kick back to the GC - Electrician Talk - Professional Electrical Contractors Forum

electricmike · 06-01-2010, 05:35 PM

Hello, I'm new to this site so I'm sorry if this topic has been covered in the past. My question is do any of the contractors out there ever get any pressure from the GC to either give them a kick back or add money to your price for them. The reason I'm asking is I have a GC that is always after me to put money on top of my prices for him and I'm not sure if this is an unwritten rule of the trades or if he is trying to take advantage of me. I don't want to run the risk of offending or possibly losing him as a customer if this is the way things work but in some cases its sending my price higher than I am comfortable with. Any input would be a big help.
Thank you.

Grimlock · 06-01-2010, 05:41 PM

How long have you been in business?

electricguy · 06-01-2010, 05:57 PM

Around here the GC's mark up our invoice by 30 percent.

**MDShunk** · 06-01-2010, 06:04 PM

I only pay "sales commission" (the more proper term for a kickback) to a GC if they sent me a customer or job, and they really have nothing to do with the project. If it's otherwise their project, and I'm working for them, I think it's up to them to mark up my bid as they see fit. It's only if I'm working directly for a customer, and the lead came from a GC (or, any tradesman, for that matter) that I feel compelled to sometimes pay a commission.

That said, many of us tradesmen have found that the "you refer me to people and I'll refer you to people" system works out just as well in the end.

robnj772 · 06-01-2010, 06:12 PM

The only kick back a gc should get is a kick in the a$$.

Tell him you will give him 2% if he pays you within 30 days

captkirk · 06-01-2010, 06:27 PM

Quote:

Originally Posted by MDShunk

I only pay "sales commission" (the more proper term for a kickback) to a GC if they sent me a customer or job, and they really have nothing to do with the project. If it's otherwise their project, and I'm working for them, I think it's up to them to mark up my bid as they see fit. It's only if I'm working directly for a customer, and the lead came from a GC (or, any tradesman, for that matter) that I feel compelled to sometimes pay a commission.

That said, many of us tradesmen have found that the "you refer me to people and I'll refer you to people" system works out just as well in the end.

Im for the referal system too. I personally dont like it when they outright ask me for money.....I stick with the ones that work off a referals......

**MDShunk** · 06-01-2010, 06:29 PM

Quote:

Originally Posted by captkirk

Im for the referal system too. I personally dont like it when they outright ask me for money.....I stick with the ones that work off a referals......

I agree. The contractors who always plainly say "throw a little in there for me" seem low-class. I will often send a little "kickback", but I think it should be completely voluntary on my part. Those that seem to ask for one pretty much guarantee they aren't getting one from me.

electricmike · 06-01-2010, 06:34 PM

Grimlock, I've been in business for 2 1/2 years so some of this stuff is new to me.
If i am working for him I don't worry about what he does with my number.
If he marks up all the subs to high he won't get the work but There are times when the extras go straight to the owner or he has me give my price directly to the owner, these are the times that I'm expected to put money on my price for him. I don't have a problem showing a little appreciation but some of the numbers he wants are high in my opinion.
I was curious if this is somthing I have to deal with or should I put a limit to it in your opinion.

captkirk · 06-01-2010, 06:38 PM

I think its customary to give 10-20 percent on your "profit" not total price of the job.

electricmike · 06-01-2010, 06:57 PM

Thank you all very much I appreciate it.

Bkessler · 06-01-2010, 10:17 PM

I have one GC who always say's add 20% for me, I don't mind, although it's a little low class.

jrannis · 06-01-2010, 10:23 PM

Quote:

Originally Posted by electricmike

Hello, I'm new to this site so I'm sorry if this topic has been covered in the past. My question is do any of the contractors out there ever get any pressure from the GC to either give them a kick back or add money to your price for them. The reason I'm asking is I have a GC that is always after me to put money on top of my prices for him and I'm not sure if this is an unwritten rule of the trades or if he is trying to take advantage of me. I don't want to run the risk of offending or possibly losing him as a customer if this is the way things work but in some cases its sending my price higher than I am comfortable with. Any input would be a big help.
Thank you.

Why cant the GC add his own mark-up? You would have to assume they would need to to stay in business.
Its very possible that he has an agreement with the customer for a low margin and wants to make it up through you.
I wouldn't really care if the GC wanted to do it that way as long as I made what I wanted.

captkirk · 06-01-2010, 10:39 PM

Quote:

Originally Posted by Bkessler

I have one GC who always say's add 20% for me, I don't mind, although it's a little low class.

On the profit not total job......If I was to charge a reffered customer 2500 for a 200 amp upgrade and he told me he wanted to add 20 percent to the total bill, i would tell him to go jump in a lake......LOL.....But I would have no problem if he wanted 20 percent on 500. So I would basically give him 100 bucks and a pat on the back.....Or he could add 100 bucks on the tottal bill.

jrannis · 06-01-2010, 10:44 PM

Tony,
I think he just wants you to add 20% to the job and give it to him, not take it out of your end.

captkirk · 06-01-2010, 11:05 PM

Quote:

Originally Posted by jrannis

Tony,
I think he just wants you to add 20% to the job and give it to him, not take it out of your end.

Thats asking for too much in my opinion.....but what do I know..

**480sparky** · 06-01-2010, 11:23 PM

Quote:

Originally Posted by jrannis

Tony,
I think he just wants you to add 20% to the job and give it to him, not take it out of your end.

Then just let him add 20% of your price and submit that to the owner. Otherwise, how would you handle that 20% on your taxes? Schedule C doesn't have a line for "Payments to thugs".

jwjrw · 06-02-2010, 07:46 AM

Quote:

Originally Posted by 480sparky

Then just let him add 20% of your price and submit that to the owner. Otherwise, how would you handle that 20% on your taxes? Schedule C doesn't have a line for "Payments to thugs".

I wonder how the unions handle it on their taxes?

Grimlock · 06-02-2010, 09:40 AM

Quote:

Originally Posted by electricmike

Grimlock, I've been in business for 2 1/2 years so some of this stuff is new to me.
If i am working for him I don't worry about what he does with my number.
If he marks up all the subs to high he won't get the work but There are times when the extras go straight to the owner or he has me give my price directly to the owner, these are the times that I'm expected to put money on my price for him. I don't have a problem showing a little appreciation but some of the numbers he wants are high in my opinion.
I was curious if this is somthing I have to deal with or should I put a limit to it in your opinion.

I've only officially been in business since April 15th so I can't claim to know much about anything but I can't say I ever encountered GCs wanting kick backs while working for my previous employer as a project manager. Before that I was estimating small projects for their service department and still never had any GCs ask to add a % on the top. Maybe the GCs only play those games with small companies. I guess that means I'll be dealing with that sooner or later. Seems pretty shady to me.

jwjrw · 06-02-2010, 01:52 PM

Mt Dad just told me he had 2 friends go to jail for it. A city contract for the old DORAL apartments that flooded out every year till they finally tore them down I think(the half that didn't flood may still be there) he wanted us to do it. Even though he was a freind and Dad had been doing work for years for him he wouldn't. Good thing too!

IrishRugger · 06-09-2010, 01:00 PM

I have never paid a kickback to a GC but I have been screwed over by some would that constitute a kickback.

Just today a GC walked up to me at the gas station and asked me how much it would cost for me to lace a sub panel in a new building on his commercial property that he just put up. He did all the wiring in the building himself including feeding the sub panel from the service in his main shop. He said he was uncomfortable terminating in the panels.

I asked him what he used to feed the sub panel in the new building he said he ran conduit up to ceiling and over to the end of his building, down the outside wall and trenched over to the new building into the sub panel and pulled three conductors.

"Three conductors, you need four to make the sub feed legal" I said. He then said " but that is what an electrician told me I needed, It's already pulled in and trenched in."

I said "Who pulled the permit?" He said The electrician I spoke to said I don't need a permit"

I said " Who's that?"

No Reply

I said " Then have that electrician hook it all up and not me"

The GC became irate and said he would hook it up himself.

I'm considering calling the inspector, and reporting him for wiring with out a liscence.