# How to be firm on *no* price negotiations



## JoshOnTech (Aug 1, 2017)

I found negotiations with clients on price was always a slippery slope. In case it's useful to someone, here's a way to be firm in emails, on a website or on a bid:

Our company aims to provide exceptional planning, project construction and customer service to every client we work with. In addition to materials and labor, a number of indirect costs including transportation, administration overheads and scheduling are required for a successful job. Our pricing reflects our years of experience estimating projects to provide value without sacrificing on our standards of quality. As such, it’s our policy not to negotiate on price once an estimate has been provided. We thank you for your understanding.


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## griz (Nov 26, 2009)

Everything is negotiable.....

If you do not want to entertain the possibility, someone else will.....


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## JoshOnTech (Aug 1, 2017)

Yes someone will. I just found building up the confidence and policy to give the best price I was willing to up front set a level of respect and trust. I also found clients that tried to negotiate were more likely to demand unreasonable things during the job once they got the idea that everything is negotiable. But, just my experience and I know a lot of people just need to get the next job asap to feed their family. But it's good to think about..


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## griz (Nov 26, 2009)

JoshOnTech said:


> Yes someone will. I just found building up the confidence and policy to give the best price I was willing to up front set a level of respect and trust. I also found clients that tried to negotiate were more likely to demand unreasonable things during the job once they got the idea that everything is negotiable. But, just my experience and I know* a lot of people just need to get the next job asap to feed their family.* But it's good to think about..


Nice try at a jab....

current job is 6.2m that had some serious negotiating.....

sometimes jobs must be negotiated to meet a budget....

i once had a job negotiated from 600k to 525k....

when we were done job finished out a 700k.....

did not need any of them ASAP to feed my family....

If you are one of these guys that think my price is the price and their is no room for negotiation....you are nucking futs and fishing in the wrong pond...


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## Workingmanvan (Feb 27, 2017)

I would never drop my price because someone wants to "negotiate" (haggle) to get the best deal they can. I rarely have this happen, but would just explain to them that I arrive at my price through the cost that the job will take for the time and material costs of it, and I need to charge what I charge if I want to stay in business long term.

If someone has a reaction to a quote of "geez that was a bit more than I was expecting" I can certainly work with them to change certain materials, or the scope of work, break the project down a bit, save one aspect for next year if need be. But that is different than someone just wanting, or expecting, you to lower your price just for them.

If you are constantly running into people who want to negotiate and just beat you down on your price for the same amount of work, that to me indicates a problem with the quality of clients that are contacting you, or the image you present to people. Most likely a combination of the two. Poor marketing or lack or a professional image and demeanor will cause this IMO. If you show up in a beater truck that is unorganized, you have no company shirts or business cards, and say you prefer cash, then expect people to try and haggle you more often, as they see you as just some dude working for a buck. Good customers may give you a chance, but might shop around for someone they can trust a bit more. Iffy customers will see an opportunity to haggle.

And really who has room to haggle? I bid my jobs to get it done and make a profit so I can keep in business. If someone can just drop say 4k off a 20 k job.. either they had a lot of profit and they can still make money, or they don't know how to bid, or they are desperate, and are about to lose money on a job, or make pennies of what they should have.

Best scenario is to be busy enough that you can pass on such jobs.


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## griz (Nov 26, 2009)

Negotiating does not have a dam thing to do with haggling or beating down.

We evidently fish in two VERY different ponds with VERY different clientele.

Your price is your price you are likely to wake up one day at 65 years old, body broken, toiling for wages and wonder what went wrong....

My body is broken, but pretty much everything else went right...:thumbup:


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## Workingmanvan (Feb 27, 2017)

apparently.. it seems what some people call "negotiating" I call haggling. I think that is what the OP was getting at, those that want a lower price to close the deal, without any changes to the work. Not a great idea for a smaller time residential contractor. If you do large commercial projects, then yeah pretty different, and not the world I am in, apart from small subcontracts.

I think if people want to drop a price, and can live with material or scope changes, then that is a healthy negotiation. 

Always good to hear others perspectives on it though..


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## sparehair (Nov 21, 2008)

Negotiating is an opportunity.

Negotiating a small win for the customer can be your way to close a sale. 

Negotiating can be a way to make more money. If they want less then you give it to them, but with a higher profit for you.

Negotiating is a way to figure out what your mark, i mean client, REALLY wants and then finding a way for them to get it from you. For a price.

Are you a shark, or a minnow?

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## Big Johnson (Jun 2, 2017)

.....


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## rrk (Apr 22, 2012)

Institutional work and multifamily housing work is completely different than single family residential work. The 2 cannot be compared for pricing strategies.


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## TimNJ (Sep 7, 2005)

I will do "price adjustments" on a case by case basis.

The deciding factor is economic status.

If you are in a mcmansion and want a break...forget it.

If it is obvious that customer is in pretty dire straits and the work they want done is going to have a sizeable impact on them....I'll see what I can do.


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## TimNJ (Sep 7, 2005)

Big Johnson said:


> .....


 There's a difference between "negotiating"

and F*** You. I don't care what the contract says, I'm only giving you this much.


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## NYgutterguy (Mar 3, 2014)

Most jobs I do Are negotiable. However maybe one in 10 customers actually negotiate


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## cwatbay (Mar 16, 2010)

What a fun topic. I do negotiate myself. But then again, 98% of our work is commercial. 

Negotiate to me is to shrink the scope of work. Or, maybe go with some lower priced materials = lower price equipment and devices. 

The only times I got in front of someone who wanted a lower price for the same work was in residential. And, it's mostly residential where they want a lower price. 

My advantage in these cases is that I was in sales for most of my life. And, I taught sales to potential salespeople. Those that failed in sales, were those that didn't learn the fundamentals and simply based their success on lowering the price to make the sale. Needless to say, they were poor and broke most of the time, and, were constantly asking for higher wages or advances on their pay checks. 

If you can't present yourself in a professional and positive manner, you will have an uphill battle getting people to trust you enough to give you their money and time. You create the atmosphere for a successful sale of your skills and materials. If not, you'll always be making pennies instead of dollars. 

And, before I forget..........be a professional and qualify your clients first.


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## 91782 (Sep 6, 2012)

homeowner: "The bank will only finance $***"

Me: "I can appreciate that. We're firm on our price."

Fewer words. No need to say them unless it comes up.


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## Inner10 (Mar 12, 2009)

I don't typically negotiate, if I do it's just enough to land the job or please the client. Some just need you to throw them a carrot so they don't feel like they are getting hammered.


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## rrk (Apr 22, 2012)

TimNJ said:


> There's a difference between "negotiating"
> 
> and F*** You. I don't care what the contract says, I'm only giving you this much.


Did you ever do any business with him? That is not exactly how he works


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## MarkJames (Nov 25, 2012)

I don't think that was intended as a personal jab.


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## flashheatingand (May 3, 2008)

I have no problem with a little negotiation. Refusal to negotiate can be the reason one didn't land the job., It's a perception to many, that "you" will not be agreeable to work with, especially if there are setbacks or obstacles.


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## KAP (Feb 19, 2011)

Seems to be confusion on what the term "negotiable" means here as it relates to the varying replies...

While commercial and residential certainly are two different animals, if you're dropping your pants to buy business without the customer giving up something in return, they have no idea how deep that discount well goes and whether or not the new number is the "real" number and could very well be the impetus of the reason to get more quotes... 

One simple way to get this out of the way is setting the expectation upfront is that the number you provide is the actual number because you don't play pricing games like fake manager discounts, inflating the price only to lower it, giving a low-ball price that doesn't cover all the work to get you to sign but then getting flooded with change orders after the fact... the price will include everything as discussed to complete the project and it will either make sense or it won't... the only time a change order will be submitted is for things that changed or are added from the original order...

The ONLY real places you can lower the price without making changes is taking it directly from the profit of your company or out of your pocket, that, or working twice as hard to get it done early to make it up the labor/profit savings you gave away to buy the job... for some reason, everyone else (i.e. - suppliers, subs, permits/inspectors, etc.) still expects to be paid no matter how much you lowered YOUR price...

We've all had circumstances where we had to work for less money or fill a schedule void, and is one of the reasons WHY we have profit, and is a trade-off from time to time, but as a business practice, it's a loser... is it any coincidence that Mr. Murphy seems to know EXACTLY which jobs you do this on?... :whistling :laughing:


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## JoshOnTech (Aug 1, 2017)

and to that picture, wow. I never thought this thread would come to this.. haha


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## rrk (Apr 22, 2012)

TimNJ said:


> My friend was a super on the Taj Mahal.


I 've met him a few times done work at some of his buildings and at his parents house, never a problem. Treated everyone well and paid in full. His mother was very very nice.


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## TimNJ (Sep 7, 2005)

Next time you see him ask him where he bought all his trees for his golf course in Bedminster.


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## Jaws (Dec 20, 2010)

Of course their is negotiating. It does not mean I just lower my price to whatever their budget Is, it means the scope of work gets tailored towards their budget. Commercial jobs their is value engineering on every job. 

Many jobs just aren't a good fit for us or we to it. Certainly can't do them all.


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## kirkdc (Feb 16, 2017)

Mordekyle said:


> Sent from my iPhone using Tapatalk


I guess I asked for it.


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## rrk (Apr 22, 2012)

Jaws said:


> Of course their is negotiating. It does not mean I just lower my price to whatever their budget Is, it means the scope of work gets tailored towards their budget. Commercial jobs their is value engineering on every job.
> 
> Many jobs just aren't a good fit for us or we to it. Certainly can't do them all.


I will negotiate scope all day long, not price alone


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## sparehair (Nov 21, 2008)

One thing that helps me know where to draw the line is that my prices are posted publically on my website. 

Just like McDonalds, you want x it costs y. People are trained to respect signs.

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## avenge (Sep 25, 2008)

I'm never asked to negotiate.


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## KAP (Feb 19, 2011)

avenge said:


> I'm never asked to negotiate.


One of the best things about addressing pricing issues and approaches upfront is it negates the idea that you will give up something for nothing and rather places the focus on and reinforces where it should be... adjustment in price equals adjustment in scope... 

Giving up money without changing the scope or the customer giving up something in return is not negotiating but rather a one-sided steal from your profit or pocket and acquiescence of the fact that you were trying to charge them more in the first place than you would accept... once you cross that line, they simply don't know how deep that well goes... 

Can't blame them at that point for for wanting to find out how deep the discount well actually is through you or other bids...


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## Jaws (Dec 20, 2010)

KAP said:


> One of the best things about addressing pricing issues and approaches upfront is it negates the idea that you will give up something for nothing and rather places the focus on and reinforces where it should be... adjustment in price equals adjustment in scope...
> 
> Giving up money without changing the scope or the customer giving up something in return is not negotiating but rather a one-sided steal from your profit or pocket and acquiescence of the fact that you were trying to charge them more in the first place than you would accept... once you cross that line, they simply don't know how deep that well goes...
> 
> Can't blame them at that point for for wanting to find out how deep the discount well actually is through you or other bids...


On custom residential, primarily pretty high end, I can't remember the last time I reduced price without changing the scope. 2010? I was probably 27 or 28. Many of my clients it's more than they want to spend but even if they reduce the scope they still do those items as changes to the scope later and pay full price. 



Commercial is more about tailoring scope to fit the budget. I'll do well over 7 figures for one company this year and every job over 150k we sit down and go over schedule of values and do some value engineering. Sometimes some of my contigency gets cut as I get more comfortable with the project but what I expect to net doesn't. 

I do however know a several gentleman very well who negotiate very job. One built 20 homes a year in Bastrop for years and years and is sitting on millions. I trimmed probably 40 starter homes for him. 

My old boss in commercial has a 2 million dollar beach house and a 700 acre ranch and is fully retired now. I 've seen him cut his net many times to get a job.

Another younger guy builds 40 homes a year in New Bransfuels. He probably makes 6-800k or more a year. He negotiates every job almost including specs. I am going to check ouf his operstion as a guest in a few months. Great guy. 

All those guys are millionaires. I dont know about you but I'm not a millionaire. Maybe we are ****ing up. Lol. What works for one will not necessarily work for another. 

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## KAP (Feb 19, 2011)

Jaws said:


> On custom residential, primarily pretty high end, I can't remember the last time I reduced price without changing the scope. 2010? I was probably 27 or 28. Many of July clients it's more than they want to spend but even if they reduce the scope they still do those items as changes to the scope later and pay full price.
> 
> 
> 
> ...


Based on what you posted they most likely got to be millionaires knowing what line couldn't be crossed and padding it past that point...

That's certainly a pricing strategy (i.e. - build in the discount to be able to drop making them think they got some sort of a deal - which was what we did many years ago incorrectly thinking we were like retail), but I highly doubt they dropped their pants below a line they couldn't cross and if they took it on near that line, it was either because they had the capital reserves to support and/or absorb it from profit gleaned from previous jobs or they found a productivity path that gave them some leeway... are there jobs we've all taken at a lower profit because you gotta' do what you gotta' do? Sure, but millionaire don't become millionaires by crossing the line where they lose money as an ongoing business practice...

Heck, if the line doesn't matter, EVERYONE is a customer, right?... :whistling

We all know you can make money many different ways in our industry... just found life much easier and more profitable to focus on the customers that can support our services NOT trying to race to the bottom being the cheapest and thinking by doing so you can serve a wider audience through a retail mindset... BTDT... and that's like looking at a lake and thinking the whole lake is great for fishing as opposed to learning how to find the best fishing holes... 

All about where you set or can support that line... whatever works for you...


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## Jaws (Dec 20, 2010)

Never said there wasn't a line. 

Any good contractor should have the operating capital to make survival decisions or be working toward that. People wonder how I keep employees and even subs so long with almost no turnover except for a few who went on their own, I have certainly "bought" a few jobs in tough times. 

I am in agreement with you as far as business model but ours ain't the only way. Besides negotiating price those guys also set prices for subs and I don't do that either. All my subs I think would say I go out of my way to make sure they make money. 

My point is if contractor A wants to make 185k a year and is established and cherry picks jobs and says I'll only do cost plus 20%, paid for PM, mark up on labor ect and wants to be paid for bids. He does what he wants never negotiates. 

Contractor B wants to make as much actual money as humanly ****ing possible and if he needs to sell some **** at cost plus plus 12 % to get 20.jobs in one neighborhood and he makes 3 times as much as contractor A who's wrong? 

To me nobody. Different strokes. 

One of my sparkys has 30+ men and charges about 25% less than another sparky I use who has 5 men. I'd say the guy with thirty guys makes a lot more I've been to both their houses, but who knows? Both are happy with their business model.


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## NYgutterguy (Mar 3, 2014)

KAP said:


> Based on what you posted they most likely got to be millionaires knowing what line couldn't be crossed and padding it past that point...
> 
> That's certainly a pricing strategy (i.e. - build in the discount to be able to drop making them think they got some sort of a deal - which was what we did many years ago incorrectly thinking we were like retail), but I highly doubt they dropped their pants below a line they couldn't cross and if they took it on near that line, it was either because they had the capital reserves to support and/or absorb it from profit gleaned from previous jobs or they found a productivity path that gave them some leeway... are there jobs we've all taken at a lower profit because you gotta' do what you gotta' do? Sure, but millionaire don't become millionaires by crossing the line where they lose money as an ongoing business practice...
> 
> ...


I guess what keeps jamming me up about no negotiating is im negotiating over 100's of dollars max usually. Some of you guys are negotiating over $1000's and possibly 10's of Thousands of dollars. Big difference. My personal profit is 35-40%. I Wouldntever be able to drop if i was only making a tiny bit of every house..


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## Calidecks (Nov 19, 2011)

The decks I build are not for a poor person without money looking to have it replaced because they can't walk on it. It's more than likely a luxury to take advantage of a 2 million dollar view. My standard line is. "I'm just too busy to give anything away". Although I've been known to wiggle. 

_________________


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## Windycity (Oct 3, 2015)

NYgutterguy said:


> I dropped $150 the other day to put $1600 my pocket. Instead of making $1750(my cut after all overhead ) for the job in 3 hours. I'm such a sucker  No problem giving up a few bucks to make that much.
> 
> 
> Sent from my iPhone using Tapatalk




Damm i knew I should have gotten into the gutter business instead of brickwork! Oh wait i made a customer happy recently by dropping $150 on a chimney that i highballed because i was busy and made almost 2g after expenses in a short day.. haha


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## Fouthgeneration (Jan 7, 2014)

Is your calendar full? Giving a discount then paying O. T. out of your normal profit % is silly....

Can you trade start and finish windows or even a space available status for a slight discount, to improve your year-end net?

Extra-ordinary access to the job, use of front yards, no saving landscaping etc... Pre payment in full to you or to an escrow fund.
Barter for NEEDED services and or Materials, accounting, legal work, plumbing etc.... a new truck... real estate...

Avoiding laying off your lead men, for a few points.... Saving $ on Payroll downstream for years..

Is fixed costs low enough you aren't forced to work to service notes and leases? The rental equipment can go back to the owner, The payments are still due monthly on the stuff not paid for, and the stuff that is paid for isn't earning any $, it is money buried in your yard at Zero interest or negative as its getting a day older everyday.

A few hours with a spreadsheet should give you some # to guide decision making regarding fixed and variable costs.

Good records allow you to pick the items to cut that you lose the least profit on

I always ASK for a discount, unless it would cost me downstream, surprisingly many times you will get one...

Most hagglers can be identified prior to pricing, add a % or two for trading, unless the job was bid, NO HAGGLING on bids. It is unfair to use both methods of pricing in the customers favor, IMO. 

Regarding the Post above with the two Electric contractors, It takes a whole different level of management skills to lead 30 men then 5 men, especially when most of the time they are at different locations, and or quality lieutenants as foremen.


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## NYgutterguy (Mar 3, 2014)

This house was started at 130 yesterday on way home. Finished at 4. I made 40% of 2900.00. Was the last job of the day during a busy week. Everyone has their own ways of running a business. Not bragging just stating numbers...Ain't America grand ?










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## NYgutterguy (Mar 3, 2014)

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## Fouthgeneration (Jan 7, 2014)

I hope you don't live to regret posting the above.:wheelchair:

But love the honesty.

Put a little bit in the rainy day fund... Maybe?

They paid for labor directed with decades of experience... fair price.


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## NYgutterguy (Mar 3, 2014)

Fouthgeneration said:


> I hope you don't live to regret posting the above.:wheelchair:
> 
> 
> 
> But love the honesty.




2 of us doing for over 25 years and a helper with me for 17. All about repetition. Monday they will go do their two jobs and I will play salesman. Thanks for the jinx 


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