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Fascinating...

Constantin
Constantin Member Posts: 3,782
selling to anyone that walks up to the local supply counter, I decided to fire up my web-browser and see what the global marketplace is willing to provide. The results are fairly sobering.

While some brands do not appear on <a href="http://search.ebay.com/boiler">e-bay under "boiler"</a> (today), plenty others do, including (in alphabetical order)
<ul><li>Buderus</li>
<li>Crown</li>
<li>HTP</li>
<li>New Yorker (i.e. Burnham)</li>
<li>NTI</li>
<li>Peerless</li>
<li>Weil McLain</li>
<li>Etc.</li></ul>

This is all for new, still-in-the-box equipment that typically is not sold at auction but at "buy it now" prices. This sort of stuff must give contractors the hives because homeowners will be more easily able to tell what the wholesale price is... and challenge the installers on that price accordingly.

One particularly frightening online store in PA goes as far as offering online heatloss calculations that cannot have any bearing in reality, even selling split AC systems, furnaces, boilers, etc. to the general public with nothing more than the admonition to have an expert verify that the equipment is running well once it has been installed. Wow!

The impression I get from my 5-minute foray into e-Bay is that far more brands suffer from loose distribution policies than some people's favorite whipping boy HTP. At the end of the day, their distribution does not seem to be any looser than that of the rest of the industry.

Comments

  • Mark Eatherton1
    Mark Eatherton1 Member Posts: 2,542
    If you think thats scary....

    try putting PEX tubing into their search engine and see what comes back. It's quite obvious that many of these people are employees grabbing oddball excess stock and selling it on EBay, but in some cases, its new tubing right off the extruders.

    This internet thing really changes the way people (used to) do business.

    ME

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  • Constantin
    Constantin Member Posts: 3,782
    Absolutely...

    ... the reason I really wanted to look into the prevalence of boiler resale via the web is that I have a little theory re: the number of incorrect/problematic Munchkin installs that Gary Wallace lamented about two weeks ago. I see the vast number of boilers available on the web as proof that it is not a loose distribution policy by itself that is leading to the high number of "bad" Munchkin installs.

    Were that theory true, then we'd see a lot of problematic New Yorker, Buderus, etc. installs as well. Now, it is entirely possible that a Munchkin is more finicky than a WM Ultra or CI boiler to install correctly, but there may be more at work here than the equipment itself.

    I would like to propose that there is an element of self-selection at work here WRT the number of objectionable Munchkin installs. Because this web forum has a lot of Munchkin-related posts, it shows up rather quickly in search engines like Google, thus self-perpetuating the cycle of problematic Munchkin installs posted here. In other words, the more we write about Munchkins, the more people will come here for Munchkin advice.

    As for the impact of the internet on the boiler business, I think Mr. Ebels hit the nail on the head in his series of posts on the troubles that have beset the traditional supply chain . Maybe there will be a day when installers will go to a direct-ship model. Perhaps they will even resort to a cost-plus model where no money is made on equipment purchases and the billing rates are simply cranked up to compensate. There are lots of ways to make money.
  • mark_40
    mark_40 Member Posts: 65
    Crank Up Billing Rates ?????

    C'mon ....do you really think a H.O. that just bought the boiler direct is gonna pay $ 120/ hour ?? as it is, only the profit on equipment sales is keeping the labor rate at a level essentially sold at cost ....what is gonna happen is just more HACK installs .... can't you see this ??
  • Mark   Eatherton
    Mark Eatherton Member Posts: 49
    They will....

    if they want to do business with me...

    Ya can pay me now, or ya can pay me later, twice!!

    If you can't afford to have it done right the first time, just WHERE the heck are you going to find the money AND the TIME to do it a second time??

    ME
  • joel_20
    joel_20 Member Posts: 4
    they will pay

    If we are not stupid fools and go out and do it for free!!!!! Think about it. I got asked yesterday "Please break that quote down for us in terms of parts and labor" My answer was a question, "Why? It will be the same price either way". If you break it down they will complain that either the equipment or the labor is too much either way you loose. Why argue with those folks , just politely tell them to find someone else.Besides, you have to make sure your really making money on your labor anyhow. What happens if it's a labor intensive job and you make all your profit on material?? You'll loose your shirt on the labor intensive job if you take it right? So Make sure you make all your money on the labor.
  • Don Walsh
    Don Walsh Member Posts: 131
    Hacks your Hickey!

    Why would anyone that runs a legitimate "for profit" business even care what the so called "Hacks" are doing? They have no impact on your business at all. The customer base they are servicing (and that is a charitable description of their activities) is not one that you would get, or even want for that matter. The person that buys his own equipment, from whatever source, then tries to get it installed for labor only is as big a fool as the jerk that finally does the install. The homeowner deludes himself into thinking he saved money when in fact he spent good hard cash for a substandard installation, and the Hack that installed it for labor only has no concept of "Pricing for Profit", he is out of business already, but just doesn't know it yet.

    If you're in this business as a contractor, you need to learn and truly understand the cost of doing business and how to make a profit. If you are not willing to do this, then you will make a far better living for yourself and family by working for someone else, someone who does understand the concept.

    As a contractor you are not going to get "all" the jobs, nor would you want them. Go after work that allows you to exhibit your skills and craftmanship, and price your work accordingly. The customer that knows and understands what quality is, will embrace your efforts and will pay your price.

    Finally if you are a contractor that finds that your distributor is selling equipment to everyone that walks through his door, then it is your turn to step up to the plate and close your account with them. Make damned sure you send them a letter expressing your position, and by all means send copies of the letter to the manufacturers as well. There are far too many other sources of supply for the same products, for you to continue to support a company that is working against you.

    As a contractor, I get calls quite often from people that have tried to beat the system, the install is botched, the house doesn't heat, the installer refuses to respond to their calls. Well, let me tell you straight up, they pay very serious money for my corrective talents. As ME said, you can pay me now, or pay me later! But pay you will!

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  • This runs DEEP

    I'll re-read this thread tomorrow and think carefully this time (emotionless) before responding.

    Boy Constantine! You really know how to stir things up.

    Why?

    Gary

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  • Constantin
    Constantin Member Posts: 3,782
    Whoa!

    Folks,
    I am not trying to stir up a hornets nest as has been suggested. Nor do I advocate changing the business model of a installer. Perhaps I stated the obvious when I observed how price discovery (and even equipment purchases) via the internet is becoming easier and easier. I speculated that this may have an impact on the installer business, that new ways to compensate may need to be found, but certainly did not advocate any hard and fast rules on how to go about it.

    I agree that the great risk with cost-plus installs is allowing more hacks to do their dirty deeds in the basements of America. But how to deal with price-discovery? More and more consumers are becoming savvy to the internet and, there is a lot of price discovery data out there via websites that will sell their wares to anyone.

    Worse, sites like AlpineAir put together impressive (but deceptive) lists of HVAC professionals that, allegedly, will only be too happy to make $200 by merely finishing off a split AC install. Their installation video and web site gives the consumer the wrong impression that HVAC work is very simple, that anyone can do 90% of it, and that doing so will save them a lot of money. None of which is true, of course.

    Some contractors can avoid the whole issue simply by walking away from jobs where homeowners try to henpeck the contractor to death on equipment prices. This may be the best approach (as installation labor and materials cannot be separated, the two always come together).

    On the other hand, what about the homeowner that tries to engage you because they really want you to do the install but have a spending limit? What if all they would like to do is explore using a ceramic-lined IDWH instead of a stainless one?

    As some of you have suggested in the past, perhaps offering a good, better, best system is the best means of covering the bases... if retaining customers at all spending levels is your priority. of course. Give the consumer 3 price/benefit points to think about, highlight the differences, then let the consumer make a (hopefully) informed decision.
  • Darin Cook_3
    Darin Cook_3 Member Posts: 389
    AHMEN

    This is powerful and entirely the TRUTH. That post is like a book out of the bible. Grumpy, I felt like you were reading my mind. That is one of the best posts I have read here in a long time. Thank You!!





    Darin
  • Dean_7
    Dean_7 Member Posts: 192
    paying

    Maybe there is a lesson here. I have friends who go to casino's frequently and they always tell me how much they won. That is until I ask them how much they spent to win what they did. Almost always they say they spent more then they won in other words they lost money. The trick is getting people to see things as they truely are not as they appear to be. Educated consumers usually don't mind paying the true cost of something because they know what they are getting for that cost. The hard part is educating people. True professionals take the time to do so and usually come out ahead in the end. The contractor who installed my boiler didn't quote the lowest price but he knew what he was doing and he knew that I knew too. That's why he got the job.
  • Constantin
    Constantin Member Posts: 3,782
    Totally agree...

    There is no point in competing with hacks if you run a legitimate business. Furthermore, you make a great point regarding not trying to get every job, focusing instead on the jobs that make your skill and knowledge shine all while being paid a commensurately.

    I also agree that you ought to take your business away from supply houses that will supply complete heating systems to anyone that walks in with a credit card. As you point out, many homeowners that think they're beating the system end up paying far more to have their system fixed. I hope that more contractors like yourself put pressure on supply houses and manufacturers alike to keep potentially dangerous appliances out of the hands of unqualified installers.
  • heatboy
    heatboy Member Posts: 1,468
    This is the least......

    of my concerns. People who buy boilers, tube, controls, blah, blah, over the Internet or other avenues, have no interest in hiring me anyway, so it's a waste of energy being concerned over it. I have bigger issues with manufacturer's employees actually selling boilers around me to the end user and then trying to install said boiler and systems. Then they wonder why I won't offer their equipment. This is not isolated to just manufacturers. There are manufacturer's reps in my area that have become jobbers instead of just representing these products. They assemble the components and find some flunky contractor who doesn't know how to do it himself. I know these people read The Wall, so I'm drawing the line here. Stop or I'll let everyone know who you are and what you are doing. These are the people that affect my livelyhood, not DIYers or Internet buyers and I've had enough of it.

    Please don't hand me any crap about pull through marketing or lack of quality contractors. We are out here, but we won't tolerate this kind of behavior from everyone above us in the distribution chain.

    hb
    heatboy



    The Radiant Whisperer





    "The laws of physics will outweigh the laws of ecomomics every time."
  • Mark Hunt
    Mark Hunt Member Posts: 4,909
    Funny this post should come up


    I just got off the phone with a gentleman that purchased a Munchkin T-80 from Johnstone Supply and installed it himself.

    He called us because he needs to have it set up for LP gas.

    The T-80 is equipped with a Dunns(sp?) valve and does NOT require an orifice change.

    The LP supplier has informed the customer that they have a "conversion kit" ordered and will convert the unit for him?!?!

    This is how problems start.

    Mark H

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  • Constantin
    Constantin Member Posts: 3,782
    Good Points!

    BTW, I had the chance to marvel at yet another of your installs today. It was a real treat to see how well everything fit on that wall.
  • RB_2
    RB_2 Member Posts: 272
    Distribution trends

    Thought this slide from our archives would tweak some interest...can you say 'leap frog'?

    I'm loving the whole evolution of our industry - it’s a fascinating study in strategy and tactics...who will live - who will die? Who is leading - who will be left behind? What makes sense - what is plain suicide? It’s a real challenge without any clear answers for anyone in the food chain… can’t see the reputable manufacturers ever using their brands to bypass the loyal customer base…but the newcomers who have nothing to offer but price have nothing to lose…as they say – keep your eyes on your fries…history is paved with business who died selling on price alone.
  • Tom_35
    Tom_35 Member Posts: 265
    Customer furnishing equipment

    I live in Ft. Smith, AR, where the Rheem/Ruud HVAC factory is located. Their employees are allowed to purchase equipment for their own "personal homes" at an incredibly low price---lower than the distributor's cost. They then provide the equipment to a friend, relative, etc.

    Sometimes the buyer will call a licensed contractor to install the equipment, and some contractors willingly sell a small amount of materials and their labor. If our company does an install, we deduct our COST of the equipment only, and then submit the price. We also will warrant only our installation, nothing on the equipment. If there is any type of service problem during the normal warranty period, the customer pays our street rate.

    99% of the time, our company does not do the work.

    TA
  • Firedragon_4
    Firedragon_4 Member Posts: 1,436
    It's not just new guys

    who are promoting retail sales, it's very established long-term and two-faced OEM's, wholesalers and reps.

    I really don't care anymore since I truly believe in 'what goes around, comes around'. I only buy 'trade products' and will continue to switch as many times as it takes to find them, that IMO, is the bottom line. My survival and profit, not a 'fast buck'. Tradesmen rule!
  • mark_40
    mark_40 Member Posts: 65
    now, now Grumpy .....

    i certainly am not interested in the H.O. that want a hack install anyways ... i don't even do residential work, except those jobs you can't avoid .. you know, big shot at a industrial plats home, cottage, whatever ...

    the problem tho ... is the "dilution" of our trade ....when i first started in this field in 1977 ... there were no side jobs .........hell, to buy a furnace as a mechanic, it had to be charged to the company you worked for ....

    co-incedentially , i don't ever remember seasonal lay-offs, companies offered full health care, retirement benifits, etc ...

    you can only divvy-up the pie so many times ! ..each and every side job, hack job ... well, it takes away a job a legitimate company coulda performed .....

    look at the plummers .. they lost control of fixture sales ...i wonder how many calls they get to install crap bought at HomeCheapo ???
  • Don Walsh
    Don Walsh Member Posts: 131
    In rebuttal

    The population of the USA in 1977 was 219,000,000. The population today is over 290,000,000. A 30% increase in just 27 short years. We have, in that period of time, undergone a near total restructuring of our total economic system. People are now competing globally for the same goods and services that were previously the sole province of the US manufacturing base. That has had a profound impact on the way we now must do business. In order to maintain some semblance of parity with the rest of the world, business has had to restructure to become as competitive as possible. The primary effect has be the erosion of the standard of living that existed in 1977, companies can no longer afford to pay high wages and benefits to a work force that is either unwilling or incapable of increasing productivity to a point that would, at a minimum, offset the pressures of inflation. As a result, companies have been force to curtail or eliminate the expansion of employee costs (i.e. benefits and wage increases) Most have found that in order to survive and return a profit to the stockholders, it became necessary to pare employees, reduce wages, eliminate benefits for many, or to ask for participation by the workforce in sharing the burden of benefit costs. This generaly came in the form of higher deductibles and larger co-pay amounts.

    Manufacturers found that it was imperative to increase the volume of business by which they could spread the cost of operations over a larger number of product units. To do this meant to open the market to a wider consumer base; and in so doing, restrictions on distribution had to be eased. Hence, the current availability of the very products we use daily from sources such as Home Depot and the similar ilk. Your once restrictive distributor has also fallen prey to the same circumstances. He therefor, is more willing to sell the product wherever possible and to whomever with the money in hand.

    All of which brings me back to the point of the whether or not a "quaility contractor" is impacted by the proliferation of "hacks." I still maintain that he is not. In an ever expanding market (the "pie" is still growing) the astute businessman can become far more selective of whom he chooses to work for, all the while being inundated with more requests for his services than he can honor in a capable manner.

    Each of us has his own yardstick for measuring success in this business. Where one may feel compelled to install every job in the county, others of us might prefer to have 30-40 exceptionally high quality installations per year. I choose to be among the latter, and as such, do not believe I will ever be impacted by some "hack" operation.

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  • Paul Pollets
    Paul Pollets Member Posts: 3,428
    Profit

    Profit should be made on the cost of labor, the cost of materials and the cost of overhead. We look to a min. of 15% on any new construction project, 30% on service. Since many contractors are still stuck on how to calculate the correct selling price, the industry as a whole, undercharges in relationship to any other business. I don't want to make the profit only on labor. Is that what I am...a labor broker? All of our projects are labor intensive. We also politely refuse to install "owner provided" materials so we don't get involved in arguing the per hr. cost of mechanical contracting. We do fix these projects occaisionally. The Internet will surely be a source of any heating materials, without regard to who is purchasing. So what?? Just because I can buy a scalpel and a hemostat online, doesn't mean I'm capable of doing surgery. BTW,I'm in agreement with holding the flat-rate price, and not breaking it into parts & labor. Doing that just gives the customer more ammunition to direct at the contractor.

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  • mark_40
    mark_40 Member Posts: 65
    your missing !

    my point ! ... which is "dilution" of the trade ........yes, it's nice that hacks don't influence your world .....But ... they take work away from other Legitimate contractors ... feeding the cycle of Hack after Hack ... if this Trade does not protect equipment sales, thru
    'Ho'saler boycott, ie Johnstone .. manufacturer boycott, ie Trane / H.D. ...or lisencing/ permit process ... we , too will go the way of the plummers ...Mr. Grumpy ..
  • Don Walsh
    Don Walsh Member Posts: 131
    Heating vs hamburgers

    Funny thing is that just "anyone" can go buy a cow. McDonald's, for example, hack and grind and smash it then sell it for $.79 with a pickle slice thrown in. Others, like the Westin St.Francis in San Francisco, hack and grind and smash it too, but they sell it for $25 a pop. Do you hear the Westin folks bemoaning the mass availability of cows?

    Granted, we would all like to live and do business in some idyllic place where the access of others to our product was restricted, but we don't and that isn't going to change in the near future. While everyone else can sell the beef, some of us have learned how to sell the sizzle.

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  • RB_2
    RB_2 Member Posts: 272
    ...and thats why its time to ...

    ... change the definition of what we do.

    I have said this before, a tinsmith, plumber, pipe fitter are not the right words to describe the skills and talents of those here on the Wall who are responsible for ones health, wellness and comfort. We don't call a cabinetmaker a framer or cribber do we?

    Consider this from the World Health Organization:

    For many years, the housing environment has been acknowledged as one of the main settings that affects human health.

    The private dwelling represents the last refuge and the safe haven for any resident. It is the place where an individual can express his or her own beliefs, and be protected from any outside influence.

    If inadequate housing conditions challenge or reduce this benefit of dwelling, serious health effects can be provoked. It has been found that there are many mechanisms that may affect the mental health status, and the individual perception of one’s residential quality.
    Housing conditions represent a major part of the environment that people live in day by day. Especially for children, elderly and persons with physical limitations, the home represents the centre of life.

    Inadequate housing conditions can be caused by the insufficient provision of a variety of factors (e.g. hygiene amenities, air quality, living space, heating and insulation, maintenance, safety and security etc.) as well as by exposure to noise, moulds or infestations.
    Health impacts of inadequate housing conditions can be found in a magnitude of expressions on physical, social and mental health. Housing being a part of the physical and the social environment, it was decided to develop a set of housing and health indicators as a sub-set of the EH Indicators.


    ___________________________________________________________



    By the way, the WHO defines health care as any type of services provided by professionals or paraprofessionals with an impact on health status.
    So most of the folks I know posting to the Wall fall into the category of health professional and meet all the definitions laid out by the World Heath Organization.
    Over the next few years you'll see us pushing the heck out of ASHRAE Standard 55, Thermal Environmental Conditions for Human Occupancy because its one very powerful tool to set us aside from the hacks...no mention of plumbing, pipe fitting or tinsmith in the standard but lots of worlds like, health and comfort.

    If you want to call yourself a plumber, pipe fitter and tinsmith expect to compete with companies who do plumbing, pipefitting or tinsmith work...but if what you do has a direct impact on someone’s health, wellness and comfort - its time to call yourself and something different.

    I'd say its time we started a new category of contractors...its easy to do, companies and industries do it all the time!

    What do you say?

    rb
  • mark_40
    mark_40 Member Posts: 65
    engineered products Vs. hamburger

    we don't sell a commodity product

    we sell a product that must be engineered for the application

    we sell a product that cause injury, or death

    "we" can put our heads in the sand, and pretend that "marketing" makes all the difference

    the fact remains, once other people control the sales of heating products, this industry is no longer a "business" ... yes, it's more like mcdonalds ...
  • Mark Eatherton1
    Mark Eatherton1 Member Posts: 2,542
    I agree...

    Nothing against the history of the trades, but if we are to get the monies we truly deserve, command and need to entice the WHY generation people to become our employees, we're going to have to distance ourselves from the mental images associated with Billy Buttcrack, the plumber.

    Which is exactly why I coined the term Hydronician. I know, everyone makes fun of the name, but it doesn't conjur up a mental image that anyone can relate to based on previous experience.

    It is time for a change, and at the rate that we're losing trades people to retirement, we'd better move on this FAST.

    Howsabout Human Physiology Well Being Specialist with a degree in Radiant Energy Thermal Comfort technology.

    I'm open to discussion!!

    ME


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  • Leo G_99
    Leo G_99 Member Posts: 223
    We have no problem

    installing customer bought material. Firstly, I know that if we install it, there is a very good chance that there will be another HAPPY hydroniced customer. And happy customers are good for ALL of us.

    Secondly, we have now gotten another client that will gladly allow us to service their system annually, thus growing our business.

    Thirdly, if your billing rate is right, then you can still make a decent buck.

    I see opurtunity in these things, "every cloud has a silver lining".

    Leo G

    PS - how many here have stated that they are willing to let customers work on their own projects as sweat equity, so that these clients can afford a decent system? Yet if they purchase equipment, this is somehow different?
  • Leo G_99
    Leo G_99 Member Posts: 223
    And

    Prof, every time I use hydronician or variations of such, I make a mental thank-you to you!!!

    Leo G
  • S Ebels
    S Ebels Member Posts: 2,322
    Ever notice........

    The manufacturer of what is argueably the highest quality forced air equipment on the market (Thermopride) sells their product direct to the installer????


    HHHHHHHHHHmmmmmmmmmmmm!!!!???
  • Rollie Peck
    Rollie Peck Member Posts: 47


    I too, am a homeowner who wanted to install my own more energy efficient boiler. Having done occasional plumbing, heating and wiring jobs for fifty years, I thought that I could handle it technically and have a chance to create something usefull. Fortunately, while doing the research to become a more knowledgeable consumer, I found this website.
    Mike Theis and others convinced me of the value of a knowledgeable contractors expertise. I found one who would let me do wiring and piping while paying him a fair profit on his time, expertise and equipment. It was money well spent.

    I beleive that most of you on The Wall are experts and that you care about safety, trouble free installations and long term economy. The problem seems to be one of showing a potential customer these things. Maybe you need to show pictures and favorable testimonials from previous installations. Show them pictures of your business, inventory, tools, test equipment, training schedules, personnel and other things that show that you are going to be there if they have a problem in the future and have all the means to fix it. Briefly explain the hazards of improperly installed gas lines and improperly adjusted burners.

    Many customers are simply not aware of how complex modern heating systems are and how valueable a contractors expertise is. Unless they frequent websites like this, they won't know unless you tell them.

    Good luck!

    Rollie Peck
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