repiping company wants to hire me as a sub.

[huggytree]

Ive been contacted to be a sub. for a national repiping company who's moving into the area.

they sell the job and pass it onto me....for their sales they keep 40%....yes i said 40%!!!!...unbelievable.....

they have given me a agreement to sign and 2 references...the references have said they break even on some, make $ on some, and lose alittle on some.

the company advertises that they are less than a normal plumber...

at first i thought by getting 1-2 jobs from them a week it would finally allow me to hire an employee....but after thinking about it all i can see is me losing money and stressing out....having someone else controlling the bid who may or maynot know anything about plumbing...they make a mistake, their company still makes 40% and im the loser....they also give a lifetime warranty which i find insane.....

they said to sign the agreement (not a contract) and do a couple of jobs.... if they are less than a normal plumber and i only get 60% of that $ how can anyone make $......im going to move on and skip this idea....

Im just looking for comments on how this concept of doing absolutely nothing but making a sale and getting 40% of the job...i can see 10%...maybe 15%, but 40% is just crazy .....yet they find plumbers in every city to do it...their reviews on the internet are mixed, but mostly good....so the customers are over all happy.

we all need to do something like this....the profit margin must be 1000%

[vangogh]

They get 40% simply because they can. People are signing up with them at 40% so why should they give out less.

It's not uncommon for affiliate networks to give out 40% - 50% to anyone who sends a visitor that turns into a sale. I've even seen some that give out 75%. In the case of an affiliate relationship the business still needs to close the sale. In the case of this company the business (you) doesn't need to close the sale.

I wouldn't say they're doing nothing. Making a sale is a huge part of being in business. Someone could take their deal and have a business with 0 time and money spent on marketing and advertising. My guess is it's also steady work so for someone new to owning a business the worries about where the money is going to come from probably don't exist.

How much money does the average plumbing business spend on marketing and advertising as a % of revenue? Is it somewhere in the neighborhood of 40%?

They might not be a good fit for you, but they are for some.

[Steve B]

I'll spend hundreds of dollars (sometimes thousands) just to make the phone ring once or twice. I can see them getting 40% very easily.

[huggytree]

my phone book ads + my monthly mailers to builders is about 2% or less of my gross income

yes they will be doing radio and TV which will cost alot....i still think their profit is 1000%

id have to see it on paper to change my mind.....its not 20-30% like a typical business

they make the sale and advertise....i would take all the risk....they take 0 risk...they get their 40% in a down payment...i have to ask for my 60% when im done with the job...they dont guarantee i get my 60%....i warranty my work for a lifetime..

i dont know why they are looking at me....they need someone fresh in business who's stupid (which is what they must assume i am) or a large company who can throw 4 apprentices at it to make it profitable....with me by myself it could never be profitable

[KristineS]

If you don't want to do it, don't do it. Definitely sounds like you have misgivings.

As others have said, this is a pretty common affiliate scheme. What you're signing up for is the name that is already known and the advertising that the parent company does. It probably does work for some people, or they wouldn't be able to stay in business. My guess is they also hit all the professionals in a given area thinking that they will get some to sign and others will not. They probably didn't do much more research than to look in the phone book or Google plumbers in your area.

[Harold Mansfield]

Ive been contacted to be a sub. for a national repiping company who's moving into the area.

they sell the job and pass it onto me....for their sales they keep 40%....yes i said 40%!!!!...unbelievable.....

they have given me a agreement to sign and 2 references...the references have said they break even on some, make $ on some, and lose alittle on some.

the company advertises that they are less than a normal plumber...

at first i thought by getting 1-2 jobs from them a week it would finally allow me to hire an employee....but after thinking about it all i can see is me losing money and stressing out....having someone else controlling the bid who may or maynot know anything about plumbing...they make a mistake, their company still makes 40% and im the loser....they also give a lifetime warranty which i find insane.....

they said to sign the agreement (not a contract) and do a couple of jobs.... if they are less than a normal plumber and i only get 60% of that $ how can anyone make $......im going to move on and skip this idea....
The only concern I would have is, "Am I getting my rate, or something comparable to the amount of work that I will receive?"

I really could care less how much they keep as long as I am getting my fee. If my rate is $100 an hour and they charge $300 an hour, and keep $200.... As long as I get my $100..who cares ?


Im just looking for comments on how this concept of doing absolutely nothing but making a sale and getting 40% of the job...i can see 10%...maybe 15%, but 40% is just crazy .....yet they find plumbers in every city to do it...their reviews on the internet are mixed, but mostly good....so the customers are over all happy.

We all need to do something like this....the profit margin must be 1000%
They aren't doing "nothing". You said they were a national company. It takes a lot of money and man power to have your brand recognized nationwide. Millions in advertising and branding, and if deserves the rewards that it gets.

Unless they are taking advantage of you and shortchanging you to the point where you don't make a profit..what you have described is how subcontracting works. It's also how retail works, real estate, car repair, medicine, restaurants, bars, and just about every other kind of business.

When you are the "big dog" and have spent the millions to build a national company, then you will have the credibility to sub contract out and keep 40% to pay your accountants, ad agencies, marketers, webmaster and SEO experts, radio and T.V. spots, customer service operators, and company management.

If it's not a good deal and you would be losing money, then don't do it. Plain and simple, but if the only thing holding you back is that they keep 40% of what they charge, I think you will be missing out on a lot of work, that I am sure one of your competitors will gladly take them up on and with extra work they get as sub, will probably expand to take a bigger market share.

Personally, with the exception of personality clashes and moral issues, I could care less who I work for if I am getting paid. (legally, of course)

JMO

[huggytree]

the 40% isnt holding me back...i just found it amazing...i also could care less what they charge if i would make my normal rate.

im not bothering since they advertise as being the lowest price and their reviews also say they were the lowest....take a low bid and take off 40% and their price will probably be 40% less than what id charge....there is no way the prices could work out...

i guess im the only one amazed..hmmmm....maybe it doesnt take much to amaze me anymore.

[Harold Mansfield]

the 40% isnt holding me back...i just found it amazing...i also could care less what they charge if i would make my normal rate.

im not bothering since they advertise as being the lowest price and their reviews also say they were the lowest....take a low bid and take off 40% and their price will probably be 40% less than what id charge....there is no way the prices could work out...


But you are guessing. You won't know for sure until you do more investigation. I am sure that they are not able to find a mass quantity of licensed plumbers that are loosing 40% by working with them.
It may be a deal where they supply all of the materials since they can buy in bulk and get them cheaper, therefore, cutting your expenses...of maybe they have assistants that are paid out of their pockets to help with the work. Maybe you get a gas allowance, or something that cuts your cost to do the job. (I'm just guessing here)

I live in a big construction town and it's not uncommon for larger companies to supply materials and all kinds of perks to subs for the life of the project. All they need is the tools and to do the labor.

There has to be a way and reason that they can be the lowest, yet still keep plumbers working, and have everyone still make money. They are saving money, or cutting costs that the normal local plumber can't do, somewhere.

I would find out for sure before I trash the idea. Work, is Work.

[huggytree]

he called me yesterday and i told him that i decline his offer...he started with the typical salesman thing..he had to find out why and then counter my reasons....

i gave him 3 reasons...
1. i cant give a lifetime warranty on anything
2. i do not like my companies profit being dictated by someones salesman
3. i do not feel your price will be my price

because it was 3 reasons he didnt argue anymore...i wished him good luck.