Subscriber Discussion

What Is The Best Answer To "Can You Break Out Your Quote By Line Item?"

U
Undisclosed #1
Mar 08, 2016
IPVMU Certified

Situation: Customer owns several convenience stores. You have already done two stores successfully and have quotes in for several more. After dealing with the seat-of-the-pants owner on the first two, all of a sudden the controller is getting involved asking for breakout of parts and labor per store. Previously you have only provided minimal line item detail and no line item prices, just the total, in true contractor style.

Since you have done the two stores, you know that they are real, but at the same time, by the questions by asked by the controller, you feel you are being shopped.

What's the best thing to say to avoid breaking out the quote while not screwing the deal?

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MC
Marty Calhoun
Mar 08, 2016
IPVMU Certified

Explain that you are in business to stay in business, you offer excellent products at a reasonable cost. The end. I have been down this exact road. Sometimes it is better to not even do a job whatsoever if the margin will end up in a place you do not want to be in. You are in charge, he does not know what you know, be confident about yourself, your company and your staff. Only do what you are comfortable with or just don't do it.

Sound like the controller has a 'friend' in the business that wants your numbers. In your position, assuming you have completed (2) jobs well done with the owner, stand your ground and tell him to take his questions to the owner, you work for him! If you do good work, offer 'reasonable' prices that will keep you in business tomorrow you are doing the right thing already. Don't waste valuable time on 'needling bean counters'.

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U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

Agree with what you say but in addition to affirming value is there a viable "why not" answer? I feel that going to the owner directly without having a "because" is less desirable than having some pat answer.

Just something good enough for the owner to accept instead of "we're so good we don't have to tell you".

Was thinking something like "we don't show any prices for lines because it's impossible for it to be accurate with the variable labor and support, as well as the materials that may be substituted depending on the final 'as is' config. That's why we just guarantee that it will do X and cost Y."

but it sounds a little like bs...

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Marty Major
Mar 09, 2016
Teledyne FLIR

Why not?

Because if you decide to do so, then your earned position of strength is diminished.

I agree with Mr. Calhoun here...

This new bean counter is attempting to assert himself into a position of strength by questioning how you do business (or at least attempting to influence how you do it). This has the effect of disregarding/diminishing your previous work with this company.

If this was a new customer maybe I might think differently (doubt it) - but it isn't. You have successfully deployed numerous locations for this customer already - and it sounds like the owner perceives the 'value' that you are bringing to the table. As Mr. Calhoun said above, if the bean counter has any questions about how you operate, send his ass to the owner.

You sell value, not cameras and connectors and cable. Tell the bean counter - as politely as possible - to pound sand. If you surrender your earned high ground, you will never fully get it back - especially if you relinquish your position to some bean counter who thinks they need to kick your ass as part of being a 'strong advocate' for their company.

If you stand behind what you do, then I would stand firm. Refuse to submit to these new demands and tell the owner exactly why you won't.

I bet you get the whole deal. ;)

**DISCLAIMER**

I am not a lawyer, nor a business development expert - I just loathe those who attempt to bully others from some self-perceived higher moral ground. :)

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U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

Ok, agree again.

But, I am not talking about the bean counter anymore, I am asking what to say to the owner when I speak about the bean counter.

Understand, the request was made in the oh so casual way of any other legitimate and mundane business request, so I was not trying to have an overreaction. I can puff my chest out and feel good, but at the end of the day if the controller told his boss that the quote should have detail, he's just doing his job, right? And the owner certainly has the right to ask, just like I have the right to refuse.

I was hoping not to surrender, but not to fight either, and rather just have something that makes the request seem nonsensical and uncompliable, maybe due to some accounting or business strategy etc.

Though there may be no other way than head-on. And let's not have any illusions, you can do good honest work for a company, and charge a fair amount and be respected but when they see product on the Internet at less than 50% of what they think they paid, biz is biz...

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Marty Major
Mar 09, 2016
Teledyne FLIR

UD1,

You face a common conundrum - as John's link below shows. There are many points of view in that string that can help you.

I think this is really about how well you can convey your value message to your customer.

Clearly - in the real world - you can't just strut in, John Wayne style, and start telling the customer what's what. That don't work - as you note.

It's about having confidence in the value you provide your customers (as Mr. Calhoun alludes to). You can get tips here, RE: how to convey this to your customer.... but imo, this value statement has to come from you.

imo (again), there are two possible scenarios in play here:

1. the customer is just seeking to validate why they should trust you. This is the question you need to answer for them... no chest thumping needed. ;)

2. the customer has thrown some business your way in the past, and are now seeking to 'put the squeeze' on you to see what discounts they can milk from you on future jobs.

Hopefully #1 is in play. If #2 is in play, then you have to stand firm and state your value (and you've got the completed jobs under your belt already). If you offer discounts for future work that is below the job totals earned from jobs you've already completed, imo (yet again) you lose.

**ANOTHER DISCLAIMER**

Again, I am just offering my own personal opinions to add some color. You should do what you feel is best for you.

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Mark Palka
Mar 13, 2016
IPVMU Certified
I partly agree with you but this question may be simply that the controller wants to break down the costs of goods vs the labor for accounting purposes. Further what I usually do not use manufacture part numbers opting for our own company part number this makes it difficult to exact price match. Then I go on line and look for pricing for the products offered and provide my price around 10 to 20 % of that price and I load heavy on the labor and materials side.
JH
John Honovich
Mar 09, 2016
IPVM
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Mark Jones
Mar 09, 2016

Simple actually. When asked by the comptroller, the answer is no.

If the owner gets further involved, you need to ask whom you are working for; this guy or that guy.

EDIT: Yes, you are being shopped. That is what comptrollers do.

EDIT #2. Signed John Wayne!

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Marty Major
Mar 09, 2016
Teledyne FLIR

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Mark Jones
Mar 09, 2016

I always enjoyed that movie!

U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

You're too quick on the draw for me, Major. ;)

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U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

"No" is the answer. Thanks to everyone who commented so far.

Yet no one has offered a concrete suggestion for the best answer to "why not" if asked by the owner.

Basically, am I saying "No", because I won't do it or because I can't do it?

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Marty Major
Mar 09, 2016
Teledyne FLIR

"Yet no one has offered a concrete suggestion for the best answer to "why not" if asked by the owner."

There are many good suggestions for answers to this question in John's link.

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Mark Jones
Mar 09, 2016

Frankly, I have always found the truth to be the best answer.

"I don't offer line item quotes because it almost assures that my work and effort will be shopped around to my competitors. We have taken the time to work with you, evaluate your needs and develop a system that exceeds your expectations and that has value. When you send me a binding purchase order for the remaining stores, I will be glad to work up a line item quote."

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UE
Undisclosed End User #2
Mar 09, 2016

I don't understand the resistance to displaying detailed costs in this sector. I've worked as an IT Administrator for over 10 years and received more proposals, quotes, contracts, and statements of work than I can even recall. On anything more than a couple thousand dollars part cost, part numbers, and labor is all broken out in as much detail that is requested. Labor is frequently an estimate given in the form of labor is XXX$ an hour, XX hours estimated for completion of task.

The Controller is only asking you for the same information they would get with any other contract. For example they might need the breakdown of hardware vs installation cost as they can declare the hardware a capital expense and amortize the cost over several years. The same cannot be done with labor.

This is a convenience store chain, they got detailed information for part numbers, cost, and labor when they did any other project I imagine. That would include POS terminals, refrigerators, new soda machines, and everything else they have done that wasn't a one off. Why should you be any different?

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Mark Jones
Mar 09, 2016

Let's put the onus back on you for a moment. Why do you need it to agree to awarding me the work? I have already agreed to provide it once you issue the PO. I will be more than happy to meet your needs once I have the work. Problem solved - unless your motive is to shop me around.

JH
John Honovich
Mar 09, 2016
IPVM

Mark,

I do think you provided a good answer above. It's direct and honest about the integrator's concerns.

On the other hand, #2 expresses a reasonable opposite perspective.

You ask:

"Why do you need it to agree to awarding me the work?"

Being 'shopped around' is part of any business. An integrator certainly has the right to refuse but does not the customer have a right to demand it as well? Each side needs to figure out how important this point is in the negotiation (i.e., would either walk away over it).

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UE
Undisclosed End User #2
Mar 09, 2016

I need it to be sure I'm not being swindled by this contractor. That's the controllers job; to make sure books are in order, bills are paid, and to save the company money. If the breakout shows parts are being sold at 2x MSRP or a labor rate of $300 an hour then there is a problem. If you are honest and competitive with your rates then there is no reason you shouldn't share this information with your customer (who you need, not the other way around).

In this example I just give another (likely larger) local security specialist a call and get a quote on a system to meet my needs without your line item breakout. As long as the prices or close, I then give my business to them because you left me feeling like you were hiding something (which from their perspective you are).

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Mark Jones
Mar 09, 2016

Let me ask you this since we really don't know each other. Let's suppose for the sake of argument I price my quote out and I am very competitive on equipment and labor, but I have a design fee there. Then what? And be honest.

UE
Undisclosed End User #2
Mar 09, 2016

I would say that the presence of it would surprise me, but that wouldn't make me walk away. Especially since in this case as we've done some business together before and we're looking to expand our relationship. If you're honest, I have no problem paying a competitive rate and design fee.

It's not usually called out specifically though. For example I recently (within the last year) signed a contract for a new phone system. This involved probably 2 dozen meetings with both staff in my facility and their installers engineers over a 6 month period. Probably close to 100 man hours was spend getting all of these details together; going back and forth over line items, cost, options, and specifications. There wasn't a design fee in this (I'm sure their cost was built into the price though) and we didn't pay a dime until we signed the contract. This was a 6 figure contract so that's substantially different than a small scale surveillance install though.

It also depends on the cost of the install. If you are selling 3-5 thousand dollar jobs to companies that have less than $1m in annual revenue you probably won't run into this level of detail requested. If you want to expand into larger jobs for midsize companies then you'll have to adapt to their accounting expectations. These companies didn't grow to the size they are by just trusting that they're not overpaying for things.

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Mark Jones
Mar 09, 2016

This example is perfect really. 6 months, 100 manhours, details, back and forth, line items, cost, options specs. I assume you arrived at a contract or agreement. Did you at that point bring in another vendor for a competitive bid? I would assume not. You had too much time and too many resources committed, and it also would have been unethical.

More than likely you selected your vendor then proceeded.

No vendor would have put that much time and effort into a project without some assurance that there would be a reward.

For Undisclosed 1, it may or may not be 6 figures. That is not relevant. His question was how to avoid getting shopped around.

Frankly Undisclosed 1, you most likely won't. There are some pretty good ideas offered in this discussion and on the link. You will have to decide what fits you the best, and be ready to change in the future.

There is no one size fits all as far as I know.

Good Luck

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Mark Jones
Mar 09, 2016

And that is the crux of it, is it not? No matter if you are buying or selling, you have to be willing to walk away.

Just one alternative is to charge a design fee up front on the first job, to make sure your time is accounted for. After that, provide a line item quote and let the chips fall.

Another alternative is to negotiate the terms. For instance we offer a two-year warranty. If that has no value, then knock it down to one. Response times, loaner equipment, all of it can be negotiated to a level that you are both comfortable with.

One huge issue is equipment substitutions. If the customer is shopping, they should at least make sure it is exactly the same product, not a "like". There is a difference between Red Delicious apples and Sweet Tango. To an apple vendor, not all apples are the same. A soup kitchen is just trying to feed someone.

UM
Undisclosed Manufacturer #3
Mar 09, 2016

Break it out without giving away everything.

To do so your line items may include.

  1. Cooler Bullet
  2. Register Dome
  3. Exterior West Bullet
  4. Exterior East Bullet
  5. Headend
  6. Interior Labor
  7. Headend Labor
  8. Exterior Labor
  9. etc...with a price for each line

To me this beats:

  1. Axis P1357
  2. Axis P3225-V
  3. Axis P1405-LE
  4. Axis P14250LE
  5. Exacq ELPR NVR with 6TB storage
  6. etc.........

You comply with a legitimate request, but don't give away an easy opportunity to let your competition compete "apples to apples."

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Mark Jones
Mar 09, 2016

I actually like that, but ask the controller over there if that is sufficient? He just called me a swindler.

UE
Undisclosed End User #2
Mar 09, 2016

If you were insistent on only revealing specific part numbers and pricing breakdown after a signed contract and deposit I would find this acceptable.

I maintain it's still strange to withhold this information to begin with though... This coming from someone who managed an annual IT budget of $500,000 at a retail company with ~$60 million annual revenue. If I didn't trust any vendor, I walked away and gave somebody else our business.

Also I don't believe I called you a swindler. It was not my intention to offend you if I did.

I'm just trying to give the perspective of a mid size business to this conversation (something that seems quite lacking in these forums). Since this conversation is quickly devolving I'll see myself out.

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MI
Matt Ion
Mar 09, 2016

"Sure, I can do that. It will take a few hours to completely re-work the quote, and of course, that's billable time... invoice will be payable before delivery of the revised quote. Your move."

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JH
John Honovich
Mar 09, 2016
IPVM

"invoice will be payable before delivery of the revised quote. Your move."

I will go to your competitor then, your move.

Serious question, though, don't you think that's a risky tactic to take?

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MI
Matt Ion
Mar 09, 2016

Well you've got several suggestions here already, that simply walking away may be an option if all the customer is going to do with your line items is find someone to undercut you.

The risk of them taking the revised quote to a competitor is already there. So you're risking simply wasting your time right there. If you figure there's a good chance of losing the customer anyway, why not at least indicate that your time is worth something?

Or you can just walk away, as others have suggested.

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U
Undisclosed #4
Mar 09, 2016

Since when is creating a customer-acceptable quote 'billable time'?

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MI
Matt Ion
Mar 09, 2016

Creating the first one, no. Revising because they want more detail? That's extra work. My time is valuable.

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U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

Customers pay for everything in the end, down to the last paper clip. It's just a question of which ones pay for what.

MM
Michael Miller
Mar 09, 2016

We break out every quote that goes out the door and we have been told by customers they feel more comfortable with us when comparing our quotes to the one line quotes they get from the competition. We win 80% of the jobs we quote so it is working for us.

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U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

We break out every quote that goes out the door...

Most Some are not allowed 'out the door', though right?

MM
Michael Miller
Mar 09, 2016

@undisclosed1 (Mr Dearing) Both techniques show the customer the full quotes:)

U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

Thanks for the compliment, though you may owe Mr. Dearing an apology...

Not wishing to upset you anymore, but these statements seem quite opposite in intention.

We break out every quote that goes out the door and we have been told by customers they feel more comfortable with us when comparing our quotes to the one line quotes they get from the competition.

and

One way we have provented this issue is not to give the customer the detailed quote/design to take with them. What I mean is we will sit down with the customer and show them the full design with part numbers but they don't get to take it home with them. We give them a single line item quote to take with them but we keep the full design until they sign with us. This way they have no way shop the design unless they have a photographic memory. We don't do this for every customer only when we think this might happen.

So you only give line item detail to those customers you don't think will shop you and but then those same customers tell you they did and they like it?

Or?

DW
David Westberry
Mar 09, 2016
IPVMU Certified

You could create internal part numbers for the products you are offering and line item them. It is one defense against shopping and gives the numbers needed for an equipment versus labor breakout.

It is a challenging world we operate in.

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MM
Michael Miller
Mar 09, 2016

Undisclosed 1 (D) No worries as no one is upset but Both options show the customer the full broken down quotes. Sometimes when we know others are going to bid on the project we show the customer our full design and quote but we keep all the details. This is something we only do when they quote involves many man hours for the design which includes camera layouts and system layouts. This prevents the customer from shopping our design and using us a free design service. Either way the customer sees the full broken down quotes.

U
Undisclosed #1
Mar 09, 2016
IPVMU Certified

"We break out every quote that goes out the door."

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UM
Undisclosed Manufacturer #5
Mar 13, 2016

Turn the scenario around and ask if you would want a detailed quote on work you were having done?

Example; you decide to remodel a bathroom in your home. Perhaps there are certain things in that remodel you could do yourself, like the painting but maybe it's not worth your time if the quote is for doing that segment is "reasonable".

Likewise, on the parts - perhaps the quote for the shower hardware shows $1,000 - but because of your budget limitations you decide to go with different hardware

I've always found being as transparent with the customer as possible is the best policy. It builds the trust component of the business relationship. In my integration days I rarely lost deals on price, though I know I was never the cheapest

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U
Undisclosed #6
Mar 13, 2016

There is a legitimate need for UNIT prices. As a consultant i use these prices to add or delete end points. Particularly relevant where money is tight. However, my unit price include specific hardware groups that are predefined to include all items and give assumptions as to the variable work conditions (i.e. "moderate labor complexity" as defined by estimating guides). Cable is handled separately with some kind of quantity price with defined conditions (as best as possible). I also work with integrators so that it will not burden them with a lot of math that they don't already have in their proposals.

Bottom line is, i have not had a problem with "unit prices", but i don't won't require itemized price list. Moreover, if a bid is submitted without these unit prices, the proposal will be rejected without review.

Integrators should "consider the source" and understand how these numbers will be used. If you object (as i think you should where itemized lists are required), i would bring your complaint to the attention of the Owner/Procurement agent EARLY in the game. If you submit, put in a number that you can live with, but provide "Conditions" or assumptions that tells the reader the variables on stuff you cannot control (i.e. cable, lift rental, etc).

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U
Undisclosed #6
Mar 13, 2016

There is a legitimate need for UNIT prices. As a consultant i use these prices to add or delete end points. Particularly relevant where money is tight. However, my unit price include specific hardware groups that are predefined to include all items and give assumptions as to the variable work conditions (i.e. "moderate labor complexity" as defined by estimating guides). Cable is handled separately with some kind of quantity price with defined conditions (as best as possible). I also work with integrators so that it will not burden them with a lot of math that they don't already have in their proposals.

Bottom line is, i have not had a problem with "unit prices", but i don't won't require itemized price list. Moreover, if a bid is submitted without these unit prices, the proposal will be rejected without review.

Integrators should "consider the source" and understand how these numbers will be used. If you object (as i think you should where itemized lists are required), i would bring your complaint to the attention of the Owner/Procurement agent EARLY in the game. If you submit, put in a number that you can live with, but provide "Conditions" or assumptions that tells the reader the variables on stuff you cannot control (i.e. cable, lift rental, etc).

U
Undisclosed #7
Mar 13, 2016

My recommendation, assuming you want the business enough to spend the time.

Let's look at a video surveillance example. Budget may be tight and they may want to 'install the cameras' or use a low budget installer' themselves' to save money the next time.

In that case you can break it out, and add 20% (or whatever) to each line item, and tell them you give them a discount for doing it all together. Win win. It saves them time managing multiple contractors with finger pointing, and it saves you time since you are there anyway. They feel they are getting a deal. Your total price is still as competitive as before.

FWIW, I do think it is reasonable to break out parts and labor. That doesn't mean sharing your actual cost for the parts if you buy them at discount. But showing market price for the parts, or a common "market price + reasonable markup for getting the parts and being their bank" makes sense. Once I found a contractor for work on my home who was doubling their parts cost - for something very expensive we could buy off the shelf. We just offered to buy it ourselves. And yes we felt gouged.

Easier to accept a higher hourly rate for qualified labor, than parts price 'gouging'.

I do a lot of contract work and agree it takes time to break out costs. I don't like it either, especially showing an hourly rate, since they can focus on that vs the fact that you do it in half the time as someone else or have a superior result. I only do it when 1) it's easy, or 2) when I really want that business. I tend to show line items costs without showing an hourly rate when possible for new clients, if I know the total cost well.

Good luck.

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Jon Dillabaugh
Mar 13, 2016
Pro Focus LLC

Full disclosure, I didn't read every reply here. Some were too long to hold my interest at this moment.

My opinion here is "why not?" I don't adhere to the bravado BS others here are talking about. Maybe I don't work with this type of customer where I value their gamesmanship for me to ever consider it.

And I say "why not?" because it's your best chance to keep the client. Being honest and disclosing what they need will only earn trust. Denying their requests will only come off negatively. I cannot imagine a scenario where you decline to disclose where their money is going as a positive.

If you are uneasy with your pricing breakdowns, maybe you are overcharging them? If anything, I load up the labor side and show discounted pricing on parts. And the reason why is others can sell parts similar or equal to mine. But, I feel like my labor quality cannot be matched. We really do go above and beyond to give our clients the best work we can on every job. Even if I come in at 10% higher on labor, I can easily justify that. My work is better than ABC Co. They cut corners. Etc.

One last thing I do, I don't list hours or price per hour. I have one line at the end that is qty 1: Installation Labor and Warranty. If they ask, I will provide a breakdown of that. But I haven't been asked yet.

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JH
John Honovich
Mar 14, 2016
IPVM

Seconding Jon D's recommendation:

"If anything, I load up the labor side and show discounted pricing on parts. And the reason why is others can sell parts similar or equal to mine. But, I feel like my labor quality cannot be matched. We really do go above and beyond to give our clients the best work we can on every job. Even if I come in at 10% higher on labor, I can easily justify that. My work is better than ABC Co. They cut corners. Etc."

I'd add that, taking that approach, you can also raise concerns that competitors are trying to gouge on product markups while you do not.

And if the prospect balks on that labor cost, it is pretty clear that the integrator has not done a satisfactory job conveying value, unlike product markups, which is harder for any integrator to convey value.

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U
Undisclosed #1
Mar 14, 2016
IPVMU Certified

...unlike product markups, which is harder for any integrator to convey value.

I agree. Funny thing is though, a higher priced product (assuming customer has no clue on what the markup is) is the easiest sell of all.

Because you can use the "it costs what it costs" and "you get what you pay for" pages from the playbook to justify. But that was yesterday's playbook.

And now it sounds like everyone is more or less giving up the fight for high margins due to Internet shopping.

So I guess only manufacturers can get away with juicy margins now :(

U
Undisclosed #4
Mar 14, 2016

We can all opine about the pros and cons of line item breakout - but in the OP's situation he is being asked for this on future jobs after he has already done other - apparently acceptable - similar installations for this company.

imo, this 'change in policy' has the effect of implying a lack/loss of trust on their part. I'm curious if the company mentioned this at all - as in, 'it aint that we don't trust you, OP... it's just that we've implemented a new company-wide policy, etc, etc."

If they didn't even address this, then it looks more like a simple squeeze play to me.

U
Undisclosed #8
Mar 14, 2016

"Sure not a problem, are you getting other quotes?"

Not a big deal. It's a common common thing to ask for.

CS
Claudia Synnatzschke
Mar 14, 2016
IPVMU Certified

If you want the job the answer is 'Yes Ma'am'. I'm a facility manager and I get a lot of quotes and as someone stated above every other trade breaks out line items.

Yes it may be that I want the breakdown to compare to other quotes. For the most part I want it to make sure that what you are selling me is what I want and what we discussed. I have received quotes from integrators that had 2 lines: - security system $75,000, access control system $50,000. That's it. When I asked what it is that they are selling me the answer was 'what we discussed'. Um... no.

I will and have rejected quotes like that even if they were cheaper by a mile. I'd rather work with someone who is transparent than someone who gives the impression they have something to hide.

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Mark Jones
Mar 14, 2016

This is the response I would expect. You have a job to do and I respect that.

I do have a couple of honest questions for you too. Why do people assume that we are trying to hide something from you? We are hiding something, but we are hiding it from our competitors. We (from our experience) assume you are going to shop us around. We don't consider that fair.

Example. You put out an RFP that has some security expectation (whatever it is). I, being the clever devil that I am, meet or even exceed your expectation, but I do so at a far lower price than the next closest competitor. If I line item my quote, you can take my clever idea and shop it around and get a cheaper price. You benefit from my experience and good, money saving ideas twice - once from me, and again when you show my competitors what I have in mind.

If you give them my roadmap to success, any idiot can write numbers on a paper and beat my bid. It was my idea and I just got the shaft. I, and I am going to assume, many here have had that happen. That is why we push back. I said in the first answer I posted my answer would be no and it often is. But I can also tell you I do line item every day. More often than not, it is required to get the work.

This is not poker, but there sometimes is an element of gamesmanship. In poker, if you want to see my winning hand, you have to match my wager or fold, which means I win without showing my hand. You have to pay to see.

If you want to rebid the job using my clever idea, then please pay me for it. But of course, no one ever does.

We have no protection is my point and no, we don't care for that. This thread and others are really asking for helpful ideas for protecting ourselves and our ideas. The title of the thread is just poorly worded.

While I detest public bids, I do think they are the fairest way to do business. Everyone submits a sealed bid and they are opened publically. There exists no opportunity to shop someone else's intellectual superiority.

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DL
David Lieberman
Mar 14, 2016
IPVMU Certified

Mark, as an end user, it's not about gamesmanship for me at all. It's about making a decision on the use of large dollars from an informed perspective. Consider: when you buy a new car, everything is on the window sticker. If one car looks like another but is $5,000 less, you want to know what the difference is -- you want to be informed. And if the cost is too high, you can decide what's important to -- and what is not -- by looking at the sticker. Imagine if each car sticker had only a total cost. As I mentioned in my other post, seeing the quote broken out gives me the option to pare down the number of components (the number of cameras, for example) if the quote is too high. If I only get a total cost, I can't make an informed decision.

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Mark Jones
Mar 14, 2016

I do understand that Mr. Lieberman, and as I said, I respect it. The gamesmanship I speak of is not between you and I Sir, it is between the other vendors and me.

My clever ideas from the above conversation saves you 7k, but I don't use the ridiculously expensive brand that offers far more in features (that you will never use) than my competitor. I use a different, well-established brand that has 90% of the same ability (and typically still has features you won't really use). I have used it many times in the past successfully.

However, my labor is 30% more per hour than his is because unbeknownst to you, he uses sub-contract labor. My installers are my people. I pay them a wage they can feed their families with, I train them, provide them with health insurance, retain them and they are happy working for you.

If you show another vendor my proposal in any way, they can and will go to school on my clever idea AND save you money using subcontract labor. Your expectations are met so you save the 7K, and because he is using subcontract labor, you save another 30% too. You have saved your corporation lots of money so your evaluations look great, but you could never have done that without me. The other vendor gets work he did not earn with his brain.

I don't know you at all; maybe this is not the way you do business. But I can tell you it does happen, and it happens every day. I can also say again, I do line item quotes all the time, and I do it grudgingly. I can also tell you for certain I have lost business doing it.

I do understand accountability. But I also struggle with why some, not all, have to be pigs about it, and that is what I describe above. Being piggish. They (not you) want to save the 7K and the 30% on labor. Many of us here think they should be satisfied with the 7K. That is our point.

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DL
David Lieberman
Mar 14, 2016
IPVMU Certified

Mark, your 30% higher labor represent a good value for me. Your employees will be more content with their employment, well cared for (insurance, etc.), your turn-over will be less than your competitors which means that they will have more expertise with what you sell and I will have the same technicians who know the history of the equipment at my site.

It would be very helpful for you to share that with your clients, if you don't already (maybe you do).

One aspect that I haven't heard much about in this discussion is the integrator's partnership with the client. I want my integrators to present me with the best options for my environment and tell me why they're the best options. Remember: I speak the language but I don't have the expertise that you have. Working together will bring about the best results.

I truly understand integrators' apprehension regarding breaking out quotes. But my position is that I simply cannot approve a quote without being informed. And when I submit the quote for funding, I need to have answers to any questions that may be asked of me.

Quote comparison does occur, particularly with larger quotes. I compare prices at Target and Costco, as well. I think that has to be expected, but a true partnership in conjunction with good value and your expertise will bring you my repeat business.

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U
Undisclosed #1
Mar 14, 2016
IPVMU Certified

Mark, what you say about stealing IP makes a lot sense, and I appreciate the support, but I must be honest...

The design here isn't for the Elon Musk Hyperloop, it's just a typical parts and labor retail install. Are there product recommendations involved that we're proud of? Sure, but nothing that a competent tech wouldn't come up with.

So, yes, the real reason for avoiding the request is to not get shopped on the Internet, which would likely erode margins to the point where we would decline and let them get an a crappy install.

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Mark Jones
Mar 14, 2016

And I say again, you will get shopped on the internet, and there is no avoiding that. I think we can all assume the internet is here to stay, and I automatically assume a competent controller can find it cheaper anywhere if they look hard enough. I have absolutely no problem with honest and fair competition. Just tell me what the rules are, roll the ball out there and lets play.

My concern is the customer sending my proposal to other vendors(s). That vendor was quoting Milestone and Lenel (no offense to either of those two) and nothing else. Now they are going to quote Hikvision and Paxton instead. (i.e. I happen to know that Paxton has a software interface with Hikvision and they did not know that). The controller tells the other vendor "if you can use the same equipment, use that interface we found out about AND use your cheap labor, you have the job". That is just fundamentally wrong.

If the controller here in this thread can tell me how to put a stop to that, many of us here would honestly be in your debt forever.

DL
David Lieberman
Mar 14, 2016
IPVMU Certified

Claudia, I couldn't agree more. I manage corporate security for the US offices of a global biomed company. I don't accept any quote that's not broken out. Integrators must agree to it in advance of earning our business.

Of course, I care about value and expertise, but I'm also interested in having the option of reducing the number of components if the quote is too high (opting for 5 cameras instead of 7, for example). If you don't break it out, you don't get the job. Period.

"Sure, I can do that. It will take a few hours to completely re-work the quote, and of course, that's billable time... invoice will be payable before delivery of the revised quote. Your move."

I truly don't care whether you charge me for reworking the quote, your quote still needs to be competitive. Charge me for that time? Then reduce it somewhere else. I don't care. Then again, if you had just presented a broken out quote to me initially, you wouldn't have to rework it.

Integrators who refuse to do so in favor of protecting their profit-- that's perfectly understandable. But you are in business and that carries a risk. You can be flexible and get the job, or be rigid and lose it. Period.

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U
Undisclosed #4
Mar 14, 2016

David,

We understand that you require line item pricing as a policy - and if that is a ground rule going in, then most would just play by those rules if they wanted your business - even Mr. Jones (begrudgingly).

I'm curious what your opinion is (as an end user) of the OP's customer changing their position and demanding line item for new jobs when the previous jobs did not require this?

DL
David Lieberman
Mar 14, 2016
IPVMU Certified

Thanks for asking U-4. I think that, unfortunately, the vendor needs to read the circumstances under which the change is occurring.

It is understandable that a customer may begin asking for line items simply because they're getting heat from their management for being less informed about the quote and how the dollars are being spent.

Conversely, if the vendor has had a difficult relationship with the customer, they (the customer) may be simply be taking advantage of the vendor's expertise, and then shopping other vendors, as is the concern of some of the integrators in this discussion.

So, I think it's ok for the customer to change the expectation, but it's also perfectly fine for the vendor to ask what is bringing about the change and ask whether the relationship is in jeopardy.

I mentioned "partnership" in one of my other posts. When you have a close working relationship with the customer (at least, if I am your customer), the threshold before changing vendors will be higher and you will be more able to read the situation. Personally, I'm very direct with my vendors but always respectful. No surprises.

MC
Marty Calhoun
Mar 14, 2016
IPVMU Certified

Not only do I agree, I 110% agree that the majority of the time some other 'hack' who has 1/2 the time I have in the Industry weaseling thru my proposal in a feeble attempt to understand 'how we do it'. We do excellent work. Instead of demanding line items, call references instead! I don't mind listing components but I will never disclose every supplier name or design criteria.

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DL
David Lieberman
Mar 14, 2016
IPVMU Certified

Just a side note....

I think this type of exchange between integrators and end users is invaluable for sharing perspectives from both sides of the transaction and bring about an awareness of our respective concerns. Thanks to John H and the team for providing this forum.

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U
Undisclosed #9
Mar 14, 2016

I deal mainly with Fortune 500 companies, and we have line item pricing on nearly everything we do. Now granted, our clients aren't as likely to shop, however we do have a few customers that do. To defeat this, I often pack more of the pricing in on harder to find items like customized servers, or parts that are much harder for them to find in a general search. If they can google your products, leave those prices lower and let them try to hunt down a more specialized item that probably doesn't google well.

In the end, your profit and ability to stay in business is what is important to keep. You have to make money to survive, and those that don't care about your business are not ones i will go out of my way to put everything out in the open for.

We have some customers that we just openly show our profit margins with, a pre-negotiated price that both we and our customer can agree to. Others are more difficult or the relationship just isnt there, so we handle them a bit differently. If I'm just a number to you, ...

I find for the most part, as long as we keep providing our customer with a level of knowledge and expertise that they can't find elsewhere, and as long as we can provide problem free installations, we don't get much quibbling on our pricing.

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U
Undisclosed #1
Mar 14, 2016
IPVMU Certified

To defeat this, I often pack more of the pricing in on harder to find items like customized servers, or parts that are much harder for them to find in a general search...

Good advice, thanks!

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