Low Pricing

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Posted by: from Milton
3/24/2012 at 11:26:05 AM

What is going on lately with this pricing my fellow contractors are providing customers with? Its time contractors started realizing we are all connected and what you do has an impact on everyone else. Getting really frustrated of giving customers a fair estimate on a job and finding out they received estimates for in some cases half of my price.

I've been a contractor for 10 years so i know what i charge is fair Id love for there to be somewhere on this site where contractors could get together and post a base pricing list for services we provide (legitimate business only)

Maybe people don't know what to charge customers so they go too low or sometimes to high. If we all charged close to the same fair price people would get jobs based on there quality of work and presentation of themselves rather then being the cheapest.

And for all you contractors going around and under-cutting the industry have some pride in your self and your work when your old and your bodies all broken from all your hard work those customers you provided slave labour for arent going to be there to help you.

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Robert from Electrilight Ltd. in Oakville
Date/Time3/24/2012 at 12:16:34 PM

Honestly, it is up to us to sell our companies and bring forth what the under-the-table companies cannot, legal docs, insurances and professionalism with competant workers. Clients get what they pay for in the end. When I get people who call me to tell me they have 3 quotes for $45 and ask me if I can do it for $42, I ask them politely what they will be getting for $45. licensing? insurance against accident and fire? professionalism? warranty? portfolio with years of experience? long list of referals? registration with well known registries (BBB). A phone number that works after 6 months... etc.

In the end, it is the client to choose what to do. I stand to believe that when clients feel confortable knowing WHO is doing the work in THEIR home, they are much happier. I will not loose money on jobs just to get them and then find myself changing my company name in 12 months.

One good question I have been asked, "did you ever own an electrical company before", when I say no, they are happy to know that I haven't tried to hide my mistakes. I think stricter rules on permits should be in place.

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Robert from Electrilight Ltd. in Oakville
Date/Time3/24/2012 at 12:19:51 PM

BTW, if we post our pricing, the others will simply ensure they bid $10 under to get the job...

I even had people tell me my price was higher, but after speaking with clients and making them feel that their opinions matter and offering advice, they were happy to hire me and pay a bit more for the peace of mind. plus that ESA permit and license number prove qualifications!

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Date/Time3/24/2012 at 11:44:17 PM

I think what Phil is talking about is the really low ball quotes customers have been getting lately. I've seen bids for basement framing that was lower than my material costs. So unless the guy is stealing his material, how is he making a profit.

Yes he will be out of buisness, or change his company name soon. But there will always be a guy to replace him when he's gone. People wonder why they get ripped off.

The only guarantee in this buisness is, if you go with the low ball bid, you get the lowest quality. The only thing we can do is go about buisness as usual and educate our customers as best we can.

My ideal customer is educated, meaning they know what goes into a good job and ask the right questions. The more they know, the easier my job is and the happier everyone is in the end.

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Date/Time3/26/2012 at 10:28:17 AM

Hi Fellow contractors, theres a few different problems going on:

theres LOTS of folks that have lost there jobs, and are simply cash grabing any jobs they can to pay there bills, they may have some experience in the past where they have done some reno's but there no where near professionals, nor do they want to be,

There not thinking for the future only for the present, and you can see on proof of it on ASK THE PROS column.

I also believe "YOU CAN DO IT WE CAN HELP" has really undermined this business, every consumer that makes less than 6 figures a year income, wants to be a weekend reno warrior, what kind of image does that leave for the professional contractor? we are sterotyped as: too expensive, not caring enough, etc...

Our firm basically work on a 20-30% gross profit margin, from that we need to pay for everthing our subtrades do not provide, which doesnt leave very much as profit

Our closure rate on jobs is small, 5-10% in the past, we have priced jobs at a 0% profit, then when the client upgraded 1 item, we increased the price acordingly, and we lost the job,

Did i forget to mention, the gov't collects 13% for hst, and hasnt assisted you in handling or training you as a contractor to deal with consumers.

If the gov't collects 13% and doesnt do anything on the particular project, THEN the contractor who ACTUALLY priced the job, sold the job, taken a chance with a stranger to not get financially burned, completed the job and managed to collect the last payment,

SHOULD get 3 to 4 times what the gov't is getting dont you think?

I think we should have a union governing agency, you as a contractor pay your montly dues, have basic coverage, (like our local unions) some sort of a retirement fund, besides 0, all jobs have to be registered, with the union, and they receive a small portion of the project, (single digit profit,) which can also be used as your monthly dues, the union would qualifiy the work that has been completed and would inforce payment from the customer as needed, and would discard unqualified contractors.

Individually we are one drop, Together, we are an ocean

p.s. the only REAL voice we have for contractors is RENOVATION CONTRACTOR,

good luck guys

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Phil from Braga in Milton
Date/Time3/26/2012 at 12:47:21 PM

Hi Joe some very good points I agree with you 100% unfortunatly I don't think any of this will ever happen.

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Date/Time4/3/2012 at 9:14:37 PM

Hi Phil

Thanks, for your input, if you never set a bench mark, you never have anywhere to aim for, and can never measure your sucess, and failure. But at least we are trying to make the world a better place, for the few hard working folks that still remain, hard working!!

I've noticed just in the past few days, the Lousy/cheap/troublesome projects have been getting awarded, so that means that, the inexperienced trades are busy working, unable to prospect the remainding jobs.

Better for us



stay in touch

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Date/Time4/12/2012 at 1:09:28 AM

I am sure that Robert can agree with me, that this is not as much of an issue in renovation for us as it is in new construction.

In particular with commodity prices going all over the map and fuel getting more and more to drive the white van around, prices have to increase. You almost have to check copper prices every week now...crazy.

I for one don't really care what others charge, I know what my costs are and I convert that to an hourly rate. My business plan will not work for anyone else, just like yours will not work for me, there are too many the big thing is salesmanship.

Customer service is the most important to us. We do a lot of communication with clients, pre, during and post project. One thing I have started recently is comparing our rates to the local garage...ask your client why they would go to the garage and pay $95 and hour for shop labour and then think yours is too high when we do house calls...tends to put it in perspective.

I am not convinced that we will ever stop the trunk slammers...and I am not really interested either. I get a number of calls every year from people that call me to fix the mess that they created...likely more work in the end anyway...then I have a happy, returning client.


John Kuehnl-Cadwell

Master Electrician

Datawise Solutions Inc.

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Date/Time5/25/2012 at 2:10:28 PM

HELLO CONTRACTORS, I don't know what is happenning. You go to all the trouble of giving a fair quote to costumers. when slow of work even extend a discount. Price list, hour and how long you will be at the project.

We all ask for a deposit yes. We do not want to be ripped off and we do not want to rip off.

One costumer no names wants me to pay for it all then py me in the end, don't think so what if she rippes me off and don't want to pay. This woman is paranoid. Beware of roof and wall repair in arnprior.

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Date/Time5/25/2012 at 2:21:06 PM

Hope this is the right place to vent. Because I'm not very happy at this monent. I don't work my behind off to rip people off. I am business of making a name for myself, giving good service, and pleasing the costumer.

I don't know where these guys who rip them off come from and make a bad name for us honest contractors.

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