Plumbing Zone - Professional Plumbers Forum banner
1 - 20 of 35 Posts

·
Master Plumber
Joined
·
1,069 Posts
Discussion Starter · #1 ·
Would you rather be the only one doing flat rate or would you rather have at least one competitor doing it too?
 

·
LeMarr Plumbing, Inc.
Joined
·
772 Posts
I am fine being by myself but 2 would make it perfect. The one who can show more value and the mind set of ho "I want to buy from this plumber" wins.

In Christ,

Song Dog
 

·
residential service
Joined
·
1,948 Posts
I don't think it's even about winning. It's about mindset. I want all the consumers in my market to expect flat rate to the extent that they completely reject t&m. How does this happen? As more and more shops make the switch to FR it will become the norm and I would say in my market is the norm. So I don't want just me or just two, I want almost everyone to be FR. Once everyone (and while it is coming to be so) expects FR then I will pursue the other things that seperate me from the pack. Don't get me wrong, I don't want all of the t&m shops to go away just most of them. If there are a few left they give me a spring board with the customer to explain why t&m is not what they want and FR is what they want.
 

·
Banned
Joined
·
913 Posts
Some would call it price fixing - but I wish all would convert to flat rate. Pricing T & M is forcing plumbing companies lower and lower to the point of being unprofitable.
 

·
Banned
Joined
·
3,806 Posts
Some would call it price fixing - but I wish all would convert to flat rate. Pricing T & M is forcing plumbing companies lower and lower to the point of being unprofitable.
Around here there are a lot of companies with large yellow pages ads that use flat rate pricing to gouge the consumer, so most of the union shops have shied away from using it. We discussed this awhile ago over at CT when my neighbor was quoted $800.00 to install a kitchen sink faucet that he was supplying, so I had him and his wife call twenty different shops out of curiosity, and the pricing was all over the place. The lowest price he was quoted was $300.00 from the flat rate contractors, I ended up doing the job on company time for our then normal T&M rate of $150.00 an hour,and billed him for 1 hour and $30.00 for new stops and supplies.

Flat rate pricing that is figured to be fair to both the consumer and the contractor is a smart idea, using flat rate pricing to make a huge profit margin seems to me like a stupid way to business, unless you don't plan to keep it long.
 

·
Banned
Joined
·
913 Posts
KTS - I agree wholeheartedly. We are switching to earn a profit. Not huge, but a profit none the less. Working T & M, we cover our needs. Have a slow week and we have to reach into our pockets to make payroll.

I do believe any pricing structure can be abused. We operate with the highest integrity. We're tired of having our labor rate compared to handyman's rates. Flat rate eliminates that for us.

Too many are switching over and T&M is getting bad press. Plumber moves extra slow to make more money etc.

Another example: Plumber #1 does a pull & reset in 30 minutes, another takes 1 hr. Why should HO be penalized by a slower plumber? If a pull & reset is say $125.00 both homeowners got a fair deal.
 

·
waterheaterzone.com
Joined
·
2,043 Posts
T&M is fine for some shops. I can't imagine doing it myself, I am so used to flatrate contract everything I do.

I have been flat-rate pricing service work for over 4 years now. Once you get used to the whole format, its VERY easy. I get only a couple people/year who say they prefer T&M.
Everyone else goes: "Oooo, you give me a total price upfront, before you do the work?!!! I'm telling my neighbors about you, this is great!":thumbup: :yes: :rockon:
 

·
Banned
Joined
·
913 Posts
You wouldn't go to a restaurant and order off a menu without pricing.

Drinks are never posted, so I ask now. One time paid $12.00 for a glass of wine - I ask now. I want to know the price upfront so I can make the decision how much I am willing to spend.
 

·
LeMarr Plumbing, Inc.
Joined
·
772 Posts
Let me back up on my reply earlier:)
There is 5 plumbers in the area and all have a bad rap: don't answer phones, never reply, say they'll be there and noshows, and so on. In away I feel fortunate. So, when I said "wins" meant nothing. There is really no one who really competes with me. Two complete different levels of services.
Where most of my work is at, plus where our new office is, I haven't had anyone deny work due to flat rate. They are extremely pleased of the up front price, that we answered the phone, and showed up when we said we would. Also, fix repair on site.
I would like more to be FR, but I doubt any will. I get told alot that another company is outragiously HIGH.
I encourage all to FR, its easier, less hassle, and I get way less complaints (if any) for me that is. But kinda like what Smells said, I at least would like one or two to stay T&M, so people would like the flat rate better.

There was a # put on McDEE's if they were to break down the cost for a cheeseburger to an hourly rate. I can't remember it but I was kinda shocked at it.

In Christ,

Song Dog
 

·
Registered
Joined
·
843 Posts
Plumbcrazy said:
Some would call it price fixing -
It's not price fixing. You get to set your price. You should be setting it at what it costs you to do business and all businesses are different.

For example: if you download the free book from upfrontprice.com, you can choose between A through Z with A being the lowest price and Z being the highest. There is no agreement for everyone who buys from the company to choose the same price. In fact, if you get the software, I believe you can plug in the hourly wage amount you target and it will figure that through the book using the wage factor for each task.

In addition, each task can be altered should you find that you feel it's too high or too low.

-----------------------------------------------

As far as my little city is concerned, I'd like to get every other plumber in the area who does service to try it. Doubtless the new Mr. Rooter that moved in is flat rate, but I don't know of any others in the immediate area except me.
 

·
waterheaterzone.com
Joined
·
2,043 Posts
I worked for the local Mr. Rooter before starting my company. They are one of my main competitions in this area. I still work with the owner though, I recommend them for pipe-burstings and they pay me a finder's fee. No way I can afford pipe-bursting equipment at this stage so it works out for both of us.

I usually am anti-franchise and talk about the bad things about them, however....One thing I'll say positive about the franchises is that (depending on the franchise owner) they tend to raise the bar for us small guys when it comes to higher-end service and pricing. I am a little cheaper than them, but compared to most plumber's around I look on the expensive side.
 

·
Registered
Joined
·
468 Posts
Funny that folks seem to have no problem with auto repair shops, most of which have been modified flat rate for decades; but sometimes are resistant to flat rate plumbing. Maybe it is that little twist that auto shops use....around here at least most of them POST THEIR HOURLY RATE right on the wall in the office. Customers possibly think they are paying T&M, when in reality the TIME is right out of the book...unless the job is too big, then they add hours. And of course they add ALL the material. Quite a system they have going there!
 

·
Registered
Joined
·
344 Posts
Take very good care when pricing copper based products such as water line replacements, etc. Those prices are up and down and you don't want to get hurt because you think you can't afford to reprint your price book.

I've been listening to both sides of this coin for about 19 years now, and I have done things both ways. I can honestly say, that if you set up your price book realistically and measure your overhead, labor and material costs properly, you can do just fine without T&M.

As for smaller communities, we worked in them all the time with several local shops and plumbers as competition. We covered all of Arkansas, with only our travel fee changing based on location from Little Rock, our prices remained the same.

The absolute biggest obstacle anyone starting out with FR is not your customers, but yourself and your field personnel that have no experience. You and they will pre-judge the results and expectations of how things should go and its usually for the worse.

Doing this will just broadcast a lack of self confidence to your clients and they will pick up on it. My advice? Get someone to run some calls with you that knows the system and can show you how to use it to your client's advantage. Discounts for add-ons, program discounts for service contracts, loyalty and senior discounts for good clients that have been with your company for years or are on fixed incomes and really deserve a break.

Knowing how and when to use these things is the key to being comfortable with any new FR system. Once you can look your client in the eye and say, "I don't know, let's look it up together" and pop open your book to the right pages, you'll be ready to run calls solo.
 
  • Like
Reactions: Pipedoc

·
Registered
Joined
·
1,880 Posts
I have gone to FR now ,,, it is easier to say , " Ok Mr. H.O. , Installing this faucet is going to be $ X . Fixing the toilet is $ X. and changing the hose bib is $ X."

" Now we'll discount the last 2 items due to Multi Task ,,, Your total will be $$ .

Please sign here and we can get started " . DON'T YOU THINK THAT IS SO MUCH BETTER THEN ---

" We charge $ 150 per hour + $ 75 for the helper ( in the truck) + materials .
Might take two hours ,,, might take 6 ,,, I don't know ! "

The H.O. must feel like they are just waiting around with their pants around their ankles with T & M .

Cal
 

·
Registered
Joined
·
143 Posts
I have gone to FR now ,,, it is easier to say , " Ok Mr. H.O. , Installing this faucet is going to be $ X . Fixing the toilet is $ X. and changing the hose bib is $ X."

" Now we'll discount the last 2 items due to Multi Task ,,, Your total will be $$ .

Please sign here and we can get started " . DON'T YOU THINK THAT IS SO MUCH BETTER THEN ---

" We charge $ 150 per hour + $ 75 for the helper ( in the truck) + materials .
Might take two hours ,,, might take 6 ,,, I don't know ! "

The H.O. must feel like they are just waiting around with their pants around their ankles with T & M .

Cal
If thats how you run T&M then you need to go FR as you'll be homeless in a month, this is a dead horse issue.
 
1 - 20 of 35 Posts
Top