Asked to reveal profit margin!!

[david3042]

I have just been asked to provide quotes for three PV jobs. They are all linked in that the customers all know each other. Two of them are quite large - 30kW and one is a standard 3.68kW mounted in a field.

The problem is - they have asked me to break down the all the costs so they can see what I'm making I guess. They also want to be reassured that they are getting a good price for the three jobs.

Just wondered if anyonone else has had experience like this. I usually just give an overall price and hide all the profit margin etc.

Anyone happy to let me know (by direct email if necessary) what gross profit margin they would charge I would be most grateful.

 

[keniff]

Your price is your price, at the end of the day if they accept the price and are happy with your work what's with all the nit picking. I hate customers like that, ask them what they earn in their job lol not worth the hassle sometimes, but also hard to turn away work

 

[Cider]

Its obvious they are looking for a deal.
Nothing wrong in that but dont end up so that one of the jobs makes no profit, it cant be all their way.
I would price the jobs individually and give a discount to each job on the basis they all sign up.
How much profit you make must remain your businees and certainly not for them to know bacause what ever they discover it is will be too much for them.
Stick to your guns

 

[grandfortune]

make sure you bump up the cost of your materials, ive been asked in the electrical side, i just put a bit on materials so the labour doesnt look to high, but as your pricing three jobs make sure that the same items are the same mark up.so put 20% on and show you have made 5% on materials.

 

[solarsavings]

I wouldn't give them a breakdown on price either unless they agree to pay extra for any time lost to bad weather or unforeseen problems, rotten battens etc, or the things I'd forgotten of course ;-)

I had a customer tell me last week how well I was doing out of his job, that after we priced against several other companies (rich gits) and won the job.
As soon as I can afford it I'm going to buy a winning lottery ticket.

 

[gr7]

We always provide a priced bill of materials when quoting, including our labour charge. I don't see why this should be a problem and is in line with REAL assurance consumer code. A priced list of materials does not reveal your margin as the customer does not know how much you pay for materials.

 

[SRE]

We always provide a priced bill of materials when quoting, including our labour charge. I don't see why this should be a problem and is in line with REAL assurance consumer code. A priced list of materials does not reveal your margin as the customer does not know how much you pay for materials.

The only problem with that is that some wholesalers have their prices on the web and given that some of our customers are telling us about new standards coming out they'd proabably mange to find the wholesale prices and ask for a discount. Otherwise I'd be more inclined to provide an itemised bill.

 

[gr7]

@SRE
Nobody has ever questioned our prices or asked for a discount, even after looking around the web for module/inverter prices. We are running a profitable business and expected to add a fair margin to material costs.

 

[david3042]

Excellent replies - many thanks. I was thinking of adding to the materials to reduce the labour/profit figure. Cheers.

 

[malcolmsanford]

David if your use to just dealing with domestic clients then you may not have before been requested a cot breakdown for a quote.

In commercial/industrial projects this is something that is recognized as a standard practice. By breaking up the "project" costs into materials, transport, administration, labour etc etc, will not give your profit margin away.

 

[SRE]

@SRE
Nobody has ever questioned our prices or asked for a discount, even after looking around the web for module/inverter prices. We are running a profitable business and expected to add a fair margin to material costs.

Good to know - I've been tempted to do it myself, it seems like the decent thing to do.

 

[david3042]

Thanks again. Some very useful ideas and advice.

 

[mogga]

IMO if they agree the price they agree the price IF they start winging about it tell them to go DIY and wait for the phone ringing for advice then go sort it at day rate and charge by the min
I have a client wants me to list every penny I even put down time getting stuff listed it to the minute INCLUDING the traffic jam Totaled at nearly 1.5 times the original price id given him he then started asking to go bakc to way it was NO CHANCE !!!