With the box stores selling a lot of electrical brands and products at somewhere around my cost it seems to create problems getting customers to pay a fair amount for a job.
Maybe I don't get the best price at the supply counter but I'm guessing the big chains are are getting better deals then some supply houses. When the customer can see how much a product costs it makes it difficult.
Reading some HVAC business articles it sugests the tin banngers don't buy from manufactures that supply equipment to box stores. The HVAC guys have a e-supplier Buy Max that sells private label products to help compete against "I can buy that here for...".
I'm wondering if there are some good product manufactures that don't sell to the box stores? So we can say we sell only .... because they are the best and are only available from us. Sure it cost a bit more but it's not the same.
What about bolt in panels for most residential jobs? Anyone that walked thru a box store can tell you how much a load center costs. But no customer knows the panel board prices. They can't go to the hardware store to get a breaker and add on to you work later.
Sell them on how much better your panelboards are and company is for using these. Maybe show them the real thing then some worn out load center the box store sells and competiters use.
You could show them list price from the manufacture maybe $2,000 plus breakers and everything elce. Then tell them you can do everything for ....
I say don't quote them a material price, just 1 price for everything. Then they don't know (or care) that you are charging them $15 for a circuit breaker they can get at HD for $9. You might want to work on your suppliers for lower prices. Most of our parts, other than small NM wire, we can mark up 30% and still compete with HD.
Re: Battling the big box stores#155055 12/14/0410:17 PM12/14/0410:17 PM
I had a customer tell me that she can get a 3/4" pvc pipe for $1.00 a stick at a box store. and I said "go for it" I gave her a list of what I needed and off she went. She came back looking like she pulled one off on me!!! I asked her what the total was, She said $57.45. I told her that my price would have been $35.00. She couldn't believe it. I told her they get you in with the price of the pipe, But then you HAVE to bye fittings so they nail it to you there. So I put in her "gold platted fittings" with loving care.
[This message has been edited by BEAMEUP (edited 12-14-2004).]
Re: Battling the big box stores#155056 12/16/0408:50 PM12/16/0408:50 PM
It's not so much what you can purchase material for but whether you can sell it for the same price as the box stores. We all should be marking up the cost of materials but the question is can we sell it for the same price as the box stores and make any money. I think not.
The even bigger question here though is should we even care what the customer thinks. As far as I know we are allowed to make money and one thing I won't tolerate is a customer telling me how to do it.
I've had my belly full of customers whose lives are filled with excesses wanting to keep me from putting food on my table. Screw 'em! If they don't want to pay my prices go someplace else and if they don't want to pay what they have already agreed to I'll go to the ends of the earth to make their life a living hell to collect my money.
When a customer asks how much it would be if they supply the materials I tell them it's the same price as if I were to supply them. I have to account for the time I spend returning the wrong materials they purchased and picking up the correct materials. They never seem to purchase the right materials.
Re: Battling the big box stores#155059 12/17/0404:02 PM12/17/0404:02 PM
I agree with all the posts here. And the purchasing power of the retailers have enabled them to actually get homeowner lines produced by mfr's like leviton, sqr d, and others. The item numbers are different. I had some dimmers from a supply house that were returned by another customer(and not checked by supply house counter guy) that turned out to be this cheaper style, and they failed after 4 weeks. I am not a hardware store. If you want me to go to that store, then you can pay me hourly to do that. They also can hold the warranty. It really does get touchy as far as warranty goes, how do you cover failures? Just walk away- let it be someone elses problem. Do you want more work from this type and their friends(referrals)? I won't allow my liability insurance to cover materials that I did not provide.
Re: Battling the big box stores#155060 12/17/0404:55 PM12/17/0404:55 PM
Like LK, when quoting a job I don't provide a breakout, a change order is another story.
If any of us told our mechanic we would supply the crank shaft and bearings to fix the van because we can get a better price, he/she would tell us to have the parts store guy install them while we're there.
I don't know how a company can grow (or survive) simply being a labor broker, sales are as much a part of a profitable business as the labor.
I agree with A-Line's approach.
Re: Battling the big box stores#155061 12/18/0405:37 PM12/18/0405:37 PM
A plumber on the job I'm working at was bragging why he loves the big box stores.According to him, he will go and buy $300 worth of material and write a company check(he's a sole prop).2 weeks later he will return $50 worth of the stuff(like a unopened faucet box or something similiar).The big box store will give him a CASH refund $50 and he'll "stick it in his pocket".He said he does this TWICE A MONTH (he claims he rotates between 3 stores)and for the year will end up with cancelled checks and receipts for $7000 to show his accountant when he actually spent $5800.Of course this is very wrong and made me wonder this point.Would the big box store object to this type of cheating or would the big box store be happy that he was spending the $5800 there and not at the local plumbing supply house.
Back to the original subject I too just give a quote and don't break it down.If a potential customer wants to supply the materials he can call someone else.Residential job light fixtures being the exception I would prefer that they got their own.