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Author Topic: Pricing Question - Expendables  (Read 5244 times)

Jordan Wolf

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Pricing Question - Expendables
« on: September 10, 2010, 11:09:28 am »

I know that pricing for installs means that every connector, etc. needs to be taken into consideration, but how do you take into account expendable items and the cost(s) they incur?  I'm talking about zip ties, rack screws, e-tape, heatshrink, etc.  

Do you charge by the package or by the piece?  Or does it depend on what "it" is - higher-priced items are charged by-the-piece and lower-priced items are per-package?

Also, do any of you have tips or advice on making installs a full-time job?  It would be cool to find a company that does them, but I don't know what qualifications I should have.  Being self-employed looks pretty good, too - maybe subcontracting with said companies is another way to go about it?

Thanks in advance for the responses!
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Ivan Beaver

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Re: Pricing Question - Expendables
« Reply #1 on: September 10, 2010, 01:17:18 pm »

We have a "misc" budget that all that stuff comes out of.  The size of it is based on the size of the job and how much "misc" we are likely to need on a particular job.

It can run from around $100 to thousands of dollars.
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Dave Barker

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Re: Pricing Question - Expendables
« Reply #2 on: September 10, 2010, 03:10:53 pm »

We typically use a percentage as misc. cable, connectors and hardware.  Somewhere in the 3% range on equipment cost.  When I state cable I also don't mean the main cable plant for the building, that is in reference to maybe an rca-rca patch cable or maybe we need 50' of some misc cable that wasn't called out in the original spec.
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Charlie Zureki

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Re: Pricing Question - Expendables
« Reply #3 on: September 19, 2010, 08:55:00 pm »

  Hello Jordan,

  I never line price any gear, part or labor....

  I just figure the cost of expendibles into the Quoted price


  My quotes list the gear, but then also includes:  all necessary hardware, fixtures, connectors, and cabling necessary to complete the installation and the optimization of the above system, per the provided system description.

  Hammer

 
 
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Adam Kane

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Re: Pricing Question - Expendables
« Reply #4 on: September 20, 2010, 07:31:26 am »

Charlie Zureki wrote on Sun, 19 September 2010 20:55

  Hello Jordan,

  I never line price any gear, part or labor....

  I just figure the cost of expendibles into the Quoted price


  My quotes list the gear, but then also includes:  all necessary hardware, fixtures, connectors, and cabling necessary to complete the installation and the optimization of the above system, per the provided system description.

  Hammer

 
 


I guess we're in sort of a different world. Just about every church, school, etc. we deal with won't even accept a quote if everything isn't itemized with pricing for each individual piece of gear. It sucks...but that's the way it is and if we want work, that's how we have to do it.
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Ivan Beaver

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Re: Pricing Question - Expendables
« Reply #5 on: September 20, 2010, 07:42:43 am »

Charlie Zureki wrote on Sun, 19 September 2010 20:55

  Hello Jordan,

  I never line price any gear, part or labor....

  I just figure the cost of expendibles into the Quoted price


  My quotes list the gear, but then also includes:  all necessary hardware, fixtures, connectors, and cabling necessary to complete the installation and the optimization of the above system, per the provided system description.

  Hammer

 
 

We pretty much do it the same way (no line pricing)-except we list a total for the gear-and the installation/engineering etc is a seperate line item.

Every now and then we have to (but that is like 1% or so) do line pricing-but that is usually pretty much after we have the job anyway.  For the accountants and so forth-not to value the job.
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Danley Sound Labs

Charlie Zureki

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Re: Pricing Question - Expendables
« Reply #6 on: September 20, 2010, 09:38:56 am »

Adam Kane wrote on Mon, 20 September 2010 06:31

Charlie Zureki wrote on Sun, 19 September 2010 20:55

  Hello Jordan,

  I never line price any gear, part or labor....

  I just figure the cost of expendibles into the Quoted price


  My quotes list the gear, but then also includes:  all necessary hardware, fixtures, connectors, and cabling necessary to complete the installation and the optimization of the above system, per the provided system description.

  Hammer

 
 


I guess we're in sort of a different world. Just about every church, school, etc. we deal with won't even accept a quote if everything isn't itemized with pricing for each individual piece of gear. It sucks...but that's the way it is and if we want work, that's how we have to do it.



  Hello Adam,

  we do, on occasion, bid Time & Materials, but, we still don't line item any materials price.

  The only jobs we DO bid line item (very rarely) is City/State/County/Federal bids, because that's their standard procedure.  

   I won't spend the man-hours listing some freaking nuts & bolts, zip ties, electrical tape, labels, connectors, etc....or spend the time pricing out equipment for some a-hole to price shop.

   If a customer tries to "go around" our providing the equipment we included in our bid ..... we do not offer any price reduction and usually refuse the equipment or the job.

   On another note: We will sometimes include a customer's existing equipment to be incorporated into a project. But, it HAS to be something with a future (possibly a Console, Speaker Cabinets, Amplifiers) is a relatively new purchase, and would be expensive to replace.


   I ALWAYS charge for a Design and they NEVER get any copies of flow charts, system specs, etc... until their design check has cleared.

  And, I don't think we're in a different World, It may be that I view the business World a bit differently that you. Business is business, and I only promise what they're willing to pay for. I keep my promises, and I expect them to keep theirs.

 Hammer

    Don't let the customer manipulate you on how you run your business. And...don't be a DINO.

   
   

 
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Brad Weber

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Re: Pricing Question - Expendables
« Reply #7 on: September 20, 2010, 10:16:59 am »

Adam Kane wrote on Mon, 20 September 2010 07:31

I guess we're in sort of a different world. Just about every church, school, etc. we deal with won't even accept a quote if everything isn't itemized with pricing for each individual piece of gear. It sucks...but that's the way it is and if we want work, that's how we have to do it.

Do you provide only the line item pricing?  From both the Contractor side and the Owner side, line item quotes may seem like a good idea but at least in my experience they rarely actually turn out that way.

One of the biggest issues is that although they do not always recognize it up front, most Owners are more concerned with the functionality and capability of the system than with the specific pieces of equipment that make up the system.  A line item quote may address the hardware but doesn't usually address functionality, thus often leading to disagreements over the results.  What happens if the system uses the components listed but doesn't do what was wanted or expected?  How do Owners define what they expect from the system and how does the Contractor define what they actually are providing other then the equipment itself?  I know many Contractors for whom not having a defined acceptable functional and/or performance result has lead to numerous problems and expenses.  I also have seen Owners end up with a pile of boxes or a system that is virtually useless for them because the quote accepted did not define the end result in terms of functionality or performance.

A secondary issue is that line item bids can lead to additional costs.  So the sale includes X feet of installed cable and Y connectors, but what happens if you end up needing a couple more feet of cable and/or a few more connectors, is the Owner going to be stuck having to pay whatever is demanded at that point?  And what if you use less cable or connectors, do you reduce the Contract cost, turn the excess over to the Owner or what?  What incentives and controls are there for the installers to use an appropriate length of cable and to not either cut corners to save on cable or use excessive amounts?  Now extend that to labor costs and other aspects and specific quantity line item hardware costs can lead to potential risks for the Owner.  If line item pricing is required I find that either incorporating it in the main component costs or a lump sum hardware line item is often a better approach, in effect stating that all hardware to install the equipment listed and derive the functionality defined will be provided within what is quoted.
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Ivan Beaver

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Re: Pricing Question - Expendables
« Reply #8 on: September 20, 2010, 07:50:09 pm »

What many customers fail to realize is that what they are really purchasing is a SOLUTION-and gear just happens to be part of that solution.

They may be able to get a lower price on the gear-but how is it all going to hookup and actually WORK-without hums-distortion-droppouts and so forth.

A pile of gear is one thing-and a pile of gear that produces a good sound is quite a different story.

But sadly for the customer-they "assume" that every installer/designer is the same and the same result will come out of the same pile of gear.
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Charlie Zureki

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Re: Pricing Question - Expendables
« Reply #9 on: September 20, 2010, 09:49:28 pm »

Ivan Beaver wrote on Mon, 20 September 2010 18:50

What many customers fail to realize is that what they are really purchasing is a SOLUTION-and gear just happens to be part of that solution.

They may be able to get a lower price on the gear-but how is it all going to hookup and actually WORK-without hums-distortion-droppouts and so forth.

A pile of gear is one thing-and a pile of gear that produces a good sound is quite a different story.

But sadly for the customer-they "assume" that every installer/designer is the same and the same result will come out of the same pile of gear.



 +1  Smile

 Hammer
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Al Clayton

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Re: Pricing Question - Expendables
« Reply #10 on: September 27, 2010, 03:42:00 pm »

Ivan Beaver wrote on Mon, 20 September 2010 19:50

What many customers fail to realize is that what they are really purchasing is a SOLUTION-and gear just happens to be part of that solution.

They may be able to get a lower price on the gear-but how is it all going to hookup and actually WORK-without hums-distortion-droppouts and so forth.

A pile of gear is one thing-and a pile of gear that produces a good sound is quite a different story.

But sadly for the customer-they "assume" that every installer/designer is the same and the same result will come out of the same pile of gear.



Well Said! When someone asks for line item pricing, I like to use the analogy of buying a car. You wouldn't go into a car dealer and ask to see a list of every component in the car, with the price for each component, would you? You are buying a car, not a pile of components. OK you might ask "How much for the bigger engine or nicer seats?" But not "How much does the Fuel Injection system cost?"
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Jordan Wolf

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Re: Pricing Question - Expendables
« Reply #11 on: September 28, 2010, 12:04:55 am »

Al Clayton wrote on Mon, 27 September 2010 15:42

...When someone asks for line item pricing, I like to use the analogy of buying a car. You wouldn't go into a car dealer and ask to see a list of every component in the car, with the price for each component, would you? You are buying a car, not a pile of components. OK you might ask "How much for the bigger engine or nicer seats?" But not "How much does the Fuel Injection system cost?"

That's a good way to think about it, and it helped me understand the reasoning behind not itemizing every little thing.  Thanks!

I guess I'll just have to figure out a certain percentage of equipment cost for expendables.
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Adam Kane

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Re: Pricing Question - Expendables
« Reply #12 on: September 28, 2010, 01:01:48 pm »

Jordan Wolf wrote on Tue, 28 September 2010 00:04

Al Clayton wrote on Mon, 27 September 2010 15:42

...When someone asks for line item pricing, I like to use the analogy of buying a car. You wouldn't go into a car dealer and ask to see a list of every component in the car, with the price for each component, would you? You are buying a car, not a pile of components. OK you might ask "How much for the bigger engine or nicer seats?" But not "How much does the Fuel Injection system cost?"

That's a good way to think about it, and it helped me understand the reasoning behind not itemizing every little thing.  Thanks!

I guess I'll just have to figure out a certain percentage of equipment cost for expendables.


While I agree with everything that's been stated here...that has not been my experience in my town. In general this town has very little money and everyone wants to know exactly where every dime is going. There is also very little desire to have something sound good...as long as it turns on and makes noise, everything is fine. Like I said...we are told up front that if everything isn't itemized, we will not be considered for the job. We have lost jobs to other contractors not doing that. It sucks, but we have to do what we have to do to get work.

Keep in mind that around here, QSC rmx amps, Audio Technica Freeway Series wireless, and Soundcraft MPM mixers are considered "high end and really expensive." Even Behringer is considered out of the question many times. It's been like pulling teeth to try to introduce quality gear to area churches, schools, and other venues. Over the past 7 years things have slowly gotten better, but it's still an uphill struggle.
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Bob Josjor

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Re: Pricing Question - Expendables
« Reply #13 on: September 30, 2010, 07:38:30 am »

I itemize major components (mixers, amps, snakes, etc.) but not the little stuff.  It goes into a category called "Installation hardware."  I don't use a percentage of the equipment, but have gotten really good over the years at estimating about how much I'll have in patch cables, wire ties, etc.  Then I add another $100.00 to be safe.

Itemized vs. non-itemized?  Just depends on your practices.  My pricing on equipment is MAP so I don't worry too much about the customer price shopping me on the internet.  My nearest and largest competitor doesn't itemize and I've been told by many a customer that they don't like the lump sum approach.

I can see pro's and cons to both methods.

As for selling the cheap stuff?  Not going to happen with me.  Any time I have sold cheap gear I've lived to regret it.  And when it doesn't perform up to standards the customer never says "I guess I should have spent more on the gear."  What they do say is "That guy sold me a piece of crap.  I'm never going there again."
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