Price Variation

[-80guru]

Reasons for pricing vary. Yes, someone has to charge more because of overhead versus someone with little to no overhead. The quality of the work is not always determined by the cost of the job. I could charge x number of dollars to do a install, make plenty of money and have a higher level of quality than a bigger company charging more. There is another thing called competetive advantage. If company A has little overhead, then he has a compteteive advantage over company B which has alot of overhead. The customer may trust or feel more comfortable using company B, price or quality having nothing to do with it. Oh there may or is a percieved quality the customer has for Co. B and that may be the reason for the customers comfort for Co. B. Customers choose contractors for many different reasons. I agree with many of the posts here.
1. Charge what yoou think you are worth.
2. Charge what you feel comfortable charging.
3. Charge the same as the big guys, so as not to lose out on extra profit.
Most of all, charge what YOUR business NEEDS to charge to stay in business.

[aircooled53]

Originally posted by maizenbluedoc
Does any contractor properly educate the HO? I worked in sales many years ago, and the one thing I was taught, "You know the price and the customer doesn't". This is true with most items sold. If HVAC manufacturers published a price, similar to MSRP, the customer would at least have indication what to pay. I find a price variation of $4883 to over $8000 to be unrealistic. I realize this is a capitalistic society, but this is a bit much. In fact, the lowest proposal (I will reiterate for the x time)was the only contractor that had a typed, specific proposal for my perusal. It appears that a standard Trane warranty was in place. I found no difference in the sales pitch other than the price. All are well known companies that have been in business for decades (including the company contracted by Home Depot) Had I not solicited the 5 proposals, I could have been convinced by the $8000 price sticker that they were the one to select. My closing comment when selecting HVAC suppliers is caveat emptor.

You as a homeowner have the right to take the cheapest price...Why, because you want what you pay for..
Then you will get just exactly what you paid for and nothing to grip about if there is a problem with existing ductwork/cfm/indoor air quality/inspection/codes/training/EPA....

[maizenbluedoc]

How many times do I have to state that I am doing what I was instructed, "go with the contractor/installer you feel confortable with". I have heard ad neauseum, "cheap isn't always better, you get what you pay for". Attempt to convince me why the more expensive HVAC person will do a better job? It is obvious there is an inherent fear that by some offering a lower price, business will be diverted from the higher priced people. A long as we live in a capitalistic society, people are free to chose, and that is what I did. Finis!

[tinknocker service tech]

maizenbluedoc

you have a good point in all you have said. you got five proposals and what about the three in the middle
in defense of of them. you posted a loaded gun here. you gave low and you gave high and said nothing about the three others at all. ever asnwer in here is honest and to only one point. one is to low cheap and one is to high expensive. the ones in the middle competative to eachother
so to ask a question and looking for real answer one should give all the facts involved with the question.
so to snswer you as a home owner in stead of a tech
here is where i sit
take in five bids, kick out the low guy right off the bat. red flags go why so low. kick out the high guy again red flags why so high. check out the three in the middle fine out witch one i feel comfortable with and he is the one. even if i have to call hima few times or have him come back over for another visit to sked questions and see just how much time his is willing to give me
if you can send some pictures of the job when done please
i do wish you well and hope all works well for you

[coolu]

maizen, we don't have to convince you of anything. Glad you made a decision though. There is no fear that business will be diverted, there is plenty to go around. Some of us just want the ones with less business skills to earn what they are worth. The failure rate of HVAC companies is extremely high. If we help educate we can all earn what we are worth. Are you french?

[ps]

Originally posted by aircooled53

You as a homeowner have the right to take the cheapest price...Why, because you want what you pay for..
Then you will get just exactly what you paid for and nothing to grip about if there is a problem with existing ductwork/cfm/indoor air quality/inspection/codes/training/EPA.... [/B]

With this reasoning you cannot gripe about ANY work, low price or high price!

Many good side-points have been posted, but most have missed the real point of the OP. Equating lowest price to poor quality implies highest price equals highest quality. This is seldom the reality and actually encourages the hacks to charge more. There is no objective process to identify potential quality workmanship.

How do you know that the lowest price wasn't offered by the most skilled and proficient tradesman who's price reflected attempts to gain marketshare, best business practices, access to special rebates, etc - while the higher bidders had poor skills, bad business practices, etc? The lowest/highest price "rule of thumb" is probably one of the most detrimental generalities in any business - and when blindly endorsed by companies in the industry often times leads the HOs straight into the arms of the hacks you are trying to weed out.

[maizenbluedoc]

Thank you. Finally, someone posting something with logic, not defensive remarks. I concur, I may not get the best service with the lowest price, but I also may not get the best service for the higher price. If, in my evaluation of all 5 installers is correct, and I haven't anything to convince me otherwise, I would be less than intelligent to go for the higher bid expecting superior results. Carpe Diem!

[dash]

It appears logical to you,because it supports the decision you want to make.No offense intended!

We are priced higher then our competiton,for a multitude of reasons.

I know it's human nature to go with the lower price ,reasoning that I'll get the same job,I've done before,and will probably do it again.A few times it worked out ,but the majority of the time it didn't.

[maizenbluedoc]

I find comments made by some to be generic and general in nature. You are basing your comments on personal experiences or situations. If anyone lives in the Charleston, SC area would like to comment, feel free. Some prices are higher because of unions and a plethora of other reasons, but in my case, both companies are similar in all aspects, including good references. The only difference I have discovered is the higher quote has 14 techs to pay vice the lower who has only 4 techs.

[Gunnery Sergeant Hartman]

Let us know how your install pans out over the next year.

Actually, can you post some pics?

[boilrmakr]

You get what you pay for. Please keep in mind you are not just buying a box that everybody sells. You are buying the complete job. I shop price when I pick something off a shelf or order from a catalog and don't require the seller to be competant or educated...I just by a box. But when it really matters I pay more for the knowledge and quality/commitment of the installer/mechanic. If you are paying less you are getting less somewhere. Your comfort is comprised of more than just the box. "Small guys" that charge less because they "can" will always be small guys that charge less. This business is plagued with "price". Anybody can win a job by pricing it at or below breakeven, a professional wins a job by selling the quality and commitment to back up a true system. "The quality is remembered long after the price is forgotten."

[Black Adder]

Price has no reflection on quality, the guy with the higher prices is usually the biggest add in the yellow pages, I am one of your "little guys" I am happy to be a 1 man show and have no desire to build a big company and make no apologies to anyone on this issue. When I price a job I price it with a reasonable percent of profit built in. I don't price jobs according to what the other guy is pricing. In my area I can easily make $1000 a day installing AC or Heat pumps. How much more should I be making? I can't justify charging more than I do just because the other guy charges more. I do good quality work, am proud of my reputation and don't have to advertise to get work. My ad campagn is word of mouth from my customers and this is the best feedback as to the quality of my work and relationship with my customers. As far as I can advise the only way to find a competent contractor is through references. " do a good job and your customer will tell a friend" " Do a bad job and your customer will tell 10 friends" Let me know how you make out with your install, I am sure it will all work out fine.