Where does the price for the HVVAC system come from?

13 years ago

Hi.

The internet is a wonderful tool so I went out and priced a Rheem 15PLJ heatpump and a RHKLHM A/H that I was quoted $6900 for the complete install.

It turns out that I can buy the same two pieces of equipment and have them shipped to me for $2700.

We have a difference of $4200. Now I have no problem with taking that $2700 for the equipment and adding another $2700 for the install. That brings us to $5400. Ok, so say I add $600 for two thermostats, and taking out the old equipment, that brings us to $6000.

I am perfectly comfortable with a $6000 price. However, my quote was $6900.

Is my thinking wrong? If so, where and why?

Thanks

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Comments (12)

zippyhvac
13 years ago
Nope, it's not wrong - you can get some significant savings these days due to the internet, that's why the HVAC guys hate it so much. Many expect to get paid like rock-stars for a one or two day job.

I ended up hiring a local guy who was laid-off from a hvac installer to do most of the heavy stuff, including welding the lineset - hoisting the unit into the attic, and attaching the plenums for $500.

The only wrinkle is the warranty - most manufacturers are putting wording into their warranty documents disavowing responsibility for "internet sales" - usually there's a loophole - the dealer you buy from can exchange defective parts with you directly in any case - or you can try to work around it - the company I bought mine from did a "phone order" instead of an "internet order" to get around that restriction... for a few thousand bucks in savings I'll take on a little risk myself.

FWIW, there are some great deals on thermostats on the interwebs as well - spending $300 a copy will likely get you a "High-Definition" touchscreen thermostat if you look a little bit.
bus_driver
13 years ago
While HVAC is not my trade, I have observed many installations in progress and helped in a few. Often unexpected problems arise, such as framing members that must be changed or altered. This is true even in replacing existing systems. The contractor who never expects these nor accounts for them in pricing will not stay in business very long.
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Well, reading the article on the site, I got the impression all of this was included in "cost to contractor". The "profit" was pure profit(?) There's profit of the one job, and then there's the other (less) profit once you start deducting over head expenses*... if all you get is one job there probably won't be any profit at the end of the year. Who here can see the future? Who here thinks I can? Common question I get in the field: So if we repair this unit how long will it last? The over head expenses come every month..... how many do you think there are? (beer and chip money isn't one of them btw.) I am a small one man shop, no store front I operate from my own home. I run a service business in which I come to your home (local only Katy, Texas area). It's not uncommon for my over head expenses to be $50,000 - 80,000 or more a year. *Note this figure DOES NOT include any salary of any kind. What does that mean? 3rd grade math. if what you take in is less than that amount above --- well I wouldn't have lasted as long as I have. Now imagine if I had to meet payroll obligations? Hire a bunch of non skilled people and teach them the ropes. Yeah, there are companies like that out there. Cheapness sells or the 'so called fair price tango'. But in my climate (a hot one) it may be 3 years until you start having problems. Then you can run to the forum boards of the world that go around recommending you get heat load calcs done for your poor ailing 3 year old unit. Sounds like fun to me. People run from the truth, so I don't imagine these words of wisdom to be that popular here or anywhere. --- just keeping it real.
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veesubotee
13 years ago
Well, assuming that your numbers are correct, you've covered the contractors costs. Actually, it doesn't cover all of them. Anyway, is the contractor not entitled to a profit over and above his costs?

If you ever ran a business, you would understand OVERHEAD.

V
tigerdunes
13 years ago
training, warranty, special tools, supplies, a brick and mortar business location, insurance, trucks, benefits, experience, track record/history.

these costs are just that and they are not free.

what are they worth to you-that is the question.

IMO
energy_rater_la
13 years ago
well answered.

next question..does 4 ton unit really weigh 4 tons??

LOL!

best of luck.OP.
lenores
Original Author
13 years ago
Thanks guys...

I agree with everything that was said here.
But would you all say the same if I told you that the contractor quoted me $7900 for the job even though his materials cost was approx. $3000?

While a business should make a profit, at what point does it become excessive, or should the charge be whatever the market will allow, and if the price is too high, then nobody would contact for the job?
tigerdunes
13 years ago
i would say quoting dealer is on high side unless you have left out pertinent details relating to difficulty and scope of work for the install.

as I recall you are in a Florida location which usually is known as a highly competitive marketplace.

IMO
veesubotee
13 years ago
Well, assuming that your numbers are correct, you've covered the contractors costs. Actually, it doesn't cover all of them. Anyway, is the contractor not entitled to a profit over and above his costs?

If you ever ran a business, you would understand OVERHEAD.

V
veesubotee
13 years ago
'I agree with everything that was said here.
But would you all say the same if I told you that the contractor quoted me $7900 for the job even though his materials cost was approx. $3000?"

Did he tell you that was his cost, or are you basing it on the online price? The website will just drop it at your door. What about the labor cost; his, and a helper, or two? How about proper disposal of the old stuff, plus what Tiger added? Again, he is entitled to a profit on those costs.

V
zippyhvac
13 years ago
Where's the "steak" analogy??? I came into this thread looking for the steak analogy and didn't get it yet...

Now ask that same contractor how long it'll take to do the job... Bet you a nickel he'll be in and out in a day...

$4200 / 8 hours = How much per hour???

The final number likely will be more than you pay any other "professional" you hire.

And I'd bet another nickel you'll get corners cut on your install...

That is the HVAC business model.
shifrbv
13 years ago
>It turns out that I can buy the same two pieces of equipment and have them shipped to me for $2700.

Actually internet pricing is inflated too.
veesubotee
13 years ago
So,I guess the online seller shouldn't make a profit. Sheesh.

Where does the price for the HVVAC system come from?

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zippyhvac

bus_driver

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Where does the price for the HVVAC system come from?

Comments (12)

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