Should I Break a Large Bid into Pieces for a Customer?
Most cabinetmakers aren't willing to itemize cost estimates. Here, forum contributors explain why. February 6, 2007
Question
We presented a quote to a customer this week for a kitchen, master and hall bath cabinets, entertainment center, and two fireplaces. The quote was presented in a lot total. The customer is asking for a breakdown by section to include labor. I think we could successfully break the quote down by item, but I am not comfortable breaking down the labor, etc.
In addition, we are quoting the lot job. If the customer wants to pull out the kitchen, for example, because he can get it done cheaper somewhere else, then the remaining items have to be re-quoted.
How have you all handled customers like this in the past? This is the first time we have had a customer to request this level of breakdown.
Forum Responses
(Business and Management Forum)
From contributor A:
If you're not comfortable breaking it down, just don't do it. Let your customer know the price you gave him was assuming all work to be done at once. If they want to do one thing at a time, it would cost more. That is very typical. First you'll quote a huge job so they can get a better price, then they start trimming it and expect item pricing to remain the same. When we smell this happening, we just tell the customer we are too busy and no longer interested in the job.
From contributor T:
If you want to break it down for them, just make sure that the sum of the parts is higher than the total package.
From contributor J:
One thing I do when bidding multiple parts or jobs to one client, is quote them separately. Each one for it's full price if built individually, of course. Then at the end of the quote, I will include a discount of X% if they do the whole package. This way they feel as though they are getting a discount for giving me more work, instead of me adding money if I get less work.
From contributor C:
First off, what you charge for labor is none of their business. You're not in the auto repair business. Second, this type of client has always turned out to be nothing more than a pain for me. You'll spend way too much time putting the pacifier back in their mouths, even if you do get paid what was agreed upon. I wouldn't even give them the courtesy of a return call. If they called back, I would tell them bluntly, "I am not interested in working for you, have a good day."
From contributor H:
Do not itemize your labor! What you're making is none of the client's business. Do not allow them to cherry pick your contract.
From contributor R:
I always specify in my bids that if you feel the need to break the package apart, it's 35% more across the board. And I don't break out labor.
From contributor S:
Why is it that everyone is so willing to do a project for time and materials, which in my view is almost a license to steal, but at the same time on a bid project, you feel it's none of the customer's business what the labor cost is? Does the customer not know the labor charge by deducting the materials from the total bill?
I break it down if asked. You can make figures say anything you like. If the project is over budget, they are smart enough to know that the labor will remain pretty much constant, while a change in species of wood can make a difference. If the intent is to chisel down the price, have the guts to stick to your price and decline to negotiate the price. If you are giving them an honest quote, it will all work out.
I always try to remember that there are 120 other cabinetmakers in the phonebook. I am sure the potential customer knows that too. I often wonder why there is so much high and mighty talk about what "we" will and won't do for a client to get their business, yet there are an equal number of posts about jobs we can't collect for, equipment about to be repo'ed because we can't pay the tab, and jobs we can't make any money on. When I started in business, a mentor told me to always remember that "the ass you kiss Monday through Friday is also the wallet that puts fuel in your boat on the weekend... he just doesn't know it." I will generally jump through whatever hoops they want to get a job if I want it. If I don't want it, I don't even return the call. Usually we can buy supplies so much cheaper than the customer can find in his shopping that the labor issue will go away anyways.
From contributor V:
We show each individual item as a total and then a total project cost that is lower than the sum of its parts. That way, if they want to pick out or kick out items, the price is different. I don't break down items into labor, materials, etc. What purpose could a client have that could be reasonable? Unlike mechanics, we don't go by a book that tells us how long a job will take; we figure it into the total and if we are wrong, we eat it.
As to the time and materials comment... When we do a job for time and materials, it's plus a percentage and in doing the job this way, if the material cost is more, we are not eating it - they are. Just like the time to do a job - if it takes longer, we don't eat it - they do. That's why very few clients want you doing work on a large scale on that basis. They don't trust. Smaller jobs work fine that way.
From contributor W:
There are many experienced posts here, thanks to everyone. The conversation you have after your customer requests this breakdown is the single most important one you will have with them. This is where you point out all the positive factors of linking all the units together in one estimate. If they are to be estimated separately, the total will be considerably higher. That is just a simple fact of business and undisputable. There are duplications of overhead which are going to be on each separate item, as well as starting and stopping, separate installations, etc. You have to assume that any one item can be purchased without the others and will be a viable, profitable job by itself. If you divide your number by your educated breakdown and present it to him, he then is affecting your pricing and profit, if any. I learned this lesson the hard way a long time ago.
From contributor V:
What I hate is when they accept the bulk bid and then try to cut stuff out later.
