Parts pricing rational

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I own a cottage (well to be truthful, a walkout ranch) in northern Wisconsin that I heat year round. I try and get up there at least every two weeks to check on it and make sure everything's OK, etc. This last Thursday I went up there to find the temperature to be 80 degrees. In the basement I found that one of the zone valves was stuck open (two zone hydronic baseboard heat).
I called a local heating & cooling place who sent out a technician within two hours of the phone call who replaced the old zone valve in forty minutes.
This Saturday I received the bill. Total cost was $300 itemized as follows: truck charge: $20, labor & travel: $105, zone valve: $150, flare connectors: $10, tax: $15.
Overall I am very happy with the whole experience. $300 is a lot of money for me, but I fully understand that running any business in a small community has it's costs. (skilled employees, trucks, inventory, etc). Having the ability to place a call and have service performed so quickly was great.
My only question I have is the pricing of the actuator/valve. An internet search for the zone valve & actuator (Erie poptop) shows that I could buy one for about $50. Does this mean a) my local H&C vendor is getting overcharged? b) his markup is around 350%, c) the internet item is a "grey market" item? or d) pricing of hardware is generally overinflated so the bill for labor doesn't look so bad.
My guess is D, I think a bill of $160/105 parts/labor looks more palatable to customers that $60/205 even though the total is the same. Yet finding the same item on the internet could raise issues for some people who could see the price disparity as an issue.
Like I said, I had a very good experience but I am interested in the rational used to determine parts pricing.
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No you're not, or you wouldn't be here!!!!!!!!

What makes the difference? Your heating system is FIXED and they provided you with EXCEPTIONAL service!!!!!!!!
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I agree, he should be giving this guy referrals to his friends. If he didn't like the price quoted, he should have said something before hand. Kind of like buyers remorse, got everything he wanted for a good price now he is bitching about a few bucks. "2 hours" response time excellent, "40 mins to complete" apparently he knew what he was doing too, "$300" very reasonable billing and this guys is looking for something to bitch about. These are the customers that will drive you crazy with questions about everything under the sun. "I could buy it online" what a crock, I can buy a steak for $5 dollars at the store so why does the menu say $25 for the same cut??? This guy should have given the tech a $50 tip... :)
Joseph
p.s. Good to see posting again KJ, don't let the assholes get to you, there is an never ending supply of them online and no one's been able to find a permanent patch for that skylight... :)

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Hi Joseph,
It's good to be back among some of the best techs in the world. There is good company here whether the newbies know it or not. I'm not going to list names as someone might get mad if I left them out, like Steve Scott, go fish, Jake, Sam, Steve Nunes, Mike, Bubba, etc and don't even forget Paul... that would be a BIG ass mistake!! :-)
The company here is among the biggest variety someone could find. We have the best, good, bad, students, and the PITA's. It's comical to see what some of our competition is saying or how they communicate with their customers. It just amazes me at times what type of 'off the wall' comments are made by Chris and DANgER. Then we can all understand WHY new clients are speculative about their HVAC companies, until they acquire a long, trusting relationship with a competent company or tech.
I think the people that have been here for a long time will all agree, you have to be good at what you do, have a thick skin and no your shit to survive on alt.hvac. The weak, ignorant, stupid, don't last long here unless they are also mentally challenged. LMAO
Well, that's enough of my rambling, thanks for the comment and see ya around the next HVAC thread. :-)
kjpro

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You left out one who I think is the best of the best....Bob Loblaw.... he is quick witted, talented, honest, reasonably priced, ...not to mention good looking, he drives the women crazy, and as if that's not enough, he uses a new shampoo that leaves his hair feeling soft and manageable with a clean lemony-fresh scent ! He's also very modest.
--
Respectfully, Bob (Loblaw)


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This is why I didn't mention names! :-)

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Bob_Loblaw wrote:

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I'm definitely hetro-polar! But I think my roomate is gay.... last night his dick tasted like shit.... :-)
--
Respectfully, Bob

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We dont use rational to do pricing. Let me put it an easier way. If I came out and replace a standard thermocouple for you that cost me $4.79 you dont really think Im only going to charge you $7, $8 or $10 for that part, do you? It costs what it costs to run a profitable business, whether you place it on the part, truck charge, trip charge, labor or whatever else you want to name it. It aint cheap to run a business Im sorry to say. Bubba
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The rational for pricing is what it costs to not just stay in business, but to also make a profit.
Personally, I do not charge time and materials, I have gone strictly flat rate. I do not break out labor costs, all my prices are *installed* prices and printed in a book. That negates the "you charged me too much for that part" or "How much is labor??". When I write the invoice, I do not put actual part numbers on it, only the reference number from my price book, and basic part description.
Also keep in mind that I have been in business for over 10 years in a small rural community, and there have been dozens of other contractors that have come and gone in that time span because they didn't charge enough.
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to Bubba & Noon-air;
thanks for the thoughtful replays about the rational of pricing parts. I agree 100% about the need to run and maintain a profitable business. Adjusting prices to support the business or using a flat rate all make sense.
To the rest of you, I just shake my head. I don't see how one could interpret my original post as was a complaint against the HVAC industry. My intention was to post a positive experience I had, I have no complaints about any aspect of it.
Oh, and I did give the tech who did the work a 20 dollar tip. He did a great job!
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Good for you, it sounds like you got a company to call next time you have troubles.
And the Service Tech will not likely forget you...
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Thoughtful......me? Damn, musta been a weak moment in time. You did replace your thermostat, right? :-) Bubba
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"theCase" wrote in message <snip>

You know, ya got a point. I gotta share my experience with you.
I was at a fast food joint the other day. I was torn between getting a McBreakfast or just the McBagel & and a coffee. After all said and done, for another 10 cents I could add the McTater.
Once I left, ate everything and drank the coffee. I gave a thought about how much I paid. Even tho everything was hot and satisfying, I feel they made some money on me. I'm trying to determine how much they made on me.
Do you have any thoughts on this?
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Yea same here. I stopped at a McD's and got a single item off their dollar menu and that was it. I'm sure they made some money on the transaction, but gee, it could not have been much.
All in all, ya gotta love capitalism. Both parties in a transaction feel they are getting a good deal.
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That's sounds cheap to me. You got a great deal, quit your crying.

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Perhaps you should learn to read. It's a wondefull skill to have.
The OP said multiple times that he was happy with the work and response time. I didn't see a single complaint in his post. He was simply trying to understand the pricing model used for parts pricing.
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If you dealt with the general public (on pricing) on a daily basis...
...you'd KNOW exactly where and how this conversation normally ends. Which is the reason for the various replies.
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Why? What reason would he have, other than he thought he was charged 350% mark-up, to worry about parts costs? I may be jaded a bit but it sounded like very polite crying, but crying all the same...
Joseph

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wrote:

the more reason to NOT breakdown all the pricing for every little piece, part and labor. The more numbers you write down, the more the customer has a reason to gripe. Here it is. The repair is going to cost you $XXX.xx Thats all the break down you're going to get from me other than the diagnostic/service fee. Almost like McDonalds. You dont get the price of the cup, straw, lid, ice and coke do you? Take it or leave it although I still leave with the diagnostic fee and the customer is free to search for a cheaper price till their hearts content. Bubba
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