June 23rd, 2005 by Jemaleddin Cole

The other night, Kellie and I had a young man come out from Cap­i­tal Investments/Improvements to give us an esti­mate on some new win­dows. We’re trying to do every­thing we can to improve the value of our house, and since the win­dows we have are pretty old, inef­fi­cient and yucky, we thought we might start there.

Now, I don’t know how many of you have had some­body come out to your house like this, but please believe me when I tell you that they make used car deal­ers seem respectable. Not that the young man who came out wasn’t nice, pro­fes­sional, and easy to talk to, but the prices they throw around are outrageous.

First the sales­man made us sit through an hour of his sales pitch, all about the many fea­tures unique to the brand of window he was sell­ing. He explained that they were thor­oughly insu­lated. He showed us sam­ples. He talked about how his win­dows only took an hour to install. And that’s when I started doing some math. More on that later.

After the demon­stra­tions were over, the sales­man went around and mea­sured our win­dows. Then he got out a pad, a cal­cu­la­tor and a manual and did some math for about 5 min­utes. Now, I’m not the world’s great­est math genius, but 5 min­utes seems exces­sive, doesn’t it? Look up the price of the window by size, add the labor rate per window, and mul­ti­ply by some mag­i­cal number so that you run a profit. For a hand­ful of win­dows, this should only take 30 seconds.

But don’t take my word for it, let’s do the math together. Accord­ing to the sales­man, the win­dows only take an hour to install, and we have 6 win­dows and two slid­ing glass doors (let’s figure 3 hours for the doors), that’s only 12 hours of labor - or rather, 24 since he men­tioned two “factory-certified” installers. But how much does the labor cost?

I had no idea what they’re paying their installers, but I fig­ured I could find out how much win­dows cost. Since all of our win­dows and both of our slid­ing glass doors are the same size, we’d need 6 32 inch x 54 inch win­dows and two 6 foot doors which is about $1388 for the mate­ri­als. You gotta figure they’ll need some caulk and screws, so let’s round it up to $1450 or so. (And let me point out that these stock replace­ment doors and win­dows look iden­ti­cal to the ones he showed us.)

We’re going to have to bite the bullet and make a guess on the labor rate, so let’s shoot high: they love these guys like broth­ers, and they’re paying them $60K/year. Using the stan­dard “divide by 2080″ rule, we see that they’re paying these guys $28.84/hour, or $57.68 for the two of them. Mul­ti­ply by 12 (or 24), and you get $692.16, but let’s not be stingy: that’s a day and a half of work, they need some breaks, and we’ll cover their travel time. $1000. (Cur­rent total: $2450)

Of course the sales­man isn’t here for noth­ing. I mean, he’s the one with his butt on the line, right? He’s the guy that’s going to make or break this deal. So he should deserve at least a 15% com­mis­sion, and his com­pany prob­a­bly wants another 25% as well. I’m guess­ing here, but that would seem rea­son­able, right? His take is $367 for an hour’s work - not too shabby. Add it all up and it’s about $3450, which seems pretty reasonable.

So now that we’ve done the math - and that didn’t even take me 5 min­utes to type - let’s com­pare our answers: I got about $3500, he gave us a price of $17,000.

Wait, that can’t be right? $17,000? He can’t expect us to pay that.

Luck­ily, he didn’t want us to pay that. He had a spe­cial offer going on and would give us a dis­count. $16,000. More than 4 times what an objec­tive person would guess. We weren’t going for that either.

So he said that he could really give us a deal that would make us happy: they put a sign on our lawn for a week saying that they’re the ones doing the work on the house, and we get a huge dis­count: $12,000. Only 3 times my number.

As you can guess, I wasn’t going for that either. So he called his finance man­ager. No really - like we were buying a car or some­thing. Like the price of the win­dows was up in the air. Like they had to make room for the new models coming in for 2006. But I’m not going to argue with a dis­count. I mean, if a goofy call to the finance guy can get me a better rate, let’s hear it: $9,000.

At that point we told the guy to get out. He was nice and all, but the fact that the price had dropped by nearly 50% in the space of 5 min­utes made me uncom­fort­able. I mean, even a car dealer doesn’t do that.

So let’s review: my esti­mate says that they’re paying what Lowes charges, which is prob­a­bly already at more than 50% markup. It says that they pay their manual labor­ers almost 5 times min­i­mum wage. And that the sales guy is making almost $400 an hour. And on top of that we throw in 25% markup. So let’s face facts: $3500 is inflated. That’s already high. What else would they need to boost the price to $9,000?

Well, these guys prob­a­bly need coffee in the morn­ings - I’ve never seen con­struc­tion work­ers show up with­out coffee. So that’s $8 (cause they stopped at Starbuck’s). And they need some break­fast, which we’ll figure is another $20. How much is left in the dif­fer­ence? $5,472? Hmmmm….

Aha! They have to buy another truck! I mean, I want a fresh truck for my win­dows, right? So that’s another $4,000. Plus the reg­is­tra­tion, tax, tags, title, emissions…. Still $1000 short. Maybe they need to buy some tools! Two ham­mers, some screw­drivers, a cord­less drill, a level, a crowbar… Well, we’re still $500 short, but let’s not quibble.

So here’s my rec­om­men­da­tion. Don’t call Cap­i­tal Investments/Improvements. They’re obvi­ously trying to run a scam with their $17,000 prices and their $8,000 dis­counts, and their making you buy a used pickup truck for each deal. Right? But what’s sad about the story is that I could have told it twice. We got the same song and dance, the same dis­counts, and the same win­dows (near as I can tell) from Home­Fix, one of Capital’s com­peti­tors. So they’re not alone.

What’s even sadder is that a friend of a friend of mine paid $6,000 for 4 win­dows. Yipes!

I don’t know how you go about find­ing an honest con­trac­tor if you need new win­dows, but don’t start with these guys. Any­body else have an idea?

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