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Old 03-08-2008, 12:00 PM   #1 (permalink)
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a spinoff of the cancellation thread, didn't want it to go in 13 different directions at once.

Dougster wrote
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In regard to materials risk... I absolutely require that my clients contract directly with the materials provider (even if I am picking up and transporting). I guess I am fortunate that in my particular business focus (i.e., ditch digging), this has never become an issue.
Ok, I saw that and I think that's not too smart. I have to go get it, I have to use my money/credit to get it, and I have to order it and meet the guy but I mark stuff up 20% off my cost (which is still usually lower than retail).
I think you are missing out on a significant source of income here Dougster. Sure, some risk, but not tons and that way you aren't waiting there for stuff to show up because the customer bought the wrong stuff.

I either charge X per ton or X for the whole job to include so many tons.

others?

Brian H
Longmont CO
Pasture Maintenance
NH TN75DA, NH TC45D,
06 Chevy Duramax 2500HD
03 Freightliner Columbia MBE 460
 
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Old 03-08-2008, 12:35 PM   #2 (permalink)
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a spinoff of the cancellation thread, didn't want it to go in 13 different directions at once.

Ok, I saw that and I think that's not too smart. I have to go get it, I have to use my money/credit to get it, and I have to order it and meet the guy but I mark stuff up 20% off my cost (which is still usually lower than retail).
I think you are missing out on a significant source of income here Dougster. Sure, some risk, but not tons and that way you aren't waiting there for stuff to show up because the customer bought the wrong stuff.

I either charge X per ton or X for the whole job to include so many tons.

others?
Just a couple odd points on that: My main business is helping homeowners with some portion their pet projects... virtually never the full scope. Mine is a limited scope specialty service... a piece of their project's puzzle... and specifically not marketed as a turnkey anything (although that could all change with my new strategic partners). In this regard, my clients generally understand that we are partners in whatever endeavor, not strictly defined client and service provider. More often than not, I act as an advisor. I work with the client to make sure they get the right materials at the absolute lowest cost. What I lose in a potential materials markup I usually gain back in increased hourly or daily billings.

Also, so far, I have yet to find wholesale prices for any needed commodity that would enable me to add a percentage markup and beat what a homeowner could procure directly. In fact, I am often amazed at the deals that homeowners can manage to work with certain local suppliers dealing directly. Part of this is the very large quantities and bulk nature of the materials I work with and part of it is probably my lack of leverage and/or poor negotiating skills with the local suppliers.

But the bottom line is that I prefer to get paid for pointing these folks in the right direction and avoiding the direct financial consequences of materials procurement and handing should things go bad. I take the same basic approach with permits and disposal costs to the extent that is possible. I always try to limit my financial risk solely to the value of my work.

Dougster
 
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Old 03-08-2008, 12:59 PM   #3 (permalink)
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Also, so far, I have yet to find wholesale prices for any needed commodity that would enable me to add a percentage markup and beat what a homeowner could procure directly. In fact, I am often amazed at the deals that homeowners can manage to work with certain local suppliers dealing directly. Part of this is the very large quantities and bulk nature of the materials I work with and part of it is probably my lack of leverage and/or poor negotiating skills with the local suppliers.
If it involves me having to pick it up, or have to help them pick what they need, I bill my time and effort of this into the job. If they make the arrangements and purchase from elsewhere, I'm ok with that but no guarantees on the shrubs, etc and I don't start until everything is there prior...plus the quality usually isn't there either.

You should work on finding suppliers who dont sell to homeowners, and take it from there. Making a few % points here and there beats making none. Leaving money on the table is not what you want to do on a regular basis.
 
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Old 03-08-2008, 01:42 PM   #4 (permalink)
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If it involves me having to pick it up, or have to help them pick what they need, I bill my time and effort of this into the job. If they make the arrangements and purchase from elsewhere, I'm ok with that but no guarantees on the shrubs, etc and I don't start until everything is there prior...plus the quality usually isn't there either.

You should work on finding suppliers who dont sell to homeowners, and take it from there. Making a few % points here and there beats making none. Leaving money on the table is not what you want to do on a regular basis.
That's how I handle materials pickups, transfers and disposals: I bill by the hour at the "truck and dump trailer" rate.

Haven't done any tree or shrub plantings yet, but I sure did run into a quality problem with a lady who ordered a couple hundred yards of fill on her own prior to my portion of her project. Mama Mia... that was nasty stuff!!!

Dougster
 
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Old 03-08-2008, 05:56 PM   #5 (permalink)
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It has been my experience that most (not all), but most people just don't want to deal with it. They just generally don't have the imagination, time, energy to deal with it, they would rather just write a check and have YOU handle it.
some people are only out for lowest price, fine, I can deal with those people. But most people just want it handled and are willing to pay for it to be handled.

I think you are leaving a lot of money on the table. You'll also end up with the right thing and you can gaurantee you got the right thing.

Brian H
Longmont CO
Pasture Maintenance
NH TN75DA, NH TC45D,
06 Chevy Duramax 2500HD
03 Freightliner Columbia MBE 460
 
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