Quote:
Originally posted by sdinenno
Of course, in the case of landscapers, we have to figure in the cost of labor for the replacement as well as plant material.
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Ok... for discussion sake here...
Do you mark all your plant materials up 100% ??
If you have a one year warranty on your plant materials and you want to figure the cost of labor as well...
Tree at cost $ 125.00
Mininmum Labor to Install 3 man hours at $ 36.00 per hour COST = $ 108.00
So we have a cost of $ 233.00 to replace that tree. It is actually more than that, because you have lsot the opportunity to make net profit on that cost, so you should add another 30% to recover the net profit SOMEWHERE...
On my replacements, I have the 6% mortality rate baked in. What I don't do is factor ANY labor for those replacements.
If I did, I would have to figure 6% of the labor for the installation of the plants and add that as a potential labor cost down the road.
I go back and charge the orginal job cost for the labor, which is effectively subtracting the warranty labor and materials from the orginal net profit.
In my market you have to bid sharp, and that extra 6% on the warranty labor may make you non competitive if that happens to be the case.
We have very little retail nursery presence and activity in the greater Portland areas. Big boxes dominate.
I still do not understand how you can guarantee a product that is perishable and subject to an unknown number of variable problems and blindly say you WILL replace it even if the maintenance guy aced it out, if it does not get water for a month ??
What if the landscape does not get water for a month in July and the whole damn thing dies ??
Every frigging plant on the job. Are you going to go back, buy all new plants, and reinstall them, only to go through the same thing again ??
Who could take that kind of a hit ??
A maintenance contract is like an extended warranty....if I control it, I will stand behind it.