Legal types--HVAC guy flaked

But are the cheapest hack and big contractor installing the same equipment?

 

I'm not smart enough to do the multi/broken qoute thing so here:

So, you are a sales guy for the equipment at the end of the day, yes?

Dissect away, I'd love to hear it.

More than one option, yet jt21, who is 6-700miles away from me says "yeah $4000 is about right."

Basic rules of the marketplace don't apply? Again, jt21 states their equipment cost would be about $1300. So lets say 100% profit I pay $2600 for the equipment that leaves $1400 for a half days work for one installer as my install couldn't be much easier access. So I should be happy to add $2700 for a days work?

I don't buy snap-on, but I do buy craftsmen which work just as well for my uses and have the same type warranty service other than house calls. I can drive to Sears if I need to.

 

I'm glad you asked!

In rare cases, you may have two companies on opposite ends of the price spectrum offering the exact same brand and model of equipment. So sometimes, yes.

The problem is that the equipment is only one part of the equation. A poor installer will take great equipment and turn it into a horrible system. Installation and design are everything.

An admittedly drastic analogy, but you can give me all of Troy Lee's best paint and tools, and you still don't want me painting your helmet.

The "product" contractors sell is the completed and installed system, not the hardware. So even if two contractors come to the same conclusion regarding hardware when designing the system, one will still produce a better performing and more durable product.

 

If you want a deal on a new AC, don't buy in July.


Seriously though, the licensed contractor (at least the one that has been around a while) has overhead and will back up a warranty claim. There is no guarantee that $1800 system you never got would have lasted longer than it took the guy to back out of your driveway.

 

A sales guy for equipment? Absolutely not. Please read my response above to CB186.

Please don't do the "you should be happy with $xxxx" thing. That boils my blood. I'm told a few times a year what my price "should" be after someone finds a part or piece of equipment online for much less than we charged. In order to determine a price, you would need to know the cost of sale and overhead of a company. Without that info, you're clueless.

Our gross margins are large, I don't deny that. 42-48% for installs and 60-65% for service calls. What people don't realize is that it costs a ton of money to run a company like mine. A business only gets money from one place, it's customers. So the 42-48% margin on an install needs to pay it's share of the overhead, or the company goes out of business. Basic stuff.

Despite the large gross margin, most companies net low single digits. That's because the overhead eats up all the margin. If I close a year at 10% net, it's a huge win. The superstars in this business are making 15-20%, and many of them are using tactics I can't support to get there.

My point here is that a company that is charging $4000 for a system is probably earning as much as $1920 gross. Of that, maybe $1520 will go to overhead, leaving the company with $400. Is that too much profit?

That price can be lowered by reducing cost of sale (no permits, cheap materials, reusing parts, cheap labor, etc.), or reducing overhead (minimal insurance, junk tools/trucks, no benefits for employees, etc.), but you have to be willing to take what goes along with cutting those corners.

 

$4k is a general guess.. could it be less? yes, could it be more? yes. My boss would LOVE me if i was able to bring in that much profit on one a/c install :up: however, once each piece of the pie gets their money, there isn't much left. Overhead is high in a reputable business, everyone knows that. By the time you get overhead, licensing, fuel, permits, labor for the day (2 guys + time) that end number isn't as large as one may think. Taxes local/federal are terrible for small business owners any longer as well. And then there is profit, you've gotta profit something or its not worth doing, there comes a point where breaking even kills the business then its another statistic.

 

What margin do you look for at your shop?

 

....

 

Which is a key point here, no one that is all upset here has any idea what equipment was to be used and frankly, it's irrelevent. Or what the guy that flaked has for experience knowledge etc. Again, it struck a nerve because it hit close to home for ones livelihood as he has already admitted.:up:

 

I use side job guys for a bunch of remodeling stuff and haven't had any problems for the lst 15 yeears after remodeling three homes.

Electical, plumbing, painting, carpentry, and if I knew a guy to do HVAC i'd use him too b/c the HVAC guys at the customary providors seem to charge an arm and a leg.

YMMV, but there is no set formula as to whether you should use a side jobber or an establish company. Either can be good or bad, and either can steal from the unwary.

 

Exactly, my point was that you agreed that the $4k sounded about right by just hearing the most basic of details of what I need. More than likely any other "established reputable" big box company is going to give me the same general number.

I'm fully aware that businesses have to make money and I've no problem with that at all. It makes the world go round. If this guy hadn't done a complete life 180 since my friend recommended him, my shit would be installed and humming along just like hers and 5 of her other friends currently are.

I'll ask this of you and JBraun, when your hvac companies started, were they as large and sucessful as they are now? I'll bet not, unless you started with a pile of money from somewhere else. Or, were there 1/2/3 guys and gals with trucks that got together and worked there ass off to build it larger? At that time were they incompetent idiots selling junk equipment? Probably not, so why does everybody else that's not a 40 truck business have to be?

 

We don't "look for margins." The margins come with parts sales and labor and build when you have happy customers who feel that they have been treated fairly and honestly. I talk to people often that say _____service costs too much for them. I can understand that in some cases and they are free to go elsewhere. I'm not going to demand they pay more.....Then again there are the cheap fuggers that assume the $25 they spent with you is funding your next exotic vacation of hookers-n-blow.

 

i don't own the business, just work for them. when i first started i often thought.. holy shit thats alot of money for what the equipment cost is, then as the years went by and i learned more about the business side i rethought that. You live and learn in the hvac business, quickly. i know we have. No one said that ALL of the fly by nighters are terrible, and i know a few that are pretty good to be honest. but even they will tell you that its not worth their time & many have quit doing it all together with the "sue happy" society we have now days. all it takes is one screw up and they're out big time. is it likely? no but i can and has happened.

 

Your question is invalid, because I never said a company had to be large to be great. Go back and read my post. I said that "there are honest and reputable companies on both ends of the spectrum". You ignored that and went on a tangent.

I'm done here, you obviously made a good decision to do business with the $1800 crook. It's not your fault he did a "life 180". Go ahead and find another cheap guy just like him, I'm sure it will work out better next time.

 

All of your info is invalid to me at this point as you come off as a butt-hurt sales guy that based your entire "blood boiling" rant on the fact that I didn't pay enough. If enough people shop around I guess it could put a dent in your year end bottom line numbers to make or break your decision to buy that $8000 Rolex? I guess I'd be all pissy too! Have a great one!