Unreasonable to think it's unreasonable?


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Old 07-23-06, 03:32 PM
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Question Unreasonable to think it's unreasonable?

Greetings:
I just had some rough-in plumbing work performed by a reputable plumber. We agreed to a Time and Materials arrangement for the work.
His hourly rate was pretty pricey ($130 hr.), but I was o.k. with it because I figured that he could be trusted to do a good job. I was not disappointed at all how the job was performed. My problem is with what appears to be a huge markup, perhaps as much as 3X retail, for the materials. In retrospect, I should've known to ask what his materials markup was so I could decide on the value of his doing the job. If it was close, even with 25-30% of what I'd anticipated, I'd have been fine with it. I want him to make money for performing his craft. However, when the materials cost came in at an even $2,000, when I'd figured $1,000 high side, I had to count fittings. High-end retail for the materials, not counting incidentals like solder, flux, brushes, blades, etc. was around $630 before sales tax of 8 1/4%. When the bill came, the labor was as expected but the materials charges were that $2,000. The difference is a rather large sum to just chalk up for experience.
Is it possible that the materials he used were superior to what the were selling at True Value, so that they'd be 3X the price? It doesn't seem likely.
Again, he did good work but I find that this is besides the point. Is there a markup on materials that normal, by convention? Is it anywhere near 300%? Thanks.
 
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Old 07-23-06, 03:46 PM
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Never heard of that high a mark-up on materials. Ask to see a price list receipt on his material cost. Not likely he will show you though. Going in blind on a Time and material job is not a good idea. Always go total cost estimate. The cost of incidentals is staggering unless you had one heck of a lot of work done. My opinion is that if the deal was for time and material, you should get a look at the receipts for the material and a breakdown of his markup. Otherwise, your statement that he was a reputable Plumber is incorrect. Good luck.
 
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Old 07-23-06, 03:50 PM
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It can be unrealistic to compare prices to HD, Lowes, etc. These are discount, prices close to wholesale. Your plumber will have to charge you retail list price. For fittings and things like that, it could be 3X the HD price. Certainly for a faucet, it could be almost double. Remember that he doesn't buy from HD. They do not provide him with the kind of warranty that HD does. Also, his price has to include the cost of warranty work if a manufacturer's item does need to be replaced. The box store will be happy to exchange an item for you, but they don't install it for you. You would expect your plumber to come back , and that is part of the cost.

As far as routine supplies, he has to maintain a well stocked truck, and there is a time value of money factor in holding inventory.

His labor rate covers things like his salary, travel time, payroll taxes, business license costs, insurance costs, etc.

Only a comparison to other contractors in your area would tell whether your guy is high.
 
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Old 07-23-06, 04:07 PM
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Maybe I misread/misunderstood the original post. Rough-in does not include fixtures or even valves for fixtures where I have done work. It is strictly the water and drain lines stubbed in for fixtures. Caps on the waterlines for testing and a test on the drain lines. Only return by the Plumber would be for failed inspection (which he should have been present for anyways).
BrianW, would you explain exactly what was done? Was this a complete plumbing job or a rough-in?
 
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Old 07-23-06, 06:38 PM
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Specifics

The plumber replaced soft copper pipe from '75 repipe (Long story, applies to tract vs. builder), ran new supplies to added sink, ran new ABS vent lines for same, installed shower valve, 2 tub valves (Newly erected wall studs, open both sides), installed new toilet flange, installed new drain line to tub drain, installed new shower drain flange. I suppled valves, with the exception of 2 ball valves he installed before the tub valves (Retail $6.00 per valve at True Value). I did a pretty thorough breakdown once my curiosity was piqued due to what I thought, almost intuitively, was a very high materials cost. I figured in hangers, pipe shields, 90's, T's, pretty much all the fittings, and a fudged up linear footage of copper pipe. The True Value price on the pipe was 1/2"x10'/22.49, 3/4"x10'/34.99. The materials supplied by the plumber was copper pipe, copper fittings (1/2" and 3/4"), ABS pipe 4", 3", and 1 1/2", along with ABS fittings, the two ball valves, shields, nylon or plastic straps, nylon insulators every other joist (This was 2nd story bathroom). My brother, the carpenter, opened up the access for the plumbers. It's not about the labor, it's purely the markup on materials that surprised me.
I'm a real estate agent. If I were to list someone's house at a flat rate of $5,000 plus advertising, instead of a % of a sales price, I would expect someone to question an ultimate $10,000 charge, being that I only ran 5 ads, at roughly $300 per ad. I don't see this as being at all different.
Now, if his materials are of a significantly better quality than what True Value offers, it might go a long way in justifying the price.
Does 594tough really believe that a plumbing supply house would be charging that much more than a Depot? Besides, I didn't compare the price to Depot, but rather True Value, which I'm sure is retail/retail.
Thanks for your input.
 
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Old 07-23-06, 07:29 PM
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I agree with majakdragon's statement in that it's a better idea to get a complete cost estimate for the job upfront. Paying someone a high hourly rate and leaving free reign for materials gives too much room to drastically overcharge on either count. Marking up the costs of material is a usual practice and not dishonest exactually though. There is time involved in obtaining them and always unforseen expences however I think 3X is a bit steep. I don't know what you could do to resolve it at this point but remember next time the better way to bid a job. I personally do not like to work hourly at all anymore. Makes me feel like I'm ripping off the customer everytime I go have a smoke or something lol. Too bad you didn't know me I would have done it for much cheaper. BTW up here there are plumbing supply stores that will only sell to licensed plumbers with an account with them and they sell at a reduced rate then you would get at the big box stores.
 
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Old 07-24-06, 07:35 AM
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Somewhat resigned to it, but....

I agree, ex-post-facto, that I should've asked what his materials markup would be, or an approximate materials cost.

(Backround): The way I met this plumber was when I was doing some door-knocking after having sold a house in his area 7 years ago. He seemed like a good guy. Since then, I 've had him do a few jobs for me when a client needs a plumber. My brother, a general contracting carpenter, has since used him on a couple of pretty big jobs.
"Marking up the costs of material is a usual practice and not dishonest exactually though."
While it may not be dishonest, I find it at least disengenuous. I would also guess that if I was mad enough to seek redress in the courts (Which I'm not), a judge may see the markup as excessive, of a material concern, and non-disclosed, amounting to a truly hidden fee. In real estate jargon, it's called a "secret profit", is against regulations, and can subject the licensee to suspended or revoked license.
As I said in my example for my business. If I went flat fee plus advertising (Similar to time and materials), would I be charging 3X what my actual costs were? No way. I'd most certainly be open for disciplinary action by my state's (CA) department of real estate, if a client wanted to complain.

While I don't want to cause any ill-will with this guy, as he seems to be a good guy and all, plus my brother likes his work, I believe it's important let him know that I have taken notice of it, and am not happy. He may realize then, that he's got a good chance of not getting the finish work, or the work that will be done in my kitchen. If he does, he'll be bidding it, as he's now guaranteed that it's not a guarantee. I'm very easy to work with, and want crafts-people to make a good living. However, I don't like when I feel like I've been taken advantage of. I can't help but feel that this was the case here. It will not happen again. I'm glad that I didn't have him do anything else on this invoice.

I just thought of something else. Don't contractors dislike the common practice of consumers getting the standard "3 bids"? If contractors don't want to go through the competitive bidding process, they should be aware that they must somehow render them unnecessary. They do this by treating people fairly. The reason that the plumber in question got the job without bidding is because I expected fair treatment. Perhaps such things are just "pipe dreams".

Anybody know a good plumber in the Los Angeles, CA area, Conejo Valley in particular?
 

Last edited by BrianW; 07-24-06 at 07:48 AM.
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Old 07-24-06, 08:30 AM
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Afraid I don't know anyone on the west coast. I am on the other side of the country but as far as contractors not liking someone getting 3 bids, even as one myself I say too bad! I will often encourage the home owner myself to get other bids before me. If they like me and want me to do the work I will sometimes offer to beat the lowest bid, within reason of course. This actually can be an advantage to me sometimes as I have a tendency to under bid. I don't know if you paid him already or if you have talked to him about it but I would mention you are unhappy with the material costs and maybe he will come down a bit.
 
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Old 07-24-06, 10:10 AM
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Update: Talked to plumber.

The plumber called me and explained that his costs were a bit higher than what I thought. I told him that I didn't just make up the 2-3X markup number, that I'd priced the materials at True Value. He said that he doesn't order from them, as they mess up the order many times, where he loses any cost benefit. This is understandable. In the end, he cut my materials cost by $200 (10%), and understood that I wasn't trying to squeeze him, but just expected fairness all around. He had no problems with it. He said that, relative to the whole job, rough-to-finish, I'd already absorbed 85% of the costs.
I'm happy, he knows that I'm reasonable, but not clueless, and all's well. Let that be a lesson to me.
Thanks for all of your input.
 
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Old 07-24-06, 10:24 AM
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Originally Posted by BrianW
Don't contractors dislike the common practice of consumers getting the standard "3 bids"?




Although retired now, I never considered this a problem. If a customer thought I was charging way too much, getting other bids educated him. Often I would get work even though I wasn't low bidder because of my reputation. Also discussions with customers over prices gave me a chance to explain why my price might be higher but my profit less due to better materials or more time spent to do the job right.
 
 

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