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Old 01-18-2011, 08:01 AM   #1
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I need a price check please


I had my gas furnace servced yesterday. The guy replaced the Hot Service Igniter that he had readily available in his truck. The HSI alone was $239.00. After he left, I found the part on Grainger's web site for $33.75. What is the accepted mark up these days?

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Old 01-18-2011, 08:39 AM   #2
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I'm not really sure. But I would like to know myself. Companies usually double the price for parts. What was the total bill? How long was he there? What part of the country are you in? Was he with a company or freelancing? Alot of questions I know but alot of things to take into consideration.

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Old 01-18-2011, 08:49 AM   #3
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I called JT Dunn Claimate Control LLC from my VAL PAC coupons. I live in St Louis MO. There is a Grainger warehouse 3 miles from me. He stayed one hour. He performed the HCI replacement and cleaned the furnace. The total bill was $259.00 ($239.00 parts, $99.00 labor for clean and check, -$79.00 coupon)
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Old 01-18-2011, 08:51 AM   #4
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I worked at a heating wholesaler, for non contractors we would double the price and add 30% customers would freak out but it was to protect our contractors to mark up their stock
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Old 01-18-2011, 09:39 AM   #5
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Did you consider this included other overhead costs?

Anyone can buy a part, just like anyone can purchase the products to build an airplane. However, can just anyone assemble the parts correctly to ensure the end user is safe? Why is it that so many people disregard the professional training that goes into becoming a top notch trades person. All they see is the price of the part. What about the cost of obtaining a trade certification, the continuing education, the liability insurance, fuel, vehicle maintenance, vehicle payments, insurances, office expenses, advertising, phone systems, banking fees, bad dept, capital depreciation, accounting and legal, workers comp, holiday pay, vacation pay, training pay, pension plans, benefits package, software and hardware costs, equipment costs, storage costs, cost of handling stock, warehousing costs, lights,utility costs, non billable time costs, office staff, answering services, bookkeeper costs, rent or lease costs, taxes, etc? Are we as trades people to absorb all these costs? Who is to absorb these costs? I guess we're supposed to sell the part at the same price as we purchase it for and then charge only for our time at the job, not for the non billable time, and some how try to cover all those other costs plus some how support our companies, our employees, and our families. Is it no wonder why there is a shortage of skilled trades people. When is someone going to start educating the public on the costs associated with running a business?
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Old 01-18-2011, 09:59 AM   #6
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HVACtech126:
Thanks for the lesson but I am still waiting for your answer.
What is an appropriate mark up?
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Old 01-18-2011, 11:05 AM   #7
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I believe he just gave the answer, what you paid, is the answer.
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Old 01-18-2011, 04:23 PM   #8
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it varies by area. there is no way to tell what your service companies overhead cost is........An appropriate mark up is what ever the contractor has in overhead cost that is spread out among all their calls and still brings in a profit.
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Old 01-18-2011, 05:03 PM   #9
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David,
Pro or not, he should be able to itemize the bill. I understand markup on parts. In my neck of the woods, the good pros have a service charge, and then hourly rates. These hourly rates SHOULD include the cost of doing business. If a service tech spends one hr, then you should be charged one hr, plus parts, and in some cases, a service fee (for the trip).

I am being a little sarcastic here, but for example: If you go to a restaurant and order an egg, they charge you an egg, plus the markup on the egg, plus they figure in a bit for the overhead costs. An egg does not cost you the $1.00 for the egg, plus $10.00 for the gas to run the massive grill for a minute, plus the $4.00 for the waiter/waitress to go back and forth, etc...

I guess I would just ask for the itemized bill...
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Old 01-18-2011, 05:04 PM   #10
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Quote:
Originally Posted by hvactech126 View Post
Did you consider this included other overhead costs?

Anyone can buy a part, just like anyone can purchase the products to build an airplane. However, can just anyone assemble the parts correctly to ensure the end user is safe? Why is it that so many people disregard the professional training that goes into becoming a top notch trades person. All they see is the price of the part. What about the cost of obtaining a trade certification, the continuing education, the liability insurance, fuel, vehicle maintenance, vehicle payments, insurances, office expenses, advertising, phone systems, banking fees, bad dept, capital depreciation, accounting and legal, workers comp, holiday pay, vacation pay, training pay, pension plans, benefits package, software and hardware costs, equipment costs, storage costs, cost of handling stock, warehousing costs, lights,utility costs, non billable time costs, office staff, answering services, bookkeeper costs, rent or lease costs, taxes, etc? Are we as trades people to absorb all these costs? Who is to absorb these costs? I guess we're supposed to sell the part at the same price as we purchase it for and then charge only for our time at the job, not for the non billable time, and some how try to cover all those other costs plus some how support our companies, our employees, and our families. Is it no wonder why there is a shortage of skilled trades people. When is someone going to start educating the public on the costs associated with running a business?
Then they should say their rate is $200+/hr.
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Old 01-18-2011, 05:19 PM   #11
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it depends, they may use flat rate pricing. the cost of the repair includes everything it takes to do the repair: part, labor, overhead, warranty, and so on.........
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Old 01-18-2011, 06:34 PM   #12
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Quote:
Originally Posted by David vonw View Post
HVACtech126:
Thanks for the lesson but I am still waiting for your answer.
What is an appropriate mark up?
Depends on the part David. Small stuff has a large mark up to offset the small mark up on big ticket items. At the end of the year a company is happy to see a 5% bottom line.
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Old 01-19-2011, 04:59 AM   #13
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I fail to see what this has to do with DIY.

Moved to off Topic forum.
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Old 01-19-2011, 03:55 PM   #14
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Quote:
Originally Posted by David vonw View Post
The total bill was $259.00 ($239.00 parts, $99.00 labor for clean and check, -$79.00 coupon)
Did the coupon require you to tell them about it upfront? An old neighbor of mine had something similiar happen to him with a plumbing contractor that had a coupon for labor in one of those Discovery books. The guy had a leaking toilet. Plumber comes out and replaced the wax ring. He was charged $19.99 for labor, and $89.99 for parts ( actually said wax ring on invoice).

Neighbor ends up taking the plumber to small claims court as he felt that the requirement that he had to mention the coupon when he called to make the appointment allowed the company to simply add it back in under parts. My neighbor went to 5 different stores and bought the most exensive wax ring at each place. He brought them and the receipts to court with him to show the judge the average retail price was like $5 for a part that he was charged $90 for. The judge agreed that fraud had taken place and chewed out the plumber and made them refund $80 to my neighbor, with a warning that the judge would be having a meeting with the states attorney the next time this plumber was named as a defendant in his courtroom

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