Labor costs

Discussion in 'Carpet Q&A' started by Todd H, Aug 15, 2017.

  1. Todd H

    Todd H Pro Member

    Myself and my installers are getting frustrated by the influx of " cheap labor " in the carpet business. Are any other store owners experiencing this? If so what are you doing to combat this or are you jumping on board to maintain profit margins?
     
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  2. Chris 45

    Chris 45 Director of P.R. on some deserted island. I Support TFP

    From an installers point of view I got tired of the cheap rates I was getting paid from shops (because they all jumped on board) vs the cost of living in my area. I moved across the country where it is significantly cheaper to live yet the labor rates are essentially the same. I just gave myself a raise but I had to use the back door. Best part is the installers here get treated with a little respect instead of just being another warm body to kick. Either way, I'm happy.
     
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  3. Mike Antonetti

    Mike Antonetti I Support TFP Senior Member

    What are your installers credentials? I agree retailers are in a tough situation with all the competition.

    Got a call the other day from a homeowner, talked himself out of using me for a demo, at the end he said he wanted a 12$ an hour laborer to remove his tile floors. I said we are a professional service, so it's the homeowners who are trained to get the lowest price. I don't lay Floors, just lay Blame.
     
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  4. kylenelson

    kylenelson You'll find me on the floor I Support TFP Senior Member

    If your quality matches your prices, chances are your reputation will keep you plenty busy. Why worry about being underbid on labor? It's a matter of selling people on why you are WORTH the extra.
     
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  5. kwfloors

    kwfloors Fuzz on the brain Charter Member I Support TFP Senior Member

    It takes the salesman too. If the store doesn't reflect quality and service of their installers, its hard to gain customers trust.
     
  6. Chris 45

    Chris 45 Director of P.R. on some deserted island. I Support TFP

    That sounds good and may be the case for some installers and shops but the reality is that everybody has to be on the same page. Mike nailed it with the customers being trained to try and find the lowest price. It's no different than trying to convince someone to shop at Whole Foods vs Walmart. Not everybody shops at Walmart but they didn't get to be the largest store by selling top dollar items at top dollar prices. Home Depot and Lowes are the same deal.

    Why should they pay more for carpet labor when there are 10 foreigners or new guys trying to break into the business standing in line behind you who are willing to do it for less. And not all of those cheaper installers are necessarily bad installers, they are simply willing to work for less because they know that they will stay busy. Salespeople have a margin to make as well. I know the shop I was pulling out of got hit with people comparing their prices agains Home Depot all the time. Now you got a scared (or greedy) salesperson thinking that they are going to loose the sale. It's a slippery slope and not many people can stay on top let alone even try to stay on top.
    Most just simply want to turn numbers and labor is just the cost of doing business.

    Perfect example is since we moved, our insurance went up about 50%. The wife is going online looking for a cheaper insurance. Not much different than carpet if you ask me.
     
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  7. DLong

    DLong Pro Member

    Every industry I know over the last 15 years and only seen labor prices go down. I don't understand how that works, I dont understand how some of these people can stay in the black. There is a point where you start to ask yourself, is this worth it?
    I was also taught that you want to stay competitive with your competition but not cut their or your throats. It hurts the integrity of the trade. We bust our ass but they want to give us pennies. But the saying is true. You get what you pay for. I try to make my customers understand thart with me they have the assurance and peace of mind that if something does go wrong, Ill be there. Whether its for a service call, or dealing with warranty issues. I don't lie to them about the product their looking at either. If its junk I let them know. Will the guy that is $750.00 cheaper going to do any of that? Probably not, you get the tail light special. Warranty last as long as you see em.
    But if we can teach the new generation of installers just dont sell themselves short among other things, we might be ok.
     
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  8. Jim McClain

    Jim McClain Owner/Founder Administrator

    On your facebook page, you say, "[We'll] beat their price or labor is free!" Seems to me that if you do that, you are either going to cut your competition's throat, or your own. I'm confused. :hmmm:
     
  9. DLong

    DLong Pro Member

    There is a differnce in beating a price and being so low that it can potentiality lower the pay rates of an entire industry. I'm being competitive.
     
  10. kylenelson

    kylenelson You'll find me on the floor I Support TFP Senior Member

    Either way you're driving everything down, right? Someone on here once used to say "bid them high and watch them buy!". You can afford to work less when the work you do is worth more.
     
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  11. Jon Scanlan

    Jon Scanlan That Kiwi Charter Member I Support TFP Senior Member

    Thats the way I read his statement as well
     
  12. Incognito

    Incognito No more Mr. Nice Guy! I Support TFP Senior Member

    Cheap labor isn't going away anytime soon so long as that's what Americans DEMAND. So we all have choices to make as to how to deal with that. Depending on where you are in the country and where you are in your career the choices are quite different.
     
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  13. Chris 45

    Chris 45 Director of P.R. on some deserted island. I Support TFP

    From another category but it definitely applies here:

    This is where the market forces balance themselves out. If you don't have the tools to do the job, you can't do the job. Those that do have the tools are then in a position to charge more. Mike, you are an excellent example regarding having all the necessary dust containment equipment for demo. Sure you had to purchase the equipment up front but that now means that you sure as heck won't be showing up for $12/ hour. Unfortunately most installers don't place enough value on themselves, their skills and equipment to charge more than $12/ hour.

    Something as basic as a van capable of transporting a roll of carpet and multiple rolls of pad is worth something otherwise the customer can pay someone else the $75 delivery fee and I'm showing up in a Subaru.
     
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  14. DLong

    DLong Pro Member

    I see how I can be misinterpret. Where I live I am relatively "new". Where the companies who have been here forever are going to get the business. Where it comes to cost 90% of the time we are all right around the same. I have a set group of prices that I work from. I dont try to go any lower. But with the residential market is so much different than the commercial. I have good intentions but I have to feed my kids and I.
     
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  15. kwfloors

    kwfloors Fuzz on the brain Charter Member I Support TFP Senior Member

    Some customers don't understand that we charge what we charge because of everything we have/need to get the job done.
     
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  16. Chris 45

    Chris 45 Director of P.R. on some deserted island. I Support TFP

    Customers might not understand but your overhead isn't based on what they understand or think the job should pay.
     
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  17. Rob Ahlgrim

    Rob Ahlgrim Pro Member

    I always tell potential customers, you can pay me a little more than Orange or Blue might charge, but I won't be back, you won't have issues, and you'll be very happy with my work. Or, you can pay less, have lots of headaches and problems, fight with them over and over about fixing all the issues, and then probably end up paying me afterall to come in and fix everything the right way.
    Which makes more sense? You get what you pay for.
     
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  18. SteveG

    SteveG Pro Member

    I used to work for a shop that had a whole service department. Now I'm working for an owner that believes in doing it right the first time. The difference is noticeable. You need to pay installers what they're worth and take an appropriate margin on your product. People who want quality will pay for it if you develop the reputation.
     
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