[Reuben Hoff III]

Once again in search of some information.

I was curious how many people fabricate retail only or a mix of contractor, dealers and retail. I am trying to figure out the best way to go on pricing.I think I need to go to retail base and then discount down according to customer but strugle if should give contractors better price than Kitchen & Bath dealers. Also we price all our with price of installation and sink in price. I have noticed that this seems to be against industry standrds so I was wondering if I should be doing square foot with adders for rest when doing advertisements?

Thanks In advance

[Andy Graves]

You can do all but it is tricky and you must build a good reputaion of being fair.

As for pricing, try pricing everything at a retail level and then give discounts for each of your wholesale accounts based on what they bring to the table. Some contractors deal with their customer completely and then send you specs to price. All you do is the fabrication and installation.

Then you have those contractors that don’t do anything but send you the contact and it is up to you to get the sale. Those do not deserve the same discount.

The pricing question is pretty common. Unless you have been in the industry a long time, try to stick with industry standard. Tried and true methods are the way to go. If you have a base price for counters that include a basic edge, top mount sink, 4″ set on splash with a matte finish then you can add extras. This will keep the base price low and if the customer want more they understand it will cost more.

Hope this helps.

[Reuben Hoff III]

Andy,

I think I understand tha base price part, but does that include install ans template charge or do you call these extra’s? Install flat sq.ft. price or man hour price?

[Andy Graves]

No, Base price means sales, template, fabrication, installation, and tax. If they want the counter uninstalled like for a vanity bath, we will give a discount off the base price.

[Reuben Hoff III]

Thanks Andy that helps alot. I’m just trying to over come some problems with dealers and costumers telling me I am high and then finding out the others are not qouting install or template in the base price.I figured the sink thing out quickly, but I just can not get past the install part.

[Mory Ludwick]

Reuben,

I know you must come to Omaha every now and then for something. Let me know when you are coming and I will neet you at the office and go through our pricing. I don’t have a problem sharing it with anyone that does not affect my market. But there are several competitors that read on here. We have a large variety. We do some very large home builders. Their volumes are so hight that the margins go down. Some of the reason is that they are so organized and they generate no paperwork. Don’t ask. I am not going to type the explanation. We also do alot of customer builders, alot of remodelers, designers, kitchen and bath, and very large retail outlets. Believe it or not the pricing structure is different for all. For starters, most retailers that are advertsing without your help want to make 21 points. That is gross not net. Be sure to check, as there is a huge difference. The options change as promotions come in. The points may drop. 21 points sound like alot abut its not when you figure in the fact that they carry 24 month financing interest free. Here I go babbling again. Call me or let me know when you are in town. I would love to sit down and talk to you. Don’t let it scare you some only want 10 points. Ther are lots of way to change your margins with sink promotions, manufacturer rebates, and distributor participation. We do it every week.

Mory

[Reuben Hoff III]

Actually I don’t make it to Omaha, but I think I need to plan a trip to visit you and your shop. Or if you like Itlian food we do have a great authentic Itilian resteraunt out here. The chef has an article that shows him with the former New York mayor Guliani ( or however you spell it) stating he was his favorite chef. I will buy if you would like. You could swing over and catch a Omaha and Kearney hockey game also.

[Mory Ludwick]

Reuben,

Man, I just started this diet, but I’ll check the dates on the hockey games or if you have them list them. Sounds like a good time. If my son tries out for a travel team, we will have some games down there. Anyway still check, I’ll do the same. Lets make it happen. By the way, my son, Noah, is only 7. Those games are not quite as professional as the big boys, but still as intense (especially when you are 7).

Mory

[Shane Barker]

Reuben,

We start with our lowest price (wholesale) and mark up from there. The way I see it my wholesale price is the lowest I can go and going up is no problem. We price our fabrication and installation separately because we tax everything but the install. We have a spreadsheet that calculates everything based on square footage so if someone wants it broken down it is no problem. We also have a section on the spreadsheet for the extras and it adds it in automatically.

Shane

[Reuben Hoff III]

Here are the dates for the Hockey games. Storm home games all at 7:05 PM

Sat. Nov. 18TH

Sat.Feb 10TH

Teus. March 20TH

In Omaha April 3RD

Hey that would be cool to see your boy play. He could teach me the rules and my boy Chris, who by the way is 8.

[Reuben Hoff III]

Shane,

I have been doing it this way, butI had a case where they qoute wholesale people were charging more than what I say retail should be and the customer wanted to go through me to save them money. I had set up a policy if I know the customer has been to one of my “wholesale” accounts I will not sell to them. I don’t no wether that is good practice or not but it kinda bothers me and sometimes I have to fight the to high price thing when I know I have been competitive most of the time. So in stating this how do you avoid this or do you not run inti that problem.

[Shane Barker]

Reuben,

You have touched on a problem I do run into from time to time. The way I see it is you give the best discount you can for your wholesale accounts and if they do their part their mark-up will put it at a competitive retail price. When they mark it up more and it is over the areas retail pricing it does become a problem. How do you deal with this? I wish I had the answer.

I try to protect my wholesale customers but at the same time if they get greedy and get caught the customer will go somewhere else anyway. They do at times come to us direct for a price and if I know they have already gotten a price from one of my wholesale accounts I tell them it would be better for them to stick with them, however, if it means I may loose the job altogether it is a real problem.

I try to keep informed with the prices my accounts charge so we can work together to keep the markups at a reasonable amount so we don’t loose the jobs to our competitors. If it is an ongoing problem I would really have to consider if the wholesale account is worth keeping. It is not a good idea to under price your wholesale accounts. I would go to them and explain that I am giving them the best price I can and they need to keep their markup at a certain percentage to stay competitive, if they choose not too I would explain that I will not loose the job completely because they are overpricing and I will bid against them. You and I both know that would not go over very well.

I really have not taken it to this level and hope I never need too. But I don’t know how else to handle that scenario. Maybe someone here has had this problem and has the answer. We’ll see.

Shane

[Tom M]

Rueben, where are you located?
I’ve always had the mix. I’d be happy to answer any questions that I can.

One thing you need to decide first: Do you still go for volume, or do you go for class and service? That might require you to change your fabrication style from a production set up, to a more custom set up. It shouldn’t be a problem, but it is often more expensive. Certainly the overhead is more on retail. You will be involved much more deeply in all situations. Watch out for the engineers. The silver lining is this: The customers who pay the prices, will be the ones who can tell the difference. They will also tell their freinds.

I have one wholesale price. There are always reasons to get better pricing, but they are all job to job. A Dealer that believes in Solid Surface is a goldmine, though. Don’t lose them.

Also, make sure you get paid what your installation is worth. You deserve a profit, same as the customer deserves extraordinary service. Include tear-out in that, too.

The main thing to remember: Yours will be the face your customer associates with her job. My Dad always said that if you see a customer in the supermarket, you shouldn’t feel the need to hide in the next aisle. The good news is you have an opportunity to inform them of the benefits and deficiancies of this product. There is no one better suited to do it, and you can make sure they understand the downs, as well as the ups. It is better for all parties that they get the right information. That doesn’t always happen when you’re not the one doing it. But when you’re done with the job, and they let you know how pleased they are, that’s a good feeling, right there.

Make sure you print up a good agreement. I am using a template provided by the NKBA, modified a bit for countertop-only purposes. I also include a page I call Fact sheet addendums, unique to the product, but general on the installation. There is an acknowledgement they sign on the agreement, that says they have received this. The fact sheet gives not all, but most of the important cautions they should know. You give them an awful lot of info, way too much for them to be expected to get. This is a nice reminder.

And for goodness sakes get a deposit.

50% is cool, these days, though we waive it for repeat customers. It ain’t our money till the jobs done, anyway.

[Tom M]

I
had set up a policy if I know the customer has been to one of my
“wholesale” accounts I will not sell to them. I don’t no wether that is
good practice or not but it kinda bothers me and sometimes I have to
fight the to high price thing when I know I have been competitive most
of the time.

Yeah, and it probably happens more times than we know. I used to refuse the job, but I was never sure if it was legal, or not. Don’t forget, though: sometimes they see you first, then the Kitchen Dealer. If there is a legal way (I would assume after the dealer quotes) let the dealer know, say, what your margin difference is. Let them figure out the rest. Be comfortable with your mark up, then sell the job.

Tom

[Reuben Hoff III]

Tom,

Thanks for the input. I have been struggling with how to go to a retail bases for some time and if it is the correct move or not. I live in Nebraska, however in Rural Nebraska, Mory has in Omaha abot the same population base or actually more than me trying to cover 2/3 of the state. So I have been trying to figure out a way to serve the area and give them the prices as close to what the can get if they were in the more populeted area. I have added cabinet sales and installation, tile floors etc and install to my mix to keep cash flowing around my local srea, but I would like to expand into the two larger towns (both only 20 – 30,000). I can’t seem to get to many people wanting to jump at selling countertops and I need to try and reach the contractors, but I know I will have to come in with some good prices and options first. So then I stop and think maybe it would be easier to go retail and offer discounts if the contractors start coming in, sorta like the lumber yards I guess. Hope this did not bore you, but thinking out loud and seeing what others might be doing in this type of situation.

[Author]

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