Amer. Standard outside unit: pricing?

[augmendoza]

I understand that many who post replies to this forum are HVAC professionals, and I realize that professionals need to be compensated for their services. But, I do want to have an idea of what kind of pricing should be expected and would like to know what kind of wholesale prices these products are sold for to professionals.

We need another 3-ton evaporator unit for our downstairs system to intall alongside the 3-ton American Standard Allegiance 15 SEER model that was just installed for our upstairs system. We have received quotes for the unit itself in the $3k range.

Does anyone have any guidance as to what the pricing on these units should be, and, even better, what these units sell for at the wholesale level?

[danski0224]

I understand that many who post replies to this forum are HVAC professionals, and I realize that professionals need to be compensated for their services. But, I do want to have an idea of what kind of pricing should be expected and would like to know what kind of wholesale prices these products are sold for to professionals.

We need another 3-ton evaporator unit for our downstairs system to intall alongside the 3-ton American Standard Allegiance 15 SEER model that was just installed for our upstairs system. We have received quotes for the unit itself in the $3k range.

Does anyone have any guidance as to what the pricing on these units should be, and, even better, what these units sell for at the wholesale level?

It is worth whatever you are willing to pay for it. If the quotes you have received are all pretty close, then the unit must be worth that much. You have the choice not to pay and go with something else.

Wholesale pricing does not matter to you. You, not being a dealer, have no right to know.

The wholesale pricing for the unit does not include all of the extras and training needed to install it properly.

It will be a good day when HVAC installers can get a fair price for their work instead of being lowballed by customers/builders that think they are buying a car for "$100 over invoice".

[augmendoza]

I heartily but respectfully disagree with your admonishment of "no right to know." Every sector of our economy has been subject to increased pricing transparency due to the web and aggressive competition [my profession is no different], it's a simple fact of life. Every business must compete in this new enviroment, professionals have a right to safeguard their pricing structure but cannot stop consumers like me from finding out. The quotes I have received have had a breakdown of pricing by labor/installation and the unit itself [though I had to ask.]

My inquiry is an attempt to know my bounds within which to negotiate not yank food off of the serviceman's table. More information on pricing helps fair HVAC professionals and penalizes those who aren't.

[Grady]

The price a dealer pays can vary as widely as that of a consumer. In general, the more equipment a given dealer buys, the better price he gets. Since I don't deal in Am. Std., nor is there even a wholesaler in my area, I could not begin to tell you what their equipment costs. A dealer must warrant his work for anywhere from 30 days to a year, depending on local laws & his own policy if longer than the law requires. HVAC equipment manufacturers usually do not pay for any labor, refrigerant, or consumables if their equipment craps out while under warranty unless the equipment is DUI (defective upon installation). These costs have to be either paid by the consumer or built into the purchase price.

[DNT1]

Typical materials markup for larger contractors is 20% that is a fair amount although some commercial accounts on special agreement blanket contracts get 10% materials markup. I do not agree with the whatever the market will bear mentality, a customer only wants a fair price noone likes to pay to much, and it will eventually catch up to whomever is playing that way!

[danski0224]

If a contractor states that your outdoor unit wholesales at $100.00, what determines a "fair and reasonable" retail price for the unit? Is $120.00 fair, using the "standard 20% markup rule"?

It is no different than a retail store offering a 50% off sale. What exactly is the 50% off of? What is a "retail value"?

Who says that part of the cost of the unit isn't buried in the labor charge? It is just a number.

I can write on a bid that your unit retails at $4000.00, yet, for today only, I am having a 25% off sale. Are you really getting a deal? Traditional retailers play this game all the time. Kohl's "Lowest Price of the Year" on Levi jeans is $1 less than the other 51 weeks. Big deal. That imported faucet at the local Big Box that retails for $199 has a wholesale of $49. That's way more than a 20% markup.

How do you know that your unit does not have manufacturers minimum pricing? Maytag Neptune, some GE, Viking and Sub Zero all have this. It doesn't matter what the wholesale is, the retail price is fixed by the manufacturer. It helps to build a perception of "value" for the customer. In the case of the Neptune appliances, if a store sells one for less, the manufacturer can yank the whole line from the store.

How do you know the point where you are not taking food off the installers table? As someone else mentioned, a dealer that buys 1000 units at a crack gets better pricing than a dealer that buys 10 at a crack. Some shops have higher overhead, others have little or none.

Some install it right, more do not. It takes time to do it right. Time costs money.

There is always someone out there that will do it for less. No reason for me to waste my time on a Wal Mart customer.

[danski0224]

Typical materials markup for larger contractors is 20% that is a fair amount although some commercial accounts on special agreement blanket contracts get 10% materials markup. I do not agree with the whatever the market will bear mentality, a customer only wants a fair price noone likes to pay to much, and it will eventually catch up to whomever is playing that way!

Why not charge what the market will bear? Everyone else does. Do you think that $500,000.00 home really costs that much ($400,000 is 20% off) to build? What if it is a semi-custom tract home done by a national builder? I can guarantee you they are making way more than 20% on that one :D The only ones not making the big money in that deal are the subcontractors cuz the builder squeezes them for every drop of blood they can. That's why homeowners have crappy HVAC systems in their McMansions.

Can you provide equipment, materials and installation at around $1500 a ton? Profit? Good system and installation? Warranty? Heat/cooling while the drywallers plug the system with dust/debris? Is it "fair" that the builder just dictated your price?

It is common practice for big commercial GC's to withhold a percentage from the subs at the end of a job, yet many will never pay out the last little bit. They made their money.

Checked the labor rates at a car dealer lately? Is it "fair" for them to charge $100 plus an hour when you know the mechanic is getting a third or less than that? What about that repair that "books out" at 8 hours, yet you know it takes about 5? Think they will lower the price? Did the dealer pay for the $50,000 worth of tools the mechanic needs to fix your car, or did the mechanic pay for them out of his/her wages?

What makes a lawyer or a doctor worth $450 or more an hour? I can't write an airtight contract or do heart surgery, but what right do they have to tell me that my time is worth 1/10 of theirs, and that is too much? I am every bit the professional that they are.

Why is an athlete worth millions a year, yet teachers an insignificant fraction of that?

Is the record $26 billion profit (yes, that is a b) earned by Exxon/Mobil fair? Seems to me they must be doing ok. So why are the gas prices so high then? Must be what the market will bear. Maybe Peak Oil is in the price somewhere. Could be just plain old greed, too.

Of course no one wants to pay too much, that is why so many things are made in China, and why China has the cash to buy American utility companies while America has billions in debt.

HVAC trade magazines mention an average profit margin of less than 5% in the industry. Who wants to work for that?

A fair price for a contractor and customer will cover the equipment and the labor burden, plus whatever is desired for profit. Lowballers hurt the whole industry.

[DNT1]

What is that old saying something like? A person will only work hard enough so that he does not get fired and a employer will only pay enough that the worker does not quit.