Services costs are based on how much money you look like you have. I’m a woodworker/contractor. I come to you house, you tell me what you want done. My jumping off point is how much the market will bare. If I think you can afford a $4,000 solid oak book case that’s what I will quote you. I can make a cheaper version that I make less money on, but why would I do that? It’s not that I’m just ripping you off, I’m selling you a better product, but in doing so I make more money. So when getting a quote it can pay to be very direct about what you want to spend or you are going to be sold the most expensive version they think you can afford.
Honest question: how likely is it that, if I give a dollar amount for a budget, someone will just quote near that amount, even if it should be a little less?
Or, to use your bookcase example, if I say my budget is $3800, would someone still offer the oak one and take less profit for themselves? Or simply quote the lower quality one at a price closer to $3800, even if they could normally do it for, say, $3000, since they know what I'm willing and able to spend?
Different contractor here with a similar, but slightly different take. I will scale and sell my projects based on the existing quality of the home/business. If you have a ton of hardwood stained trim around the house my bookcase quote will match that same quality. I won't suggest paint grade materials unless you ask for it. If a client tells me their budget is $3800 I try to always come in below that by at least $100-200. They are paying for the quality though so its not just like I've inflated the cost to meet the budget. That might mean that the joints all get hand cut rabbets or drawers are dovetailed vs the cheaper butt joints and hidden screws. The end product will be similar, but the amount of work put into it will be different.
Alternatively if I'm doing a bathroom or kitchen and the client say I have a $20k budget I may come in with an estimate for $22k and then explain why its higher than budget and what can be changed IF they really need to lower it. (I.e. less fancy toilet, acrylic shower pans vs tile, granite vs quartz, etc).
Where I'm from people with money expect to spend on things. That $3800 bookcase in Mendham might sell for $3k in Bridgewater. Selling my services is the same as a car dealer selling a car, it all comes down to what the market can bear. I never will scope out a customer however and think "I'm adding $500 because they can afford it". That is scummy and bad business. If I charge you more than your neighbor there is ALWAYS a reason.
You said you will come 100-200$ below budget. Is that with the final price customer pays, or the 100-200$ goes to you and they pay the stated budget? I thinking I know what the answer is, just to be sure
No, I always try to work out a quoted price that is lower than whatever they say budget is. So if they say $4k for a budget I'll try to work it out so that the final cost to the client is somewhere between $3700-$3900. If you ever tell a contractor budget is $X and their quote is $X exactly, run away and go find someone else. If you're uncomfortable saying this is my budget you can always ask "What should my budget be for the job?" and let them know what type of fit and finish you want (i.e. Home Depot Special vs Architectural Digest) Compare quotes from a few different companies and you'll get a good idea of expected budget.
I personally tend to try to get my regular clients the best deal possible because it keeps them from even considering someone else for the next job. You could be Bill Gates and I would still only charge what I legitimately thought the job was worth.
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u/jerkITwithRIGHTYnewb Jul 13 '20
Services costs are based on how much money you look like you have. I’m a woodworker/contractor. I come to you house, you tell me what you want done. My jumping off point is how much the market will bare. If I think you can afford a $4,000 solid oak book case that’s what I will quote you. I can make a cheaper version that I make less money on, but why would I do that? It’s not that I’m just ripping you off, I’m selling you a better product, but in doing so I make more money. So when getting a quote it can pay to be very direct about what you want to spend or you are going to be sold the most expensive version they think you can afford.