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  1. #14
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    Nov 2008
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    Chapel Hill, NC
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    To the OP:

    Was the "4 x retail cost" just the cost of materials? To which was then added the additional and usual "service" charge? If so then I think you have reason to be upset. If the "4 x retail" cost was the total cost of the repair then I think the posts above are probably reasonable - it does cost more than parts to run a service business.

  2. #15
    Join Date
    Jun 2005
    Location
    Winston-Salem NC
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    1,133
    Quote Originally Posted by Brian GC View Post

    A 400% markup on anything is absurd .
    Really? The soda at McDonald's cost McDonalds less than a penny per cup, with an extra .04 cents for the actual cup. Do you really think the drug manufacturers are paying 1000.00 plus dollars for some of the pills they sell for that much each? Mark up is more than saying it costs me "x" so I wll mulitply it by "y" and that is my mark up.
    Mark up involves cost, profit, and the length of time you have to carry it around. My R-22 is not marked up any where near what I mark my MP-39 or R-404. I go through a lkot of 22, not so much MP-39 and very little 404, but still had to buy a full jug, instead of the 3/4 of a pound I needed.
    As far as making a profit on labor, you must be really good. Almost every company I have worked for, and my own business, labor is a very small percentage of profit, if any. Most of the time, by the time you figure pay, taxes, insurance, vacation time, sick time, and training, you have gotten down to the break even point.

  3. #16
    Join Date
    Dec 2006
    Location
    Middle Tennessee
    Posts
    11,347

    *

    Quote Originally Posted by spudman9 View Post
    Two questions:The price of the R-22 recharge was marked up nearly 4 times from a retail figure. Is that normal or am I being gouged?
    it's more than fair, you should have been charged more, it was delivered to your house

    Secondly, with a 10 year old unit, should I consider a replacement or repair.
    it depends on the condition of your system
    Spudman, let's assume you sell potatoes for a living;

    you buy a truckload of potatoes from a farmer, they cost you 20 cents per pound!

    is it that outrageous to consider you may sell them for 80 cents a pound?

    now remember;

    your gonna have to truck those potatoes to the guy your selling them to, which will indeed cost you time and gas money.

    most customers don't think (or care) about what it cost to run a buisness

    a big chunk of the money you pay for your service call, goes toward a list of things that you can't imagine

    after all that stuff that you can't imagine gets paid for, then the boss gets to have a hamburger (homecooked)



    .

  4. #17
    Join Date
    Dec 2008
    Location
    Buffalo NY
    Posts
    3,128

    Cool

    How can you come up with a retail price for R-22 anyway? I have never seen it at sears, target, walmart,ETC.
    Join http://scopeny.org/ Shooter’s Committee on Political Education

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  5. #18
    Join Date
    Jun 2005
    Location
    Winston-Salem NC
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    1,133
    Quote Originally Posted by qwerty hvac View Post
    How can you come up with a retail price for R-22 anyway? I have never seen it at sears, target, walmart,ETC.
    Because unscrupulous companies sell it on the web, same way they sell supposedly "dealer only" equipment, with the refrigerant removed on the web also. Of course I have seen homeowners buy these units, install them and then expect me or another company to fill them with refrigerant and repair them if needed. Sort of like the guy who bought himself a 5 ton HP to save money. He couldn't figure out why it had three lugs on the contactor, and his disconnect only had two wires plus ground.

  6. #19
    Join Date
    Oct 2005
    Location
    sacramento calif.
    Posts
    1,191
    first thing i would do is to go out to the condenser he put 15 lb.s of r-22 into, find the data plate & read what the unit comes shipped with. this is not the correct charge necessarily but close. when the math on that kicks in you can better judge his advice to change the system.
    i as most all contractors have a standard markup on parts but refrigerant is different. when the epa regulations came into effect alot of costs associated with coming up to speed with the regulations came along with. now days as a rule r-22 isn't routinely just released into the atmosphere. you gotta know i was not going to be paying for that, now you know who is and where it gets tacked on .
    i was born under a wandrin star.

  7. #20
    Join Date
    Mar 2008
    Location
    Long Beach, CA
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    3,545
    Quote Originally Posted by Mr Bill View Post
    Yea, they do the same in Houston they hire Illegals or cheap labor at $7.50 an hour "maybe" so yes they do ok at the end of the year also with just labor, at a 400% markup on there labor, but I guess that’s ok.
    In LA you would have to look hard for an Illegal to work for $100/day. If he knew a little about his trade you would be paying him $120/day. If he was fairly competent he’d get $150/day cash. On top of that he would not be a legitimate write-off so you’d be paying his taxes too. So to make 400% on an Illegal as you stated is unobtainable. Besides, Illegals screw up everything even digging holes and end up costing more in the long run. Are you really saying a typical $65/hr labor rate plus 20-50% markup on materials is not enough to run an HVAC company? If not, what makes them so different than other trades?

    The OP never clarified whether the invoice had a separate charge for the labor or service call. Labor should have overhead and profit included in it. Material markup covers other things about the product like procurement, liability, warranty, and profit. Maybe 400% is ok for Freon because the liability and warranty is risky, but not for other products.

    BTW, I am not quoting prices per the rules, I am questioning labor and mark-up rates which I believe is allowed.

  8. #21
    Join Date
    Dec 2002
    Location
    Houston,Tx.
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    16,075
    Quote Originally Posted by Brian GC View Post
    Are you really saying a typical $65/hr labor rate plus 20-50% markup on materials is not enough to run an HVAC company?
    I don't know it depends on your needs or greed's "or" maybe how large of a company your trying to support. I have always said that overhead is a personal problem no one makes a company grow, you have to want to grow, we stay small, to do so we actually turn down a lot of business but that's my choice. It's obvious that the larger company your trying to build or support your prices will have to move according to growth, this is why most larger company's charge more for there services and products, I think that's pretty much a given.

    Brian, I have recently got into the GC business because of Hurricane Ike and I can tell you the stress level is way lower than the a/c business, I wished I would have done this 30 years ago instead of the a/c business because in hurricane alley you can make a great! honest living being a GC, my GC business has just exploded beyond my most vivid expectations.

    Brian, I guess some price according to there needs or greed's and that could be a major contrast, right? we all want to make a profit, or our customer won't have us to call because we will be out of business, but one mans profit margin will always be different from another mans, depending on his needs or greed's, and if you think about it these two things are really the only two definers of how much we all want to make,right? I personally am a very content person in life, God, family, roof, transportation, food, and I am pretty much good to go, but others may want more out of life, nothing wrong with that, except it just takes a little more money.
    __________________________________________________ _______________________
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  9. #22
    Join Date
    Dec 2002
    Location
    Toledo, Ohio, United States
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    Twilli says a little gouging never hurt anybody.
    No Heat No Cool You need Action Fast

  10. #23
    Join Date
    Jun 2007
    Location
    The Twilight Zone
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    2,964
    Quote Originally Posted by twilli3967 View Post
    Twilli says a little gouging never hurt anybody.
    That's what Enron thought

  11. #24
    Join Date
    Dec 2002
    Location
    Toledo, Ohio, United States
    Posts
    12,911
    Twilli got a parachute
    No Heat No Cool You need Action Fast

  12. #25
    Join Date
    Apr 2008
    Location
    TEXAS
    Posts
    1,701
    r-22 profit formula: nunya x nunya = nunya. nunya dam bidness!
    "When the people find they can vote themselves money,that will herald the end of the republic" - Benjamin Franklin

    "Government is not reason, it is not eloquence, it is force;like fire, a troublesome servant and a fearful master. Never for a moment should it be left to irresponsible action"- George Washington

  13. #26
    Join Date
    Jan 2004
    Location
    Lancaster PA
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    Quote Originally Posted by smittyii View Post
    r-22 profit formula: nunya x nunya = nunya. nunya dam bidness!
    This is what I think of that.
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