At Northstar Plumbing Windsor, we want you to get the most bang for your buck! That's why we offer affordable plumbing services in Windsor and like to educate our customers on their plumbing system, not only on what service is needed and why, but also how much it will cost and how the costs add up.
Beware of Flat Rate Pricing!
Plumbers charge by the hour (time plus material), or they charge by the job (flat-rate).
The question is, "what is fair?" The fairest it can be is this: the consumer pays for what he gets and gets what he pays for, no more, no less. Consequently, the plumber gets paid for his time and his materials—again no more and no less. From a fairness point of view, this is as good as it gets. Time and material is the way to go with repair work, if you want a fair deal for both yourself and the plumber.
Flat rate pricing used to be called “contract price.” Somebody needs to take a close look at where flat rate pricing has come from, as it relates to small repairs. The customer didn't dream this one up.
Flat rate pricing masks high prices until it's too late and you're already on the hook for a $100 to $125 "show-up fee."
The concept of flat rate pricing is this: increase the labor rate significantly, increase the profit margin on all materials sold and make a lot more money. The problem with the concept was that if the customer was aware that the labor rate and the material cost were significantly higher than normal, then they would not agree to pay for it.
The solution was to mask the higher price of both labor and material until it was too late to find another option. This was done by simply not having an hourly rate. With no hourly rate the consumer cannot price shop.
Now the cost of the job could not possibly be known until the plumber had gotten into the house, racked up some kind of charges such as a "show-up fee," "diagnostic fee" or "travel fee"—typically $100 to $125. Only then would customer know the "flat rate" cost of the job. After the customer—you—have taken time off work, wait for the guy to show up, and are already committed to the above minimum fee, you're hit with the giant cost.
You're now leveraged, as you must either accept the contract price and pay the $100 to $125 for nothing of real value, or you go back to the phone book and call another unknown plumber. Neither option is very appealing to someone in this position—damned if you do and damned if you don’t.
Flat rate pricing in most cases means commission paid plumbers. Most flat-rate service companies pay their mechanics on a percentage basis (our own survey).
Do you really want a commissioned sales guy diagnosing the nature of the problem and recommending a remedy?
Wouldn't you rather have a mechanic with no obvious conflict of interest telling you what will be required to remedy the problem? Who is most likely to oversell—a mechanic working by the hour or a salesman getting paid a commission?
As a consumer myself, I prefer hourly mechanics, as the only way they can cheat me is by taking a nap when I am not looking or outright lying about how long the job took to complete.
The bottom line is this: flat rate pricing for residential service and repair work is intentionally designed to dramatically increasing both the customers' cost and the contractor's profit.
Increasing profit is not a new business desire. What is new is the hiding of the cost from the customer until it is too late to do anything about it, and the total disregard for the traditional concept of truthfulness and fairness in customer relations.
As a business owner, I love the idea of increasing my profits and having more money to sock away for my retirement. However, I just can't justify the method of getting there. The flat rate pricing method tends to alienate the customers, as they typically feel that they have been taken advantage of (and they have in many cases).
To request a service and learn more about our pricing, call or email us at Northstar Plumbing Windsor.