Well, I think it's a little too late to say that, at least as far as avdude is concerned :-). Just kidding.

I'd probably start by looking for installers on www.cedia.com, though I assume you are already familiar with them. Good luck Sam.

So SAM, how do you actually evalute the bids for the TV trucks at work? What are the criteria? is it only based on lowest dollar.

I suspect that when you evalute the bids from the 5 bidders for those custom TV trucks it's not only based on lowest dollar. Given that you work for a large company that has processes for evaluating bids you would look at the entire bid and not only the bottom line. I'd be very surprised that you don't have an evaluation matrix that has a weighting process (to measure compliance to the original RFQ) and ensure best value for the dollar spent.

Do you do this for yourself. As you previously mentioned. your time is worth money. An informed consumer would.

The reason why most A/V companies don't like to give line item pricing is that we all have gone through the time and effort of bidding on a job like only to find out that the customer was only window shopping or had already lined up some trunk slammer and just wanted the satisfaction of know he/she got the best price possible. I've had this happen working for large telecommunications companies and for my own company and it's a pain in the ass and a huge waste of time and like you time is money.

Also, the truck suppliers may provide line item descriptions, but you won't get line item pricing from these truck suppliers. Would you buy a the engine from someone else because it was cheaper and expect the TV truck integrator to install it free or for almost nothing.

I don't charge for bids, but do charge for design work.

PS: I would be surprised if the margins on those custom TV trucks are less than 30%. Custom work is custom work doesn't matter what industry. I wonder what NBC's margins are for air time?

No it's not. Three out of the five have eliminated themselves based on items not related to cost at all.

I don't understand what point you're trying to make. I've already agreed I'm willing to pay extra for your expertise.


I can understand that. However, does this mean if I ask for a bid from you, and you give me a total, can I ask for and receive a line item list? That line item list has to exist somewhere in your company. Otherwise, how do you know what to make the total?


Actually, one company does give line item pricing for the equipment.


This is what I would prefer.

I said a number of times my questions about margins were curiousity. The one point I was trying to make is if you sell me a piece of gear for $1500, and I find out the next week I can buy the same piece for $1000, I'm going to feel cheated. I know your expertise costs extra, but 50% more? Don't tell me it costs $500 to install it because installation costs should be handled seperately (in the contract/bid, not the final check)

I probably misstated my point a couple times. I hope this is more clear.

SamG

Yes, in many cases 50% more, but not only because of expertise but because of training costs, warehouse/showroom costs, insurance costs (NOT just liability but workers comp and health) etc. etc.

There is no product out there that you can't now find on the Internet somewhere with someone that has no overhead and no real business willing to seel it for 5% or 10% over cost. Or an installer that works for himself only that will sell anything at 5% or 10% over cost just to charge $25 an hour for his labor. That guy likely won't be around long, but there are so many of them at all times that they are always all over the place.

Unlike some others, I'm not ranting about it. That's life. It's nothing new and it exists in most businesses. When you hire an electrical firm in our area, you can hire a good firm or you can choose from one of a hundred others where you will be lucky to have someone on the job that speaks English. A good one might cost double what a bad one does. Sames goes for contractors and it's actually become a rare thing to see a truly well built house anymore. Nothing unusual about a good contractor giving a bid that's 50% higher than a hack contractor, not unusual at all.

This message was edited by QQQ on 02/25/04 19:58.

In response to the line item bid. We always give a line item bid. We break down the pre-wire, the trim, and the finish into seperate numbers with everything itemized(estimated budget for cables etc, but part number, description, and dollar on everything else). We have discussed going to just a number, but to be honest, the response to the line item was so much better that there was no way could go to just a number. Cases in point: 1)In our area, there was a lot of turnover for a while a few years back. Companies opening, then going under a year later. Builders and clients lost a lot of money and more importantly, confidence. Our builders VERY carefully review bids now and double check permits, insurance, and licenses. If they don't see where the money is going, then the bid goes in the round file. When we hand a client an itemized bid that is broken down, we have nothing to hide. If someone wants to shop us on a part, then they will. Our pricing structure is and always has been "look at MSRP, then look at the AUTHORIZED internet price(including shipping,warranty,etc).....compare.....then find a happy medium" We have a hard time with some of the prices manufacturers want you to charge for a product. On both ends of the scale. Some products are priced so low and there is so much competition that we have to have low margins. We typically spec in higher-end products that we know work well and we can stand behind. Most of these are not available on-line and there is some price protection. Some products(Samsung DLPs) are priced low on the internet, but the availabilty is low and the shipping makes it worthwhile to buy at MSRP from us. Some MSRP prices are so high and there is so much competition that you can never get MSRP. The Pronto is a great example. The MSRP on the TSU-3000 is $399.99, but you can buy one from the link on this page for $259.95. Should I try to sell it for $399.99 knowing what kind of deals are out there? Or should I sell the remote for say $325.00 then add on 5 hours at $65.00/hour for a basic program? Or should I quote the Pronto at $650.00 programmed? The problem with just giving the $650.00 number is that I haven't attached any value for my time. When I qoute the time it's going to take me to program the remote, then the customer sees where the money is going. My time is just as important as the remote itself. If they want to shop around and try to buy the remote for $259. and then program it themselves, more power to them. It won't be done the same, won't work the same, and after the customer has a few hours into it, I'll get a call to come and program the remote. The difference is that now I can still charge the $65.00/hour that I originally qouted. If I had given the $650 bid, the customer would have undoubtedly thought I was selling them the remote for $399.00 and that the programming was $250.00. Funny how the number work both ways. With the line item bid, there is no confusion.
Does this hurt sales? Yes and no. Yes in that if someone thought we were too expensive, they have proof of what we charge for each item and all they have to do is a)discount all the gear, or b)knock of a bunch of "fluff". You know the gadgets and gizmos that make the system work. We know this happens. We gave a small bid to a client who then opened up a competitors bid and said "they aren't using this 'IRKIT', or this 'Cabinet Fabric'and 'Cabinet Labor', or this 'Power Conditioner', why do I need this?" Our answer: smile at the chance to show our expertise then say: "The 'IRKIT' repeats the signals from your remote into the cabinet so you don't have to have the door open to use the system. The 'Cabinet Fabric' and 'Cabinet Labor' are to cover the speaker locations in the cabinet with an acoustically transparent fabric to make sure that sound gets out without any interference from the door. The cabinet maker may do fabric covered doors, but the material is not acoustically transparent and can alter the sound." You get the picture. Every time one of these questions come up, We smile and point out why the part is needed and how we can save them money by removing the item(not discount it) and then why the system won't work the same without that part. the last part is to point out the bottom line on the competitors bid that says "additional parts/materials extra" If you need the part, you need the part better to sell it upfront. When a client sees that we have done a thorough job designing the system and have included all of the parts they need, they can see why our price isn't the same. It seems that most of the shops around here like to throw out bids like raffle tickets "if you put enough out, your gonna get a winner". We prefer to take the time to do it right. Our builders always come to us for this reason. True story: We gave a bid to a client who had gotten a bid from EVERY shop in town, and a few trunk slammers. Our price was the highest. With some bids, we were as much as seven times the price. The difference was our 15 page bid that included everything. The next most detailed was three pages(one was a cover) and it was itemized like an invoice. The beauty was that the lowest bidder had some of the same products we did. On every item they bid on, they were 10-15% higher than we were. They just weren't doing the same job. The client didn't want a "cheap" job, she wanted it done right. We got the job and all is well. When we meet a new client, we make sure they understand who we are and how we work as part of our sales pitch. Too many people don't take the time to sell themselves until it is too late. They don't talk about quality until they are on the defensive. They don't bring up being an authorized dealer until someone else has. Salespeople forget that the company is a product like any other and needs to be sold up front, not later.
On another note, we do charge for design time, but not for the bid itself. Our bid adresses design and assigns an hourly dollar amount to it that is added when we do additional design, meet with cabinet makers, supervise framing etc. The initial design hours are on the initial bid and are a seperate line item. Most of the time, the initial design time is only a couple of hours, but at this point the client understands that the intellectual time we spend with them is as important as the time we spend pulling wire(more, if you go by the dollar amount). Further, the subject of additional design time is on the table and the builder, as well as the client know that there will be a charge if the plans/design change.

Just our .02

Jason

I'm not mad, or puset, not at all...

In fact it's funny that at least 20 other people have said some, or ALL of the things I said, and I think SamG IS starting to understand where we are coming from!

But just in case he doesn't, here are my updated Q4 2003 figures in a nutshell...

Our company currently spends $57.00/hour PER employee...

This includes wages, all mandatory insurances, vehicles, rent, bills, benefits, training, travel, etc...

We currently charge a MINIMUM of $75.00 per hour.

PHS

That is one DAMN big paragraph...

but please clarify this for me, because I'm VERY suprised by something you said!

Do you provide a line-by-line bid (EVERY LINE HAS A PRICE ON IT) or a line ITEM bid (EVERY LINE HAS A MODEL NUMBER, EXPLANATION, ETC..., but NOT a price?)

I ask because that would TRULY be a shopping list!

Thanks,

avdude
www.integrationpros.com

line-by-line bid

Yes, I am. And I think others can see where I'm coming from.

I'm going to try to make my point one more time a different way on the profit margins (which I'm actually not talking about profit margins, but you get the idea).

You want a new computer. You go to (insert favorite computer store here) and they can get you the exact computer you want. It will cost you $1500. You give them the credit card, and you go home with your computer.

Within a week, you go to (insert favorite general store here), just out of curiousity, you go into the computer section. There's your exact same computer... memory, HD size, monitor, slots, cards, everything... for $1000.

Now, you just spent $500 (half again as much as what you could have paid at the general store) more at the computer store. Yes, they have more expertise than the general store, and they have better service available (I don't know how long you guys do free warranty repair on stuff). But do you feel you got a good deal?

Disclaimer: I am only talking about one item in a long list on a bid. I know you have to look at the entire bid and the company behind the bid to try to fairly compare bids.

Now an extra $500 might not mean much to you guys, but that can buy a lot of diapers, groceries, gas, games, whatever for my family.

Notice, I said nothing about shopping on the internet, and nothing about asking the computer store to knock their price down. I'm talking about how I feel after seeing the price difference.

SamG

SamG,
Many manufactures have suggested retail pricing for products. A DVD player might have a MSRP of $99 and our cost is $89. A speaker might have a MSRP of $999 and our cost is $499. If I had to sell DVD players like that to make a living I would go look for another profession and leave you to figure things out for yourself (I can't see it from my house).
I only sell products like that when it's part of an overall package that I'm making money on, or I might sell one to an existing loyal customer (not worrying about not making any profit on that one piece for him/her).
Also, somebody coming to me with all their own equipment to install is going to pay full retail price for any and every accessory I have to sell to make it all work. And pay full labor cost based on time, not estimate - meaning if it takes me 14hrs to install something that's what the customer gets charged, where if they would have bought it from me and I bidded it to take 12hrs then that's what the customer would get charged, even if it took me 14hrs.
Oh, since it becomes per hour for stuff I don't sell, the customer better hope they don't have any problems with the equipment they got from someone else or quarky problems because the things they bought don't like being hooked to one another (there are hundreds of brands out there). Cause I'm not coming out to look at things for free that I didn't make any money on, they'll have to pay me every time this happens.

Back to the Manufacture Suggested Retail Price (MSRP). If that $1,500 thing you bought had an MSRP less than $1,500 - then yeah I would think you would be mad, as you got taken. But If the MSRP was $1,500 and you saw it for $1,000 somewhere else, then the $1,000 place obviously is making a lot less profit than what the manufacture or industry says it takes to PROPERLY support this product. Red flags should go up and although you might get a great deal, you have no one to blaim but yourself if something happens that turns the whole experience into a waking nightmare. To be fair - this could happen even paying the full price, that's why it's important to have references and get to know your installing dealer.

Sorry, I just noticed I split the topic - getting into something similar but different.