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Author Topic: Pricing, how do you base your system?  (Read 433 times)

Offline nolazach

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  • Member Since: Sep 2011
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Pricing, how do you base your system?
« on: October 07, 2013, 12:46:21 PM »
I work in a lot of lower income areas, and being New Orleans we have really low property values and low average wages.   
   So I think I probably charge a lot less than many here.
 
I worked with a company that charged between $85-120 for a service call, then billed at $65 an hour, then 200-1000% markup on parts.


(like gas coils $5 would charge $50 for the parts) 




   I tend to be a lot cheaper.  I generally charge $40 for a service fee, but apply that towards my labor charges.  I also charge $50/hr labor.  Then mark up parts on a sliding scale based on how hard part is to source/install.  I make more on switches than control boards, that's for sure.


    So I have had total repairs done for $60 before, that is usually my cheapest.   I just don't feel the need to charge $120 to change a dryer belt.  I get a lot of you guys are in the northwest and west coast where you have to make well over $100k a year to get by.  But I just like my niche as a lower cost alternative. 


  I have only been in business since 2009, and like others I want to grow and maximize profits.  So that of course entails a gradual increase in service fees and charges.


  I'm just worried that if I start charging $65-70 just to come out, they would balk at that.


  I work out of my house,  own my truck outright and have little debt.   Then another issue is the Craigslist advertisers doing jobs for $20 &25 service calls. 
     It's hard to get your name out there without internet advertising, which I have just started doing.  But it gets pricey.


I'm thinking I need more structure to my pricing, but I still want to stay south of $100 on service fees for a less than an hour job.

Offline Patricio

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  • Member Since: Aug 2011
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  • Tight Lines
Re: Pricing, how do you base your system?
« Reply #1 on: October 07, 2013, 08:30:49 PM »
Here is my input at doing a business.  You have start on the higher side than lower.  It is easier to drop a little than it is to raise.   & if you have to raise your prices do it very moderately & explain to existing customers why you have to raise, ie. insurance costs, cost of living, etc.   New customers, they don't know what you charge.

I live in a poor income area also, & there are plenty well to do out here also.  I am not bilking anybody, just trying to make a decent living so I use the blue book.  I have lost some potential customers cause they wanted cheaper, that is what craigs list is for.   I have a philosophy 'You get what You pay for'.    You want cheap that is what you get.   No extra service,  no warranty,  no professionalism,  no nothing.  I'm am proud of my professionalism, so are my paying customers, in fact they refer me quite often.   That is what makes my business grow.
Great Old Fashion Hometown Service

Offline wildimaginations

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  • Member Since: Jul 2011
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Re: Pricing, how do you base your system?
« Reply #2 on: October 07, 2013, 09:27:22 PM »
You will not do well if you keep your prices so low. 

But if you like doing charity work, then go for it.
Appliance Service Technician
Authorized servicer on LG appliances.
About 45 mins east of San Francisco

Offline AdirondackBob

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  • Member Since: Oct 2010
  • Posts: 80
  • Country: us
    • North Country Appliance Repair
Re: Pricing, how do you base your system?
« Reply #3 on: October 07, 2013, 09:49:19 PM »
I am struggling with prices also. I have the Blue Book, but seems too pricey. I have read that Service Call/ $$ Per Hour is unfair to customer and Service Company. Not sure which way to turn. A new year is fast approaching and it is a good time to re-structure the rates. Please, Please everyone chime in and list their rates and maybe examples? I understand that where you live makes a huge difference.

Thank You, Bob

Offline nolazach

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  • Member Since: Sep 2011
  • Posts: 406
Re: Pricing, how do you base your system?
« Reply #4 on: October 07, 2013, 10:17:48 PM »
You will not do well if you keep your prices so low. 

But if you like doing charity work, then go for it.

my neighbor works for one of the bigger appliance repair companies in our area.  Even with our prices I make a good bit more than him.  I don't see it as charity, just that the industry may be charging too much.  I mean 1000% mark-up on parts?

Offline nolazach

  • Technician
  • Member Since: Sep 2011
  • Posts: 406
Re: Pricing, how do you base your system?
« Reply #5 on: October 07, 2013, 10:20:38 PM »
I am struggling with prices also. I have the Blue Book, but seems too pricey. I have read that Service Call/ $$ Per Hour is unfair to customer and Service Company. Not sure which way to turn. A new year is fast approaching and it is a good time to re-structure the rates. Please, Please everyone chime in and list their rates and maybe examples? I understand that where you live makes a huge difference.

Thank You, Bob

What is the average per job price?  Gross and net?

  I easily get five jobs a day,  I am very happy with $300 in a day.  I have no employees and little bills.  Even $200 a day is okay.  I mean $52k a year ain't bad.   If they want to pay big bucks they will call Sears/AE or Dial One.     

Offline appltech

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  • Member Since: Feb 2013
  • Posts: 42
  • Country: us
    • Appliance Technology
Re: Pricing, how do you base your system?
« Reply #6 on: October 07, 2013, 10:24:45 PM »
I don't care what system you use...if you aren't reviewing your numbers, you're likely either shooting yourself in the foot or cheating your customers. I'd suggest reviewing performance numbers 2-4 times per year. As you know as a business owner, costs constantly fluctuate. Crunching and analyzing numbers is much easier for a single-technician business than a larger business.

I was against flat rate pricing until I noticed the variances between myself and another tech. The biggest difference between techs being time to diagnose and time to perform the repair.

We have been using a hybrid pricing system for a few years now, and we'll be going full flat rate beginning next year.

Hope this helps!


Sent from my iPhone using Tapatalk - now Free

Offline theoldstoveguy

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Re: Pricing, how do you base your system?
« Reply #7 on: October 08, 2013, 09:42:04 AM »
I have purchased a blue book and can't believe half the charges, maybe because I am fast and with 35+ years in the business know a little. I can't see charging so much for a lid switch change on a Whirlpool washer that takes 15 minutes to do. Less than 5 to diagnose. I have upped my basic call to a $65.00 trip and then $18.00 for every 15 minutes ($83.00 to show up and includes 15). I am still cheapest in area. I just did a burned wire on a double wall oven. They wanted a charge of $161.50 plus parts. I did the job in 25 minutes ( no pulling oven ) and charged $101.00. Maybe I should go blue book and discount 10-20% ?

Offline LowSL2

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Re: Pricing, how do you base your system?
« Reply #8 on: October 08, 2013, 09:49:07 AM »
To fix a lid switch $ears charges $144 labor plus parts. People get kind of annoyed when I'm done in 15 minutes.

$ears just started charging $20 more for drain pump job codes on LG, Samsung and Electrolux washers since you have to disassemble half the washer to get to the pump. $162 labor plus parts.
LowSL2
15 Years of Professional Appliance Repair Experience

Offline nolazach

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  • Member Since: Sep 2011
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Re: Pricing, how do you base your system?
« Reply #9 on: October 08, 2013, 11:58:58 AM »
To fix a lid switch $ears charges $144 labor plus parts. People get kind of annoyed when I'm done in 15 minutes.



It's just too easy of a job for me to charge that much.  Plus in my service area I am never further than 20 minutes away from a job, so I don't have to travel as much.  But a Lid switch...  I have done them for $70 before. 

 

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