Mr. Sparkle

Guys,

What do you do if a GC wants you to use his supply house account for the material for his jobs?

It's not like he is saying "I'll supply the material I have....", the company uses the same supply house I do & he would like me to put all the material for his jobs on his account.

FYI, this GC is strictly commercial / Industrial.

In what ways do I go about finageling my pricing?

Basically, give him my proposal the way it would be (with material markup etc...) and tell him to subtract the cost of material for each specific job?

Any pointers would be great.

__________________
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."
— Mark Twain

Black4Truck

That has trouble written all over it

Soon he will be questioning you on where was the material used.

You are charging him for strictly labor, just a matter of time he thinks your too expensive

If you have no other work, buy plenty of Aspirin

Mr. Sparkle

I understand what you are saying, and the only reason I am looking for ways to make this work is the fact that I met this GC through another one of his subs who I know on a personal level, he has been with him for years and says he always pays on time.

FWIW, I would be very concise about those types of accusations anyhow, as in what get's purchased for xyz job stays on xyz job or returned.

I know the majority of the work will be service based, so I was basically thinking of an inflated hourly rate to cover the lost margin on the material.

Should I be blatantly honest about adjustments like this because of the fact he wants me to use his account?

__________________
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."
— Mark Twain

nyerinfl

This situation sounds awful. I agree with Black4Truck, you are going to be put on the defensive about where the material is going, and will have trouble collecting on stock truck items, screws, straps, random parts. What happens if you underestimate your material costs and it costs him $2,000 extra from what you figured?

Black4Truck

Does he supply the material for any other trade besides electrical?

leland

He wants you to run around and buy his stock at his price. Labor only.
your the new in house guy.

be careful.

__________________
"When one American is not worth the effort to be found, we as Americans have lost" (Rolling Thunder MA 1)

JohnJ0906

How will he be paying for your time ordering, picking up, handling, and organizing said material?

__________________
John from Baltimore
"One day at a Time"
All responses based on the '08 NEC
It's not my fault, it's not my problem, I'm not your solution.

Mr. Sparkle

I think he does, the sub I know is his demo guy / carpenter. Believe me, I would not even entertain this lead if it was a guy off the street, the lead came to me from someone I know and trust, and he has no complaints about dealing with this guy on a business level.

I was thinking hourly service rate to cover the lost markup, a large percentage of the work is service based.

__________________
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."
— Mark Twain

Mr. Sparkle

Yeah I am thinking about things like this, and I agree with everyone's opinions and understand why you have them.

I am basically looking for the needle in the haystack from someone here, seeing if someone actually has a relationship like this that works, and how they made it work.

Another way I could think of dealing with it thus far is being honest about him about adding markup to the material cost to cover the loss, I'll see it on the tickets....

__________________
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."
— Mark Twain

bobelectric

NO. don't let your account show less activity along with losing markup.

Black4Truck

Good point.. you will show more profit and then pay more taxes on that profit


All must be figured into your hourly rate unless he pays you cash.. I know.. not in the real world

mcclary's electrical

YOu wanted a needle in a haystack, I have it. I'm in the same relationship with the town of Mineral. Every job I do for them, I have to put all material on their charge account. The town manager told me they do all the trades this way. It causes me NO problems. I include mark up in my bill, and only bill for the hours I work. All jobs I do for them I bid anyway, so the markup is easy to hide. Any left over material gets left on the job or taken back to the county shop. I've never had a problem doing it for them. They know all warranty is out the window, since I can't warranty what I didn't supply.

knowshorts

DO NOT give away your mark-up. "Oh, I'll make it up on higher labor". Not gonna happen. He will find someone else who is cheaper.

You also lose direct costs that are business expenses.

How does this benefit you?

Tell the GC the way you do it now, is the way you do business and you aren't gonna change. Is he gonna change his business practices for you?

Mr. Sparkle

True, it's good to hear these things from you guys. It gives me some things to bring up when we talk again. I met the guy for the first time today, we went over a few things, and he mentioned the supply house thing. I did not really comment on it, I just let him do the talking.

__________________
"Whenever you find yourself on the side of the majority, it is time to pause and reflect."
— Mark Twain

leland

Good point:
1 Black4trucks;
the other: you may lose what ever deal you have with your local guy If your 'sales ' appear to be below average.

If it is all service work, give the guy a general stock list of the most common items you will be using.Have him stock it and you pick from it.Run a little low,let him get some more.

Basically: "call me when you get the stuff."
Bill for the time making the list.
HelI,lawyers bill in 10 min increments,why can't we?

__________________
"When one American is not worth the effort to be found, we as Americans have lost" (Rolling Thunder MA 1)

kbsparky

Look at the other side of this: At least, you know the supply house bills will be paid. No more scrambling around at the end of each month trying to collect your draw in time to cut the supplier a cheque.

Peace of mind for some folks.

__________________
-KB

Life is uncertain -- eat dessert first!

RIVETER

Never forget, the general contractor is your customer. He does not have a "NEED TO KNOW" anything about your dealings with your own purchases.
The GC can also use your purchace receipts as his expenditures against the job; He gets a tax benefit.
And you, if you are a legitimate contractor could lose your's.

RIVETER

Absolutetruthz

I would do exactly that, inflate your hourly rate to cover your material mark up. If He asks about it, just tell him the truth

480sparky

That's a real leap of faith. If the GC doesn't pay the bill, the supply house could go after the OP since he's the one that signed for the stuff.

__________________
All responses based on the 2008 National Rat Code.

Black4Truck

THAT is a real stretch of faith

The OP would be same as an employee of the GC picking up material

I have never heard of a supply house calling up an employee looking for payment