What is reasonable pricing in 2023?

When someone is asking for referrals for a service or goods, they invariably say they are looking for something or someone “reasonable”.  But, what is reasonable? And, is this the question that we should be asking? This happens all the time in person to person conversations – the old-fashioned “over the backyard fence” type thing – and online in Facebook local groups. People are regularly looking for referrals for all types of services for the home – roofers, painters, plumbers, landscapers, and sometimes even interior designers. These requests seem to all include the same things: looking for referrals providers of good or great work that is reasonably priced. So, what does “reasonable” mean?

In general, we know when someone says “reasonable”, I think we can assume they mean “moderately” priced. Not too expensive. What is missing is the concept of “value”.  Reading the definitions above, the definition of “reasonable” when related to a person includes the words “sound judgement, fair and sensible”. This, to me, gets more to the heart of the notion of reasonable. It’s not just about being moderately priced (aka not expensive), it’s about being priced correctly for what the service or good is. It means that the price is set based on sound judgement or knowledge and is fair and sensible.  These concepts can not be pulled from the air based on what we “think” something should cost.

Here’s an example:

On a local Facebook town group page, a homeowner posted that they needed to find someone to remove some brush and wood from their lawn. They included a photo (not the photo above) and said they needed it done by that weekend and were willing to pay $75 for the service. Obviously, this person felt that $75 was a reasonable price to pay to have what was not a huge pile of yard debris removed. It might take half an hour to fill up a truck and take it away. What they clearly didn’t consider, but was quickly told as much by others, was that it’s not just about the time spent in their own yard, there are actual costs associated with what seems a straight forward task.  One responder said his dumping fees are $50 per dump because the person removing the brush isn’t just driving it to the woods and tossing it (out of sight, out of mind?). And, the time spent driving to their house, and then driving the debris away and dumping it also has to be compensated. There is also vehicle wear and tear and insurance – both on the vehicle and on the person. And, oh yes, a little profit so the person can pay his bills. So, suddenly, $75 may not be so reasonable.

I was talking to a roofing contractor and he said he usually works along side his crew up on the roof because he knows that when he’s there they will all work better, faster and the job will be done properly. He’d rather not be up there, but after a decade or two of being in the business, he knows what it takes to get the job done right so that he doesn’t have to go back to fix things down the road. His mantra is – go up on the roof once and never have to go back. Sometimes this means that the next job is pushed back a bit because the current job needs more time. And he believes that’s the best way to go. Now, of course, that next client on the calendar may be angry – but they can be assured that when he’s on their job, it will be done right. I’m assuming this level of service doesn’t come “cheap”. He has to charge for his time and as the owner, his time is valuable. I’m certain that there are people who hear his pricing and don’t feel it’s “reasonable”. But, are their “feelings” backed up with real knowledge, or just a “feeling” about the worth of something.

These types of feelings are based in emotion, not knowledge.  When you select a service based on price alone – based on feelings and emotions about what something should cost – you are more likely to end up paying more to have things fixed. Hire a bad roofer who shortchanges the job (and prices accordingly) and then you may be paying over and over again.

As a designer, I spend much of my time pricing my work – estimating how much time a particular project will take me to design and implement and how much each item that I specify will cost. It’s the most complicated part of a project. I have vendors, assistants, sub-contractors, insurance, office expenses and need to make a profit. A general contractor who is pricing out a building project has to convert the architect and design plans into nails, wood, spackle and paint (and a myriad of other things). He needs to have each of his subs do their pricing and then add in a contingency for surprises (mold behind the shower wall, asbestos abatement, design plan changes, backordered materials, and on and on…) Oh, and he needs to add in his time, insurance costs and make a profit.

Does the average person understand all these items? Nope. This is why referrals are so important. Entering into these agreements is a big deal, even for a small project. Don’t make decisions based on emotions, but on facts. Ask the vendor to explain exactly what his price covers. Compare the bids on an apples to apples basis.

The question shouldn’t be – is a price REASONABLE – but is it FAIR. Is the price fair for the quality of the service or product, the level of customization, the time it will take.

“Fair” is a two-way street. It’s fair to the buyer and to the seller. Reasonable is a one-way street – heading only towards the buyer.

Pin for future reference.

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