Inflated invoice when the builder has ordered building materials

[Lollo J]

Now I apologize if my response ended up wrong, I'm not keeping up with all the threads

 

[TWX]

This is completely fine. As long as the customer pays when the customer starts to investigate prices, he stops believing in the craftsman or workshops servicing our cars. Here is an example: I have an Audi, the compressor for the suspension broke, I called the Audi dealer and asked how much does a compressor for my car cost, Hmm Hmm, well it wasn't cheap, 17758 SEK + assembly 4000 SEK. I thanked and went on to Ebay.de where the same compressor cost 339 Euro + 19 Euro shipping = 3600 SEK. It took an hour to replace it, the compressor is the same one Audi uses as original equipment.
So can we then say that Audi in Sweden is committing fraud? No, of course not, they have every right to charge the price they want, and as long as the customer accepts the price, it is fine. If you want to complain, you should do it before you buy, not after.

I also buy "Mobile Oil" oil for 50 SEK/l which someone here probably also from "Mobile Oil" and paid over 223.75 SEK/l.

 

[13th Marine]

I think it's equally exciting every time a thread like this pops up; some craftsmen immediately defend the method.

 

[tornberg]

"If one had been many times more skilled or faster than our friends from the rest of Europe, it would be one thing"
You obviously don't know what you're talking about....

 

[Mrnowin]

Hi, I am a self-employed entrepreneur and usually have a 20-30% margin on the retail price. It may vary from one building supply store to another depending on quality, brand, etc. But if I have 30%, I usually add 15%, and with 20%, I add 10%, which means both the customer and you save/earn the same amount, which I think is reasonable. However, if he added 12% to the price you mentioned, he's given you a higher price than the store, which I would question.

 

[flygrc]

If one is promised that the price of the material will be low, in my eyes that is fraud.
Well, if he can, so can you; just dispute the whole job and he'll be the one drawing the short straw.
Unfortunately, there are customers who make a system of this even on well-executed jobs because they know it will lead to a settlement, which benefits the customer.

 

[dudero]

Yes, you misunderstand me. A relatively new house is often (marginally) more expensive than an old one. But if I compare building a new house on a plot that is almost free with buying a house that is 15 years old, the difference is not reasonable. The difference should consist of anticipated renovation costs and the technical lifespan of the house. A house that is 15 years old and is maintained according to the standard practice does not necessarily have a much shorter technical lifespan compared to a brand new one. Even a new house requires maintenance. And it really doesn't matter much if you build on your own (taking all the risks) or let a construction company do the job for you. You are still the builder with all that it entails.

In Sweden, it has been shown that it is basically only in a few attractive areas where it is profitable to expand rather than sell and buy a larger (equivalent secondhand) house. This is despite all the costs that arise when you move.
In, for example, England, the opposite is true. It almost always costs significantly less to expand (with the help of craftsmen) than to buy a new house with equivalent size and standard.

But it's not so strange when craftsmen have a practical hourly cost of 900 SEK + VAT...

I know nothing about England, but to support it by saying craftsmen average 900 SEK + VAT I think is completely wrong.

 

[dudero]

If you get a promise that the price of the material will be low, it's fraud in my eyes. Well, if he can do it, so can you, just dispute the whole job and he's the one who will draw the short straw. Unfortunately, there are customers who systemize this even on well-executed jobs because they know it will go to settlement, which benefits the customer.

It seems very strong to talk about fraud when the thread creator is giving one (1) of probably hundreds of products as evidence. It could just as well be the store that set a different price than what the craftsman thought. I think these lynch threads are unbalanced. One could at least listen first if the invoice is generally more expensive on everything compared to the average price.

 

[Norsjo]

Hello!
Unfortunately, this is something you should have had in the contract from the beginning.
When I got a quote for an extension, material costs were clearly outlined in the quote plus 15% to cover measuring, ordering, and delivery.
When I decided to do the work myself, I went to a local professional builder's merchant and set up an account and discount. I got an average of 20% off on 250,000. That was a saving of 87,500 SEK just on materials.

 

[jimih]

My construction company closed as soon as my job was done, and the boss and his wife went away for 3 (THREE) weeks to the other side of the world.

And? A manager in the construction industry earns between 40,000 and 60,000 on average, depending on what type of managerial role he/she has. Given that he/she does not have very high expenses in general, there should not be any problem affording such a trip, even without any form of kickback from a construction store.

 

[lbgu]

Seems quite an exaggeration to talk about fraud when the thread creator provides one (1) of surely hundreds of products as evidence.

Even if in just TS's case it might not be about fraudulent behavior, the fraudulent behavior seems very widespread in the construction industry.

I get a bit horrified when I read all the defense of these immoral methods in this thread. I just state that quite a few craftsmen probably think it's completely OK for a home service company to fleece pensioners in the same way when they buy the pensioners' groceries. Imagine a little 'kickback agreement' with the local shopkeeper that gives you back a few crowns for every liter of milk you buy for the pensioner. Because that's exactly how it works in the construction industry. A craftsman who buys a circulation pump from Ahlsell for the customer that costs more than 50% above the normal price in trade and then gets part of the difference as a kickback is on the same level as the one who cheats the pensioner out of their milk money.

 

[magnuss]

Sorry for stepping into the thread without having read all the posts. I don't understand the original poster or all others who share his concerns. What do we as customers have to do with our contractor's agreements with their subcontractors if we haven't required transparent cost reporting as part of the inquiry and procurement?

There's no company on earth interested in explaining how they build their cost structure forward in the chain, and there's also no requirement for it. You have the chance via the inquiry to let different contractors submit bids, and there you can require them to specify any scales for materials, time, or fixed prices.

Having a business is about managing all the operational and financial risks in your operation. Successfully selling is one, purchasing goods and services is another, and likewise performing the agreed-upon work. An agreement must, to provide a good solution, offer incentives to both parties, otherwise, it ends with dissatisfaction and the relationship ends (often with sad faces).

Those of you demanding full transparency about discounts and kickbacks are just being stingy and cheap towards the one you hire. You simply have no business with those things. Write better agreements with the builder so that everyone agrees on what applies from the start, and sorry to say, but if you think you can shift the entire risk of cost/loss to the contractor, you won't get any contract signed.

A business relationship has as a common denominator an invoice that is based on an agreement. The invoice won't be better than the agreement YOU wrote. If you can't handle the procurement yourself, there is legal assistance available. It costs a bit but may be the best for all parties in the end anyway.

Sorry, but that's how it is!

Absolutely not a builder myself).

 

[jimih]

Apologies for jumping into the thread without having read all the posts. I don't understand the TS or everyone else sharing his concerns. What do we as customers have to do with our contractor's agreements with their subcontractors unless we required transparent cost reporting as part of the request for a quote and procurement process?

There probably isn't a company on the planet interested in explaining how they build their cost structure, forward up the chain, nor is there any requirement to do so. You have the chance through a request for a quote to let different contractors submit bids and there you can demand that they specify any tiers for materials, time, or fixed prices.

Running a business is about managing all the operational and financial risks one has in their operations. Successfully selling is one, purchasing goods and services is another, and similarly, performing contracted work. For a contract to provide a good solution, it must provide incentives to both parties, otherwise, it ends with dissatisfaction and the termination of the relationship (often with sad faces).

Those of you demanding full transparency about discounts and kickbacks are just being stingy and miserly against those you hire. You simply don't have any business with those things. Write better contracts with the builder so that everyone knows what's applicable from the start and sorry to say, if you think you can push all the cost/loss risk onto the contractor, you won't get a contract signed.

A business relationship has as a common denominator an invoice that's rooted in a contract. The invoice won't be better than the contract YOU wrote.

Sorry but that's how it is!

(Not a builder myself).

What I reacted to is above all the fact that the builder apparently recommended a certain construction company precisely because they "have the best prices." To state it that way and then offer far from the best prices to the customer is, in my view, bordering on deceitful behavior. As I interpret TS in the initial post, the "regular price," so to speak, excluding VAT, was 54 SEK each, and he was charged 76 SEK each. This is a total markup of 41%.

You yourself say that the customer has nothing to do with any agreements between the builder and the building supplier. From that standpoint, it is completely meaningless information for a builder to tell the customer that the builder gets the best prices by shopping at this particular supplier. Therefore, it is reasonable to assume that what the builder is actually saying is that it is the customer who gets the best prices if the builder shops at this particular supplier. And then I mean it's essentially a lie straight to the customer's face if, when the invoice comes, there's a price about 40% over what can be considered a regular price.

 

[dudero]

Even if in just this case it's not about fraudulent behavior, the fraudulent behavior seems to be very widespread in the construction industry.

I get a bit scared when reading all the defense of these immoral methods in this thread. I just note that a lot of craftsmen probably think it's completely OK for a home care company to rip off pensioners in the same way when they shop for the pensioners' groceries. Imagine a little 'kickback agreement' with the local store that gets you a few bucks back for every liter of milk you buy for the pensioner. Because that's exactly how it works in the construction industry. A craftsman who buys a circulation pump from Ahlsell for the customer that costs more than 50% above the normal retail price and then gets part of the difference in kickback is on the same level as someone who cons the pensioner out of their milk money.

Rip off!? How so? Would the pensioner have had more money in their wallet if they had shopped themselves!? You can hear that's a completely off example.

I don't understand how you can speak in such exaggerated terms when you have a single item as an example. What if every other item is cheaper!?

 

[cpalm]

But if I have 30% I usually add 15% and 20% add 10% which makes both the customer and you save/earn the same amount, which I think is reasonable.

Had to pause for a couple of seconds there before I understood that you mean adding to your discounted price and not to the list price Then it's of course completely OK!
But how do you handle it yourself when the discounts are in the form of "bonus programs"?