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Charging Clients for Residential Products

If you are working on a custom residential project and you are buying fixtures and appliances for a client how would you charge a client. Would you:

1. Charge the full retail price even though you are buying it at the wholesale price.
2. Charge the client wholesale price.

 
Jan 25, 08 1:53 pm
evilplatypus

30%

but if you screw up ordering, you have to eat it.

Jan 25, 08 1:54 pm  · 
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strlt_typ

my boss charges 20% on top of the price, whether wholesale or retail...most of the time it's wholesale

Jan 25, 08 1:59 pm  · 
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liberty bell

My advice: Work hourly and don't buy anything.

Remember, if you screw up you can blow through 20% in a couple hours dealing with getting it fixed. I just specified something from a website that used a different nomenclature than the manufacturer for what constitutes "cabinet left". It took 3 hours of paper trail chasing and phone calls to sort out that it was the retailer's mistake. But now it will take two weeks - rushed - to get it replaced, and the countertop marble can't be templated, which means the slab guys have to make a second trip out just for to template the replacement cabinet, at $80/hour plus travel time, and the faucets can't be installed so there's another trip for the plumber, and the clients are pissed because the bathroom won't be done when they move in......

Luckily in my case the contractor actually ordered it, so I'm not only not losing money on the mistake but can bill for the time I spent figuring out what the mistake was. Not that I'm going to, in this case. "It all comes out in the wash" is one of my favorite sayings.

In short: We make better money and get better recommendations when we charge for our time and give the clients our full discount on materials.



Jan 25, 08 2:11 pm  · 
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strlt_typ

yes...one of the my boss' biggest complaints. he spends whole days sometimes chasing some weird hardware for a sink or shopping for door knobs, plumbing fixtures, etc...

Jan 25, 08 2:17 pm  · 
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mdler

why would you give your client a discount???

architects are dumb

Jan 25, 08 2:19 pm  · 
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SandRoad

Probably didn't necessarily help mleitner, but I'd completely agree with liberty bell...
Ordering/Purchasing seems simple enough, but what unbelievable messes are possible. Architects always think they are really great at everything, and although I really love that kind of enthusiasm, we're not!

Jan 25, 08 2:20 pm  · 
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evilplatypus

When I was in contracting - this why its much harder than what we architects do - I worked 12-14 hours a day. Accounting, reviewing bad drawings and most of all ordering, reordering, arguing and inspecting products. Its a nightmare made worse by the fact your responsible financially.

Jan 25, 08 2:20 pm  · 
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evilplatypus

I bet less than 5% of people on this board could order a bathroom sink and faucet correctly.

Jan 25, 08 2:21 pm  · 
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strlt_typ

the more custom the part is, the more you should be careful when ordering.

Jan 25, 08 2:22 pm  · 
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evilplatypus

its not just ordering - its inspecting what arrives - you get boxes and boxes of shit in the warehouse for a kitchen lets say, yopu send out your crew and 1 item missing from the job ticket creats chaos - its a nightmare - trust me

dammson - custom is true you have to be careful what you order but anything custom usually has a company rep deeply involved and I always got what i wanted - It was companies like KDA, Moen, Duravit that gave me panic attacks.

Jan 25, 08 2:29 pm  · 
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mleitner

Liberty:
From my experience it is tough to get out of the responsibility of ordering as an architect. You spec one thing, the client changes his mind, you call the contractor who is ordering and 6 weeks later, when the stupid thing ships from Europe, it's the architect's fault that it is wrong.
I agree one one thing: I do prefer the idea of billing for services relating to ordering and specing instead of just slapping a percentage on top of an order price.

Jan 25, 08 2:35 pm  · 
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evilplatypus

thats why design build is so much more effective in residential - the contractor is already doing it

Leaves the architect to design and lets the contractor deal with it.

Jan 25, 08 2:37 pm  · 
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strlt_typ

the problem is if you spent a full day chasing some custom screw in a sink strainer basket for the custom sink that the owner wanted, would you charge the client a full days worth of work on top of the 50 dollar screw?

Jan 25, 08 2:50 pm  · 
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strlt_typ
You spec one thing, the client changes his mind, you call the contractor who is ordering and 6 weeks later, when the stupid thing ships from Europe, it's the architect's fault that it is wrong

you show the client the drawings they signed.

Jan 25, 08 2:57 pm  · 
 · 

evilplatypus I would add that the 5% that can actually correctly spec & order are wise enough not to. I've been that route before - I wasn't freaked out by the inspection, but getting it right was a bitch. 3 hole faucets, at 4" with washer rings of 1/16" or greater with girth and back flow for non-standard outlet and trap - that is from an actual chicago faucet brochure. I'm still not sure what it means. And you are right, design build is that way to go...but is still filled with problems

Jan 25, 08 3:00 pm  · 
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snook_dude

My favorite client [not], called me from France one day and told me he was going to fax me a drawing of an antique Normandy Fireplace
mantel and surround. He wants to know is the thing going to fit in
the 1800's carriage house I'm working on for him. Five minutes later
the fax comes thru and everything is in metric so I'm scrambling to
do conversions and check my drawings against what is happening.
It doesn't work so I call him in France and say it is a problem, and he says, it is already purchased we will have to make it fit. Eight weeks later it shows up on the site and the mason has it laid out on the ground because it is several pieces of stone and yup the opening
is a couple of inches taller than the existing fire box. So the owner
tells the mason just cut some of it out of the middle, it will be fine.
I'm watching the mason with his crunchy golf cap in hand, working it over pretty good. He looks at the owner and says no way am I going
to take a masonry saw to something that old. We ended up notching the floor so the base actually sat 2" below the finished floor,
and the antique kept its value and owner and mason were both happy. Since that time my favorite [not] client has called me on several other items just like this where he buys them and I have to come up with a solution.

Jan 25, 08 3:27 pm  · 
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strlt_typ
Jan 25, 08 3:37 pm  · 
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mdler

i like ordering doors and windows for my asshole client

Jan 25, 08 4:25 pm  · 
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mleitner

evilplatypus, dammson,

When you said your firms charge 20-30% on top of purchased products list prices, do your firms also charge for time spent ordering or sorting out orders?

How do you bill the 20/30% charge. Separately showing surcharge for service/ordering or just a higher item price. Does the client see the surcharge on his bill or in your fee schedule? What do you do when the client comes in and tells yo he saw it somewhere else for less?

Jan 25, 08 5:09 pm  · 
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Appleseed

Bondo makes the world go 'round.

Jan 25, 08 5:13 pm  · 
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evilplatypus

no no - thats what we charged as a contractor - yes it included run around time - but you see thats what builders do. Architects really arent running around anyways - they produce at their desk drafting, designing more - its an unatural thing for them to do. plus as the GC im in contact every day w/ electrician, plumber etc - so I get help and insight and experiance with brands on a more solid level - Architects really shouldnt be burdened with this stuff

Jan 25, 08 5:33 pm  · 
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evilplatypus

I should add - the designer wholesaler model is from an era way way back when products were much much simpler and not as varied.

Jan 25, 08 5:34 pm  · 
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mdler

evil

architects spend time on the phone hunting down products. My boss spent a week trying to get my client a deal on some plastic. By the time he found the stuff for cheap, he more than made up for the savings in time spent on the phone.

Spend $2 to save $1

Jan 25, 08 5:44 pm  · 
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strlt_typ

in our case, the 20% is the total fee to get a product ordered, delivered, correct problems, etc. (or general contracting fee). the time spent on the selection of a product usually within the design development phase is charged as a design fee however.

our fee schedule given to the client during the interview lists the mark up percentages for both design fee and general contracting fee so the client already knows that a bill for such and such products are already marked up. we don't show the fee as a separate surcharge rather an itemization and a bottom line.

we've had clients, during the last leg of the construction phase, wanting to save money and in order to avoid the 20%, shopped for their own door knobs, fixtures, whatever...the problem was my boss ended up still spending time with the products the clients purchased. when problems came up with the clients' purchases, my boss would've loved to say "you deal with that"...but not everything is isolated like that.

Jan 25, 08 5:50 pm  · 
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strlt_typ

snook_dude's story is perfect: client orders something without knowing what the installation of it entails, then snook had to get the mason involved or the floor guy. all of it is interdependent.

Jan 25, 08 5:58 pm  · 
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evilplatypus

thats why you need a good builder -

Jan 25, 08 5:58 pm  · 
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mleitner

evil, dammson, thanks for the responses.

And I always thought there must be a clear and simple solution to this issue. I guess it all starts with a sound paper trail.

I did hear that interior designers make a lot of their revenue selling products. Can anyone confirm this?

Jan 25, 08 5:58 pm  · 
 · 
mdler

mleitner

interior designers get furniture at an industry discount and then jack the prices. This is how they make their money. this is also why they dont shop at DWR

Jan 25, 08 6:00 pm  · 
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strlt_typ
I guess it all starts with a sound paper trail.


SK drawings

Jan 25, 08 6:09 pm  · 
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rfuller

Hah. We've got two purchasing nightmares right now at work. (I work for a builder.) Last weekend the roofers put up half a 6/12 roof on a 5200 sf Parade house. Monday morning the client shows up to look at it, and its the wrong color. My boss eats $50k. It'll be 2 more weeks before the right roof can be rushed to us. Parade is in June. Project on stand still until roof arrives.

Also, always make sure custom sinks come out of the same lot. We've got a client who's been in their home for 3 months. The "right" sink came in on friday. Yesterday when I delivered it and unboxed it, the colors didn't match. Two more sinks ordered out of new lot. 3 more months. $20k.

We've eaten $70k in the past week alone. Last year they ate over 1m. There's lots of potential for financial heartache even if you're careful. Get your clients to buy. If you can't charge 20-30 on whatever you can get it at.

-My 2 cents.

Jan 29, 08 1:27 pm  · 
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evilplatypus

As contractors we refused to accept products and materials ordered by interior designers or architects because they usually were ordered by some person in 5 min flipping through a catalouge not knowing what the f*ck theyre looking at, missing pieses and accessories, not fitting plumbing fixtures and faucets to templates correctly it goes on and on - so we refused. They can tell us what they want we'll order it, GURANTEE it and eat if need be.

Your designer 9 times out of 10 goes and shits in the woods.

Jan 29, 08 2:15 pm  · 
 · 
mdler

rfuller

I was in a parade

Jan 29, 08 7:40 pm  · 
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