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Question: How do you price customer-supplied products like a smart thermostat? Is there anything you do for a value add on these calls?

Gary Elekes; EGIA faculty member and Founder of iMarket Solutions:

Well, first you have to decide if you want to do that kind of work or not. A lot of companies are going to check the “No” box, leaving the retail customer to find someone who says “Yes.”

We typically price that as if we actually supplied the material. Rather than saying no to the client, our price is the same as if we installed the product and they had not bought it.

A lot of customers don’t appreciate that price but believe it or not, five or six times per year, somebody says yes, install it for me.

We’re not in the business of installing supplied-material-labor-events. It’s just not something we want to do.

If I was to sit down and price it with someone who wants to be in that world, I’d look at gross profit dollars per labor hour, just like any install or service, and make sure that whatever labor you price is going to the gross profit dollar per hour that you targeted with the material.

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