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Im having a little trouble at the moment pricing spares and finished goods and service calls and am wondering if anyone out there could shed some light on these issues for me. Im a sole trader currently providing a call out kitchen appliance repair service. I am also in the process of setting up a “just off high street” repair and sales centre. I work hard and I always have the customers best interest at heart and this will allways be the case as it is ingrained in me. The difficulty for me at the moment is how to factor my integrity into profit margins. There are obviously situations where I can extract a lot of profit for little work but I do not feel comfortable with this approach. Its not right to subsidise the many with the profit paying few. I would ideally like to reach a point where I can have a formula for profit across all mediums ( repair, sales of spares. sales of finished goods ). The reason I ask the question in the first place is that I am horrible at math and some what of an idealist. A recipe for disaster in business I know but Im hopeing that at some point ill be able to marry customer needs and my profit taking needs together in a fair and sustainable way for both parties.
Re: How much is enough?
My old boss at Lux in the earlt seventies always told me I was too customer conscious,40 years later I still have an issue with this but not so bad now,battle hardened perhaps.
He also said that if a cusomer ever says “that was cheap” consider that one a missed opportunity,easy in hindsight but it’s difficult to stick to a mark up across the board.Ok on new goods possibly but appliance spares differentiate too much in price,and yes some do subsidise others but thats true of life in general.
If in doubt about a spare part price have a look on espares,partmaster and on this site and strike a balance.
You obviously aren’t going to be too avaricious if you are already considering business and customers in this way,you will harden off a bit in time and as for integrity if you have it, it will always be there,sometimes more prominantly than others.
You can’t please everyone 🙂Re: How much is enough?
One of the easiest ways to check your prices is to do some research into what your local competitors are charging, just call around with an obvious fault like a fan element replacement and ask for some idea of the cost.
As far as new appliances go you will have the problem of Internet and Shed prices to compete with, but you can always put your own 3 year warranty on the appliance and offer delivery installation as well as this is normally extra to Internet and Shed prices, its very hard to define a certain profit margin across the board but you do need to know exactly how much your business costs are including your wages to even start to figure out how much to charge.
You will get hardened to it in time, being customer orientated is not a bad thing but you do need to make a profit, my golden rule is never under sell yourself, dont be afraid to charge what your services are worth.
There are many threads on UKW on this subject and in the downloads is a good profit and loss form that Ken put on, worth checking it out.
Good luck in the future 🙂
Re: How much is enough?
Espares are a good guide in some cases but not this one 😳
http://www.espares.co.uk/part/washing-m … embly.html
Looks like a £5.00 reverse terminal Plaset pump to me, this trade is a nightmare on pricing.Graham
Re: How much is enough?
Better to charge a little bit too much than a little bit too little. You can always find a way to give it back if you’ve got too much. 😀 Doesn’t help anybody if your business goes to the wall by undercharging.
Mike.Re: How much is enough?
Did you do a Profit and Loss costing when you set up the business ?
Its usually a good idea as this will explain not only to a bank, but also to yourselve if the business is viable.
Your costs should cover your expenses and then a profit in which to be able to re invest and live on.
There is no point charging without knowing if your making money. After all its a 2 way relationship, your both get something out of it.
Pricing yourself in relation to your competition is one way to judge, having said that if the comp is an idiot charging little, why should a well qualified experienced tech do that.
You also don`t want to over price yourselve out of any calls. Initially you`ll need to build up a client base and get a good reputation, this does not come on price alone.
I always judge on my cost`s within the business plan, took an average of what i need to be profitable and always follow that, judge the call by the type of client etc, but don`t charge different prices too much, try to keep a balance.
Re: How much is enough?
the best way i find is to have prices and stick to them (labour+retailprice of part=job done) on new appliances i sell i generally use £50 mark up as a rough margin to work with on free standing and a bit more on built in plus fitting.If they ask me to price match i advise them they are getting fast service same/next day delivery free fitting and removal of machine and rubbish so they have no hassle at all.
cheers chris
Re: How much is enough?
You should never feel guilty about cost`s, if its over the top chances are the client won`t have it done or you`ll get hassle.
If your charging £50.00 for 45 minutes, then be there 45 minutes.
If your charging £50.00 and your only working 10 minutes, your client will point out that mistake.
Certain top end stores sell cloths made in the far east, by children on very little wages, they sell there company as being green and helping the global community by cutting damaging waste etc etc.
Yet there mark up is in the clouds and they still can`t make a profit.
Another high street shop buys cloths sourced around the world, sells at a far lower retail price, doesn`t exploit or push how eco freindly they are and are making greater profits.
Its basic, source stock at reasonable price and provide the service that suits both you and the client, if you follow the top end too much because your greedy or your business isn`t profitable, you`ll just be delying the inevitable outcome.
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