Nationals dictating pricing

[JBurton]

We work with lots of nationals, ranging from service work to pylon installs. While I have always hated doing work for them, especially when they pick up a local customer, that gets a bill twice what I would charge, but I realized long ago that they are a necessary evil, at least in my region. What I'm not used to, for the most part, is them dictating part pricing. We recently got 'invited' to a program, wherein we receive 'special' pricing from distributors, that we would be using for this national account. They'd then dictate our price to them. So, I pay $8 for a lamp, they pay me $8.50... so that's about 1/16th over cost, which doesn't cover what you'd call 'spillage' on a case of lamps.
Further, they are asking for preferred rates, so where I typically charge $135/hr for a bucket truck with 1 man, they want $75.
These prices are absurd. Typical markup is 2.5 on materials, standard pricing on trucks, and travel time is what it is. I can't believe they're requesting the same rates in other parts of the country, but I figured someone on here has gotten the same proposal recently, so I wanted to check and see what others are getting. There's enough info here for anybody with this program info to know who I'm talking about.
Oh, I forgot to say, the hilarious thing is the discounted pricing from their preferred vendors is higher than our typical pricing from our vendors.

 

[Gino]

Luckily, I don't see that kinda nonsense, but do you have the ability to turn them down, based upon their greedy pricing structure ??

 

[JBurton]

Luckily, I don't see that kinda nonsense, but do you have the ability to turn them down, based upon their greedy pricing structure ??

For sure, they're coming from a 'enter this program and get 'first dibs' on maintenance work. Service work is nothing compared to install work, and half the time you're sitting on site for a callback to change an NTE. Just rereading the email, they also offer direct contact with the team for all aspects involving every project. Ok, that's not an incentive, that's the way work should happen. Lately we've been dealing with 'project managers' that are just yucks working remotely, clearly haven't been in the industry for more than a week, can't figure out google maps to know that I'm 3 hours from a job that they are only paying $400 for, and they are totally 'unable' to escalate any issues we have, not just on site, but overall. I'm pretty sure they've laid off half their staff and replaced them with ai at this point, and not the good kind.

 

[unclebun]

When I have companies offer less than I want I just tell them it's too low and if it's not what I want I won't do it.

 

[JBurton]

When I have companies offer less than I want I just tell them it's too low and if it's not what I want I won't do it.

That's a typical, one off job. They come with price A, you come back with B (B being enough and some to lose), then they can come back with C, which is less than B, but that difference is the prime factor in taking the job or not.
This is different, they are wanting guaranteed rates for service, and a parts list that they want you to stock, which is really more of a logistics headache with no room for profit, in fact, it will incur overhead for the materials hanging out in the stock room and all the headaches of purchasing, checking in, stocking, accounting, inventory control, etc. I do this for myself, but when I sell something, I get my money back 2.5 fold, so it's worth it.

 

[Zendavor Signs]

Big companies are always going to squeeze smaller companies for whatever they can, in any industry. We do very little work for nationals, and I am not a fan at all. I don't like middle people who don't know anything. I recall one very well-known company that had a price list as part of their "vendor contract" several years ago. It specified the cost of typical parts and/or allowed markups, which was very small. Also dictated labor rates.