner is. If the manager/agent avoids that question, pay problems are much more likely.

I've done the same thing (well,almost) I had a home builder that wanted to furnish all of the materials so I just did the job per manhour. Frustrating waiting on him to return from the big box store for the third or forth time to get the right material, but hey, I was being paid by the hour.
If I were to do a job with a quoted price on labor and the owner/builder furnishing materials, I would not start it until ALL of the materials required for the job were on the jobsite and would charge him for my time to doublecheck his purchases.

[This message has been edited by txsparky (edited 05-23-2003).]