We run into the same thing in my business. Its hard to compete with a guy who operates out of the back of his truck, doesn't have insurance or an office. I run into people all the time who just don't understand overhead.

if the fed's would make companies tax rates double, for making over 30% profit. It would stop a lot of the price gouging and probably increase workers wages too.

I don't think he wanted to tell me outright to buy another system and I can understand why. What I don't get is the markup in parts. I worked for a company and had to price out parts and it was ridiculous what I had to charge people for a Smoke Detector, we paid 35.00 and charged service contract customers 100.00, non-contract we charged 150.00, now before I get flamed I understand profit and overhead but if the capacitor cost you 20.00 and you marked it up to 139.00 you are making some serious profit on that one component and it makes me wonder what kind of markup is on the coils, again I don't mind paying for quality but there needs to be reasonable markup.

Get you a home warranty. I use American Home Shield and have had good service out of them. Had my air handler replaced a few months ago and it cost me $65.

I fully understand complaining about prices. And I'm probably the first one who will try any job around the house. But those licensed contractors have alot more to pay than what your looking at. They have equipment/tools, vehicles, maintenance on those vehicles, expertise, probably continuing education requirements, licenses, business license and fees, taxes, insurance, employees, taxes related to employees, employees insurance in some cases, CPA/accountant, advertising, government regulations, etc. So yeah, the capacitor may cost only $15.00 for the part alone..but for them to be able to come out and replace it professionally and correctly...you need to factor all those other costs in as well.



I kicked them to the curb. They were going to take 2 weeks to fix my hot water heater. I have a wife and 2 kids. That wasn't going to happen. I told them I would replace it and if they would reimburse me for the hot water heater. They said yes. WELL....I'm still waiting on the check.

The guy that sells the part for 15 bucks has all those expenses for his business as well.

Yeah, and how many of those $15 parts does he sell a year? I'm sure he's also selling other electrical parts that are supported by other licensed contractors (electricians, HVAC, Home builders, etc). You missed the point. You have to take the business cost as a whole. You can't price a service based on the part alone.

I am not missing the point. It's dishonest to mark up a part to that degree. They do it because most people don't know what the part costs and it looks a lot better on the bill than that extra hundred bucks would look if they added it to labor or overhead where it belongs. I mark up materials 10 to 15 percent to account for my time but I can't hide my costs because anyone can go to home Depot and see what a 2x4 costs. I price my labor honestly where people can see it and make no excuses about it.

So you'd charge $15 for the part...and $2.25 (15%) for labor?? I'm sure you'd charge more than $17.25 to come out to someone's house and replace a capacitor. It'd take you atleast an hour to go out...not counting the fuel cost as well. The only way I'd see a $17.25 charge for that job is on the hope of something larger.

You may be an individual contractor...but if your running a larger business... you must take into account those other costs. If not, I don't see how'd you'd stay in business.

No, I would charge a labor price to cover my labor and mark up materials 10 to 15 percent to cover my time and trouble picking up materials. If I come out to your house to put on a new doorknob that cost 10 dollars I am not going to bill you 150 dollars for it just so I can bill you 50 bucks for labor and look like I am cutting you a deal. I will bill you my labor rate to include my time picking up parts and add a couple bucks on to the doorknob.

Dang fellas after reading this it makes me even more thankful that I use the heating and cooling service that I use here in Albertville.

Ok
You may have found a 15.00 capacitor but they are cheap and we can buy some for 3.25. They are junk, come from Mexico and fail regularly in new units. We have capacitors that cost us 55.00 that have 5 year warranty. We don't control pricing of parts or the part you found on the Internet. But if you buy a coke at a corner market for 1.69 what do you think it cost them?
We use a standard baseline mark up and treat everyone with respect and fairness. To say the industry is rigged is just like the post with the new Duramax on the lift at 15k, you have NO idea what it cost to operate a business!
In the HVAC industry we compete with Bubba and a Truck, Call him when it is 95 degrees to come back and put that 13.00 a lb freon in your system. If he answers the phone, good for you.
It is coming to a point where you just think you know what is happening in the Quality tech service industry.....who do you know that is pursuing a future in plumbing, electricial or HVAC industry?
What do you think it going to cost you to call and get someone to drive to your house in 5 years due to the reduced number of techs? Don't count on getting it done that day if you are not a regular customer that has a service agreement to check the mechanical systems twice a year like you should.
The new equipment is getting much more complicated and the industry is taking the easy stuff out and building in proprietary parts that you can only get from their distributor.
Enjoy your day and make sure you treat your HVAC system like you do your truck and it may last you 15 years.
Rant over!

Out of Curiosity, Who do you use. A good buddy of mine and his dad have a company in your neck of the woods.

Johnny Morrow Morrow heating and cooling.Great guy and always great service.He is fair priced and from the sounds of it alot better priced than most.

No kidding on that. I think it's already happening. Luckily our service department has been together 6years with some great techs. I was talking to one of our competitors owners a few months ago when I ran into him and he told me straight up he couldn't find anyone worth a dang and had been through hiring 14 different techs the last two years, a few were good techs, he just didn't think at the time matching other offers was his best bet.. But he had wished he did to keep them after seeing how hard it was to find good quality techs. He normally runs 5-6 techs in his service department. Alot of companies are having high turnover across the state. The companies that are willing to pay top money are keeping their great techs. There will be a whole lot of companies hurting in the next 5years and longer down the road, that's for sure.

I have no problem with a service call rate. I have no problem with the freon charge, but your already there, so why tack on another diagnostics charge for a damn capacitor. I buy them from a local distributor thru my work and they are cheap and it only takes a couple minutes to change one out. $50 would be reasonable, but $139 is ridiculous. I could see charging that if your were called out there, and thats what you found wrong, but he was already there. He was called out due to low freon and the unit freezing up. To be honest, i doubt very seriously if there was anything wrong with the capacitor. Sounds like he was just running up the charges. I could be wrong. All the ac guys want to drive brand new trucks, brand new tools and live in a $250,000 house and then bitch about overhead.

You have a broad brush. Most are Tech's making an honest living in a screwed up world.

he kinda contradicted himself didnt he? They wanna bill top dollar, but are cheap skates when it comes to hiring.

I'm not talking about the tech's. I'm talking about the company owners. They dictate how much to charge, not the tech's. Sometimes the tech's are the owners, but not always.

BTW, the biggest scam they have going is the tuneup. They'll come out twice a year and tuneup your system. Keep your filter changed monthly and wash your outside coil out 1-2 times a year and thats all anyone can do, and i ain't paying somebody for that.