Two Plumbing Rate Philosophies and Why We Charge Like We Do

PLUMBING PRICING

In most industries, there is more than one way to handle pricing. Plumbing is no exception. We wanted to address the differences to help with better understanding and decision making.

PLUMBING HOURLY VS. PER PROJECT

Some plumbing companies choose to charge “labor plus parts”. This means the technician begins work and when he is done, issues a bill for his hourly rate, parts and usually some sort of truck or service call charge.

Pro: There are no “hidden costs” as you know exactly how many hours he billed for, how much parts were, plus anything additional per line item.

Con: A faster and/or more experienced plumber could charge the customer less than a slower and/or newer plumber. The customer could be concerned about how much time is being added up, especially when considering trips to the hardware store, or phone calls from the office, which are out of the customer’s control.

Other plumbing companies, such as Sunshine Home Services, choose to charge “per project” pricing. This is when a quote is provided up front for the customer to see. It accounts for all parts, labor, taxes, and any service call charges.

Pro: The customer knows what to expect up-front to decide if the value is there or not. They can practically “write the check”. There isn’t a concern about additional charges to pick up parts or wondering if the plumber is “milking the clock”.

Con: Pricing isn’t broken down by line items, so customer isn’t 100% sure how the expenses break down.

WHY DOES A PLUMBING COMPANY CHOOSE ONE OVER THE OTHER?

There are a few benefits on the company side for choosing per project pricing.

1. Customer service is uniform and fair. Ms. Jones with a water heater will be charged the same whether Joe is fast or having a bit of an off day. Additionally, Ms. Jones will pay the same price for the same service as Mr. Williams. Per project pricing allows customers to be treated the same.
2. Performance standards. If Joe takes 3 hours on the same job that Tom takes 4 hours on, management can see a clear apples to apples comparison of technician performance. This is helpful in training. All plumbers are subject to licensing which requires a log of hours for different type of work. Seeing each job as a “unit” rather than as hours, keeps the logs accurate and not favoring someone who performs less efficiently.
3. Profits. When a job is created as a per project rate, each item is calculated into the cost. This allows the management to more easily track profit and remit tax. For example, Project ‘Water Heater 30’ includes 2 supply lines, a 50 gallon gas water heater, an expansion tank and four bolts. This project is set at a specific price so every time it is sold, it is know how much profit, and how much in taxes, needs to be remitted. In the other pricing plan, additional accounting is required to separate those items out on every job. This can lead to more expense to the customer, which is typically passed on in “First hour” and/or “Truck or Service Call” charges.

Whether you prefer to know each item line by line, or would rather know the price up-front, is simply a personal preference. When hiring a plumber, ask how they bill and ask about additional charges that may apply.

If you are in the Greater Denver Area and are in need of plumbing, heating or air conditioning service and like the idea of up-front pricing, give Sunshine Home Services a call at 303-459-5469.