The high price of cheap labor (Howe, Mart: sales, real estate, how much)

[Reallybigshoe]

I think I just let someone have it on another thread without meaning to. As many of you know, I'm a landscaping contractor. This guy was asking how to get the cheapest deck built. I went through a lengthy explanation of the high price of cheap labor in terms of quality, economics, etc.

I know that when a customer pushes me to lower my price beyond what is fair, I have often had to tell them no. Usually in this case my price is beat by a fly-by-night 'company' nobody has heard of. Generally what happens next is that I am called back around 6-8 months later to repair the incompetence. I quote the person more than the difference in my original price vs. what they paid for the fly-by-nighter, and in the end both I and the customer loses because I am out the real job and they are out a lot of money.

So here's my question: Which is preferable to residents here - cheap, quick fix or fair 'done right the first time'?

I'd like some honest opinions on why the craigslist contractors continue to get rich quick by being ridiculously cheap in their materials and labor. People must realize that if they are being cheap hiring, the contractor is being cheap in their work?

Look at KB homes. They are getting sued again. Didn't the consumers realize that by hiring the builder that was undercutting everyone on the market they were asking for trouble? Come on.

[scuba steve]

My vote goes to 'good.' I do almost everything myself, and know the value in not having to do it twice or go back and fix it later.

Same attitude I have as somebody that works in aerospace. I'll take 'good' over 'cheap' any day.

[kevcrawford]

Your job is built on repeat business and referrals. While some may want to go the cheap route, the ones that want the quality will be the ones that tend to refer you to friends more, and the ones that tend to hire you for other work.

Quantity may get you a little more work now, but quality will keep you in business a lot longer.

[LindaGrace]

When it comes to building/repairing a house or other structure, of course I go with GOOD (high quality) over CHEAP. However, for other things - like shoes and purses, things I want a ton of, with a big variety - I go with cheap.

[Chaka]

We are restoring an old house so we have dealt with this issue A LOT. Initially we tried to go cheap - and help out an acquaintance. We learned from our mistakes and now don't necessarily go with the cheapest.

Now, a lot of things we do ourselves, but we've also learned our own limitations and hire out for those things we recognise as either beyond our abilities or beyond our timelime.

For most of our recent larger projects where we've had to hire, we've been working with one contractor who also happens to be a friend, but has an established well recognised business and a very good record. Knowing our financial limitations, he works with us. He doesn't cut corners, instead, he works with our budget. That may mean there are some things he doesn't do, instead, leaving it to us to finish, which he is ok with. Examples: he did the foundation, we did the skirting. He did the exterior house painting (including caulking/sealing/scraping etc), we did the trims, He did the structural elements of our porch restoration, we are doing the aesthetic elements. I think we're going to have him do the sheetrock/tape/float in our next room because it's a PITA and takes DH a long time, but we'll do the windows and trims (also a PITA but DH prefers to work on these himself). Our roof, we hired out completely - the best contractor to work with was also the cheapest. And by "he" I mean his company, the contractor actually does very little work himself, but is there daily directing his guys

The reality for us is we can only spend so much, so while we're willing to pay for quality, we do have an upper limit. He's smart enough to work with that. It's been an ideal working relationship - we get high quality work, focused on the areas where we really need the help, but stay well within our budget.

btw - landscaping is something I do myself. It may not win any awards, but paying for it is a luxury so not an option now (with the exception of tree trimming - lots of 20-30ft trees not touched for 30+ years required work, I wasn't going to tackle that and wasn't going to go with a guy with a chainsaw. I wanted someone who was licensed, bonded, and knew what they were doing, so I paid a lot for it once. Yearly upkeep, though, I will probably go a bit cheaper)

in Sum: Quality comes first, but cost is a factor.

[jules07]

Heh! You have hit on one of my (many!) soapbox issues!!! I think the real issue is that people just don't want to pay for "service". Doesn't seem to matter what type of service business it is, but I truly believe that the majority of people who don't work in the service-based industry just don't "get it". Example that I've given here before ~ my folks owned and ran a jewelry store when I was growing up. Their main focus was custom jewelry and repairs. People would come in all the time and want a break down of what a piece of jewelry they wanted made would cost (ie ~ how much for the diamonds, how much for the gold, etc.). But then when it came to the "labor" charge they'd get all pissy and act like my dad was "ripping them off" because how dare he charge them for his time! Many times he'd have to "gently" remind them that EVERYONE charges for their time by saying something like "Well, Mr. Bank Executive, how about next week you go in to work all week for FREE? Because you know, you're ripping off your employer by asking him to pay you for your labor."

Second thing ~ most people look for a job where they'll be paid the highest amount possible for their qualifications, correct? But then when they go to hire someone (whether it be a landscaper, or a hairdresser, or a plumber, or a Real Estate agent, or a lawyer, or a jewelry designer, or .......) they want to low-ball them! As a general indication of how society is (and honestly, I think here in SA it's pretty rampant) just look at how many threads get started here that say something to the effect of "Any recommendations for XYZ business - CHEAP".

Bottom line to my point/soapbox ~ a LOT of people aren't willing to pay other people for their time but you sure as $hit better not ask them to work for free/reduced rate!


(edit ~ and UGH!!! Thanx to your "status" line, I can NOT stop craving a FISH fry and cold beer on a Friday night! Thanx alot! LOL!!)

[dmarie123]

ReallyBigShoe,

Awhile ago I posted on CD asking about contractors to move a 3 foot section of fence. There was a fence, parallel along the side of my house. Inbetween the fence and the house there was a 3 foot section, like where a gate would be, but no gate. It was all the way to the back of my house. I wanted it moved up to be flush with the front of the fence... if that makes any sense at all.

I sent actual pictures with diagrams of where the 3 foot section was already constructed, and where it needed to be moved to.

All I wanted was a new post sunk on one side (the other side had a post already) and the fence just moved. I was qouted $350, $425, and $500.

Then one day I saw a guy with a big truck moving one of my neighboors fences. I asked him how much he would charge me to move mine. FIFTY DOLLARS!

He did the job in about 2 hours, and it was so simple that I don't think I needed to spend SIX to EIGHT times the amount of money.

[deek102]

My two cents...

Whenever someone quotes me a price I always think I'm getting ripped off. I always want it lower. I think that's typical of most consumers. The burden is on the seller, be it a salesman or contractor, to show me that the price they quoted me is fair for both of us. Prove you're worth what you charge.

Everyone wants to pay as little as possible.. otherwise Wal-Mart wouldn't be the largest retailer in the country

[deek102]

Originally Posted by dmarie123

ReallyBigShoe,

Awhile ago I posted on CD asking about contractors to move a 3 foot section of fence. There was a fence, parallel along the side of my house. Inbetween the fence and the house there was a 3 foot section, like where a gate would be, but no gate. It was all the way to the back of my house. I wanted it moved up to be flush with the front of the fence... if that makes any sense at all.

I sent actual pictures with diagrams of where the 3 foot section was already constructed, and where it needed to be moved to.

All I wanted was a new post sunk on one side (the other side had a post already) and the fence just moved. I was qouted $350, $425, and $500.

Then one day I saw a guy with a big truck moving one of my neighboors fences. I asked him how much he would charge me to move mine. FIFTY DOLLARS!

He did the job in about 2 hours, and it was so simple that I don't think I needed to spend SIX to EIGHT times the amount of money.

Sounds like you did everything but the manual labor! But it wasn't something you could do yourself?

I want an update on your post in 12, 24, and 36 months so you can let us know if your fence is still standing! Then we'll be able to determine cost/value

[deek102]

3 in a row, woo hoo!

I was trying to locate the name of a book that was recommended to me (I have not read it yet) on this subject:

Amazon.com: How to Sell at Margins Higher Than Your Competitors : Winning Every Sale at Full Price, Rate, or Fee: Lawrence L. Steinmetz, William T. Brooks: Books

In How to Sell at Margins Higher Than Your Competitors, sales gurus Lawrence Steinmetz, PhD, and William Brooks show you how to stop racing your competitors to bankruptcy court and start selling at prices that actually earn you a profit. They explain that business is a game of margins, not volume, and that competing on price might be a surefire way to increase your sales—but it will run your business into the ground.