High end products

Grumpy

When I am talking about pricing jobs I am talking gross profit. Net profit is what I get to take home. I don't think of net profit in terms of %. I think of it only in terms of dollars and cents. I know how much it costs me per day to run my business, therefore I can always factor on that operating over head into a job. If the job took 2 days and we didn't hit enough gross profit to at least cover that number, there is no net profit.

I however do not add either gross nor net into a job as a line item. I use a % to markup labor and materials. I think double check the number and make sure the % is enough to cover the expected days to complete the job. I will then use which ever number is higher to submit my bid.



It's obviously harder to sell a job at 45% markup since the gross profit from a 3 tab to a grand manor is literally double. When most jacks are out there estimating their jobs the way a commercial manufacturer told me "sell the materials at cost. You make your money on the labor." Pssshhh! Yeah right!


As far as the sure start goes, it's all or nothing. Go with the 5 star or just get the standard warranty. Having three levels of upgraded warranty is just way too much and not necessary. It's taking the good better best too far. I don't even approach my customers with anything other than the 5 star coverage.

__________________
-Grumpy
Chicago Gutters Chicago Roofing

OUTLAW

I agree about the 5-star. Its all or nothing.

My CT rep says to give the 4-star standard and then upsell the 5-star. I think thats to confusing.

user182

Did the 5 star help because they wanted better coverage or was it the literature that helped?

The point I was trying to make is that chart with all the warranty options is too confusing.

user182

Does your formula for gross profit factor in "rain days". I would guess we get about 200 days per year with good weather.

Correct me if I’m wrong but basing your prices on gross per day would require you to know how many days of good weather you are going to have per year.

I’ve kicked the idea around a few times of doing it your way but I think it might make my prices unrealistic.

I think there are better ways of doing it, which we discussed in your thread about mark up.

Grumpy

365 days of overhead divided by 200 actual working days... so yes it does factor for rainy days. On average we have 225 working days per year. This is factored over 15 years in the business, where I took my former bosses numbers and kept rolling with them.

Pricing unrealistic? I'm not the highest and not the lowest. In that CT round table I discussed earlier, there were 10 guys and I was the 3rd highest, right where I want to be. The lowest guy was literally half the price of the highest guy, and the lowest guy was 5k less than me.

__________________
-Grumpy
Chicago Gutters Chicago Roofing

OUTLAW

Grumpy,

How did you know what everybody's pricing was at the roundtable?

I have been to quite a few of the CT meetings and the subject of price was avoided like the plague.

user182

Which do you prefer Lamarite of DiVinci?

Have you ever installed either one?

I think I should start showing prospects products something other than asphalt shingles. I need to determine what to offer.

You have to have a system that you can follow every time. You don’t want to offer too many options because they may get confused.

You also have to have samples and literature available to show the prospect so you have to limit the number of choices somehow.

Which one would be easiest to sell & install?

Would you better of to offer steel instead?

OUTLAW

I've sold quite a bit of Eco-star Majestic Slate. Certainteed has a new product called Symphony. IDK, look at some samples and decide which one you would put on your own roof.

OUTLAW

I attended the roundtable last week. Now I see its different than the PRAC.

My # came in right at the national average.

low was $6100

high was 16,500.

mine was second highest

all the rest were between 8k and 10k

interesting meeting although I disagree with OH as a percentage of sales
that don't work well with hi-end materials or labor intense jobs
OH is a matter of time

user182

CT requires the suppliers to stock Symphony. So far I don't know of anyone stocking it.