Underpricing yourself

[Hemsby]

Having been in the manufacturing business for some 45 years I came across pricing situations the hard way early on, realising that there are basically two distinct contract terms in any trade, business or profession. ESTIMATE & QUOTATION

QUOTATION is a fixed price, if materials are included they would normally be subject to market price fluctuations and calculated at the time of purchase. Labour however is fixed, unless there are provisions in the contract for circumstances which the contractor could not have reasonably foreseen.

ESTIMATE is exactly what it says everything is subject to possible change

DEPOSITS. the amount of deposit that can be withheld in cases of contractual dispute can only be an amount equal to the loss sustained by the contractor, which could be less than the deposit taken or possibly more

 

[doctor Bob]

provided i haven't started the work all my deposits are fully refundable.

Nothing to do with business, for me it's a moral thing, I just couldn't take the money. Certainly not saying I'm right and your wrong. It's just the way I want to do business.

 

[MMUK]

What I am curious about is what materials can vary by 30% in 60 days. Go on MMUK let us know please.

Al

For me there are two main products that fluctuate vastly more than others - lead and cement. I've purchased 6m x 9" code 4 lead one week at around £65 +VAT, next week it can be £85 +VAT. Cement can be £3 +VAT a bag one week and £5 +VAT a bag the following week.

Other items that do fluctuate in price include cable, uPVC products, plywood and ready mix concrete.

 

[Terry - Somerset]

We should consider the situation from a customer perspective - I have signed a contract and paid a deposit in respect of some work identified on a quotation. I expect the work to be completed as contractually agreed. If the supplier tries to increase the price subsequently I have a two main options:

1. Agree to the increased price if to change horses mid stream would be even more costly - project scheduling, knock on impacts on other suppliers etc

2. Refuse, accept that the supplier does not complete the work, and find an alternative.

In the first case I would be unimpressed (to say the least) may try to withhold final payments, give poor business references etc.

In the second case I would seek a full refund of my deposit (+/- any other cost impacts) using the small claims court if the value were not too high (up to £10000). It would be for the supplier/contractor to demonstrate that costs had increased clearly outside of their control (not a simple estimating error). If this were the case I would anyway consider accepting some compromise price increase purely on the basis of fairness.

Rgds

Terry

 

[vally bar]

What I am curious about is what materials can vary by 30% in 60 days. Go on MMUK let us know please.

Al

For me there are two main products that fluctuate vastly more than others - lead and cement. I've purchased 6m x 9" code 4 lead one week at around £65 +VAT, next week it can be £85 +VAT. Cement can be £3 +VAT a bag one week and £5 +VAT a bag the following week.

Other items that do fluctuate in price include cable, uPVC products, plywood and ready mix concrete.

Is the best you can do what a load of cods wallop

 

[PAC1]

MMUK, two points
Your terms will protect you if the client changes the specification but it is not there to allow you to threaten the client with unilateral increase in price because you under priced the work or lose the deposit
Have a look at my website before you suggest I do not know what I am talking about http://www.fenwickelliott.com/team/partners/collie

 

[MMUK]

What I am curious about is what materials can vary by 30% in 60 days. Go on MMUK let us know please.

Al

For me there are two main products that fluctuate vastly more than others - lead and cement. I've purchased 6m x 9" code 4 lead one week at around £65 +VAT, next week it can be £85 +VAT. Cement can be £3 +VAT a bag one week and £5 +VAT a bag the following week.

Other items that do fluctuate in price include cable, uPVC products, plywood and ready mix concrete.

Is the best you can do what a load of cods wallop

That's your opinion and you're entitled to it. Personally, I don't give a flying **** what you think. My business has no effect on you whatsoever so it's none of yours :wink:

 

[MMUK]

MMUK, two points
Your terms will protect you if the client changes the specification but it is not there to allow you to threaten the client with unilateral increase in price because you under priced the work or lose the deposit
Have a look at my website before you suggest I do not know what I am talking about http://www.fenwickelliott.com/team/partners/collie

It is not there to threaten anybody, purely to cover myself and were written several years ago by a good friend who works for Sweet & Maxwell (I think they know what they are doing as they are one of the largest contract law specialists in the world :wink: ).

As you haven't seen my contract terms in full I don't think you, or anybody else for that matter, are in a position to comment.

So to the rest of you who are slagging me off for such terms, do I take it then you don't even have the standard "ownership of good remains with us until all monies are paid in full" in your contract terms, or words to that effect? It makes me wonder if any of you who own your own businesses actually use contract paperwork at all :roll:

 

[PAC1]

MMUK I agree that your terms and conditions should be there to protect you from clients changing their mind but not there to allow you to unilaterally increase the price for fear of losing their deposit. If you breach the contract by refusing to honour the agreed price the client is entitled to recover the deposit. If you refuse to do the work for the agreed price then you have "repudiated" the contract the innocent client is entitled to the return of the deposit and any additional costs they incur

Sweet and Maxwell are publishers of books not lawyers. They publish books written by people like me

 

[MMUK]

Sweet and Maxwell are publishers of books not lawyers. They publish books written by people like me

In that case, it may have been the company you now work for who actually wrote them :wink: All I know is my friend said that he knew someone at/through work who could write them for me. It was over seven years ago now.

And as I've already said, if I decline to complete the work, deposits will normally be refunded minus any costs accrued.

So how many of you kick off at paying non-refundable deposits to hotels or airlines? :roll:

 

[vally bar]

If it wasn't so early I would swear you had been on the Vino, pass that man a new spade he wants to dig himself a deeper hole.

 

[MMUK]

If it wasn't so early I would swear you had been on the Vino, pass that man a new spade he wants to dig himself a deeper hole.

Grow up you Scouse ***** :roll: You've already said you don't approve of the way I draw out my contracts. So you've already had your opinion. Now you can tinkle off and bother someone who gives a ****.

 

[vally bar]

If it wasn't so early I would swear you had been on the Vino, pass that man a new spade he wants to dig himself a deeper hole.

Grow up you Scouse ***** :roll: You've already said you don't approve of the way I draw out my contracts. So you've already had your opinion. Now you can tinkle off and bother someone who gives a pineapple.

O the irony.

 

[Fatboy]

So how many of you kick off at paying non-refundable deposits to hotels or airlines? :roll:

That would depend on whether they refused to let me have the room I'd booked on the grounds that I wouldn't pay an increase because their cleaning costs had just gone up by 30%

We have non refundable fees in the industry I work in now, Trading Standards are extremely specific about when and how we can hold onto them and in what circumstances, none of which involves us wanting to increase the cost to the consumer or pull out of the contract as agreed.

Your contract terms may well have been good 7 years ago, and in principle I agree with what you are trying to do, but have you tested them against new legislation? in particular the Unfair Terms in Consumer Contracts Regulations 1999 which changed the playing field a lot in regards to deposits and cancellation clauses. See a summary here http://www.justice.gov.uk/downloads/cla ... sumers.pdf

 

[Ghengis]

What you need to do is find out if the customer had other quotes that were significantly higher than yours, if they did then there is a legal prescedent for them being obligded to pay the extra costs.

eg. argos miss price a tv for £19.90 when it should be £199, as a reasonable customer when challenged are obligded to pay the difference because you know the price to be wrong.

handy having a daughter whom has graduated with a law degree.

 

[Random Orbital Bob]

Has that changed somewhat recently then as my understanding has always been that if the retailer makes a labelling error they are obliged to sell it at the advertised price?

 

[murdoch]

I have underpriced some jobs before, the worst was when i built a large conservatory and forgot that the customer had specified self cleaning glass, I had only allowed for standard glass but written self cleaning in the quote. The glass came to a extra £3500!
I paid it out of my own pocket and lost money on the job but never told the customer or asked for any extra money.

I am a firm believer in that the golden rule in business and life is to 'always treat others how you would like to be treated yourself'

this seems to sort out nearly all problems i come across and results in us having a really good reputation for integrity in the area we work in.

 

[Phil Pascoe]

Has that changed somewhat recently then as my understanding has always been that if the retailer makes a labelling error they are obliged to sell it at the advertised price?

No, they are under no obligation to sell at that price and I think that's been the case for a long time.

 

[n0legs]

Ha! Ha! Mr :wink: :wink: :wink: :wink: dal allan eto :lol:

 

[Drudgeon]

Has that changed somewhat recently then as my understanding has always been that if the retailer makes a labelling error they are obliged to sell it at the advertised price?

No, they are under no obligation to sell at that price and I think that's been the case for a long time.

That is correct, I'm afraid that's an old myth Bob, I believe the legal term for a price tag is something along the lines of 'an invitation to treat' and if the customer gets to the cash desks and the sales person realises a pricing error has been made, they are quite within their rights to refuse to sell at the lower 'wrong' price. Many people though believe as you have said, that they are legally obliged to sell at the 'ticket price'.