making a profit!

[george792]

Thanks for replies, spoken to tile giant and she said they could not give me anything back, it was very last minute speaking to them, customer met me there and got my discount which would have been a added extra but it's a full bathroom and should be happy with work, just got a voucher book from ctd may give them a try too thanks again all

 

[mikethetile]

the main thing is you got the job George, things will turn around again and this type of customer wont know whats hit them, Im looking forward to it but this year is going to be a tough one so it pays to give on this

 

[Spud]

Good luck to those tilers who pass their discount on to their customers but its not something I have done very often, I have only done this for very close friends or family members, If you pass you discount on the job actually costs you money to do since its your time and deisel going to collect the materials and your phone bill and time ordering them ,factor in your free estimate then you are well out of pocket,trade prices are for trade in my humble opinion

 

[mikethetile]

I know that commercial and domestic markets are different but im surprised that people are relying on trade discount for their profit or worse still to cover their off site costs

maybe im on a different page to others but the administration costs of my business are factored into my daily rate along with my profit

administration or housekeeping of the business includes time spent looking for work, site visits and collecting materials. this time has to be accounted for

trade discount shouldnt be factored in to this in case for some reason you dont get it,and as an additional income to the business you could use it win the work, another way I see it is if I pass it on I wont suffer tax on it either

maybe I have this wrong and should be cutting my rates to win work

 

[kilty55]

either way mike if you look at it this way its the samr hing your just setting your stall out differently

either cut your rates but dont give any discount on tiles

or keep your rates at the level you want but give the customer a discount on tiles....everyone likes to think they are getting a bargain

 

[mikethetile]

im not sure it is the same thing but I will wait and see before I say much more

ive got a bathroom to price floor and walls , havent met her yet but she as given me her address, shes getting 5 quotes not 3, I know from the address its an 18mm chipboard floor on a first floor bathroom, now if I do win the job Im not having her ringing me in 6 months telling me my work is shoddy and what am I going to do about the cracks accross her floor. so I either do it my way or not at all, so theres a good chance that my price is going to be lot higher anyway. is it the norm that the discount is used to reduce the labour element of the price

 

[kilty55]

heres an example of 2 different tilers currently trading and how they price,we know each other and trade in the same city/area

i generally give the labour price i want and dont really drop that unless i was totally desperate for work which thankfully hasnt happened for a while,im happy to give a big discount on my tiles i supply as the discount itself costs me nothing so in my mind im not losing out at all
i would hopwever prefer to take all the discount myself and make much more on the job but at the moment that doesnt work for me in the climate

the other tiler i know goes in with a low labour cost and he charges almost full pelt for his materials and tiles so makes a huge margin on them.....however in doing this his labour looks tiny compared to the material cost of the job and for me that way of pricing doesnt work

they are really the same as we both earn roughly the same from the job..its just a different way of getting the customer to take the price,i always try and push the fact they are saving loads of money by using me on tiles and it generally works

everyones different though so whatever works for you mike

 

[kilty55]

i see your point mike like you say shes getting 5 quotes so already inyour mind you think shes after the cheapest price.....you may well be right

you really just have to sound her out..find out ways of doing the room cheaper without affectiong your quality
you know the score

 

[kilty55]

just to add,if i took the pricing veiw of the other tiler who prices his labour low and say initially the customer wanted me to supply tiles....then at the last minuite they came back with b and q tiles that they saw when out im left doing a full bathroom for peanuts so if ind keeping my labour at what i want and the supplly cheaper than i cant lose out

 

[mikethetile]

were on the same page and I couldnt agree more

 

[Deleted member 1779]

The funny thing is that until a few years ago I never knew this practice existed. It was only when I went to Worlds End Tiles in London and had to BUY a customers tiles that I found out the installer gets cashback on clients tiles.

In my case the customer lived too far away to go and collect the tiles themselves. They agreed a price of £3000 for 37square meters of tiles and asked me to go to Worlds End to collect. Worlds End gave me one invoice for my customer and another one for me.

Incidently I had to pay for the customers tiles on MY OWN credit card because they refused to take money over the telephone from the client, they insisted a credit card holder had to be present for chip and pin. So in a way I was performing a service. I charged the client the normal collection rates and then gave the full cost invoice with £3000 on it. But of course my bill was 10% discount at £2700 so I made £300 on the deal.

The question that nagged me slightly was should I tell the customer about this? Should I share the saving 50/50 or should I just keep quiet and get on with it.

In the end I decided that it seems to be an accepted industry standard that the INSTALLER gets to keep any discounts not the client.

I dont think its confined to the tile industry.

 

[mikethetile]

just to make things clear im not saying you should pass discount on , im just saying you could in order to win the job

what I am saying though is that this discount shouldnt be your profit or part of your income to cover your time in collecting tiles etc, those costs should be covered anyway

the discount is between your supplier and you and shouldnt form part of the contract with your client, if you choose to use that discount to help you win the work then thats your perogative and should have no detrimental effect to your business

 

[Stewart]

I've worked very hard to establish myself with my suppliers to gain top discounts with them. I also try to supply most of my clients tiles as i see it as another revenue stream for my business. This is kept completely separate from the installation side of it when working out quotes. Customers can get some benefit of my discount if they choose, pay and collect the tiles themselves, but few rarely do.

 

[cornish_crofter]

Over the years I have tried various approaches.

I find that a profit on the materials plus a reasonable labour charge works well. On the handful of jobs I've agreed to charge cost I've included an element for running around, so I am not losing money on the job.

I was given a 50% discount off retail on floor tiles I laid. So the customer was charged the normal retail. They run a shop and mark all their stock up by 100% so I won't lose any sleep over that!

One customer, without permission, used MY name to get discount for wooden flooring. They knew I had an account with that supplier. I had arranged a discount at one branch, then they upset that branch by haggling, using my name then getting the other branch to match the price.

Result, the customer got what they wanted, but all my work to build up a good business relationship with the other branch was put in jeapordy. If they had just approached me and asked me to organise it for them I would have obliged.

I posted that experience on here - and was given some very good advice by Dan IIRC. His view was that Trade Discount is for the trade, not the customer.