HVAC contractor pricing - no thanks

[danski0224]

It has, artificial, very high barriers to entry to running your own business.

Absolute ******* ********.

The exceptions are the States that require a license and/or some type of mechanical degree. Texas is one State that has requirements to be a HVAC contractor, but I see lots of pictures of flex and other **** work.

All you need for a COD account at a HVAC supply house in my area is a business name and business card. And an EPA card.

No proof of insurance or anything like that.

If you want to do typical **** residential work, the suppliers sell drop and plenum kits, and you can buy rolled flat stock and "ess" (slip) cleats, tape and screws.

If you want to actually make sheet metal ductwork and fittings, then you need somewhat expensive equipment and the skills to turn flat metal into 3D shapes.

Or you call one of the many fabricators in this area and pay someone else to make it.

Refrigerant reclaim stuff, yup. Gauges, yup. Threading tools? Maybe?

Employees? "Helpers"? Or other 1099 shenanigans? Yup. Really difficult to do it alone. Salesman? Probably.

Eventually, if you don't want to "work for a job", the next step needs to be taken.

But in reality, if you own a truck or van, and REALLY think that HVAC contractors are absolutely rolling in piles of cash, quit your bitching and move to Illinois or some other State without certification requirements... and start raking in the cash.

 

[American Locomotive]

It's not BS. The vast majority of states have HVAC licensing requirements.

Here in RI, you cannot run your own HVAC business without being a licensed Class 1/2 Master Refrigeration Contractor. ...and if you want to be a Class 1 contractor ( as in, you can work on any size system), you need 10,000 hours as an apprentice + a year of Class 1 Journeyman experience + couple hundred hours of schooling + exam.

Only 14 states do NOT have statewide HVAC licensing. Of those, many of them leave it up to the local AHJs to decide if licensing is needed.

 

[ybnormal]

There's plenty of slick talking estimators out there who have all their teeth and drive fancy trucks who will stick it to ya.
Don't let how a person dresses or what they drive fool ya .
I'll take a guy with actual skills,that knows how to use them in a 20 year old van any day,over a flashy truck .

that's why I always look at the truck they drive up in. is it well used or just painted real purty and jacked up but never goes offroad?

 

[danski0224]

It's not BS. The vast majority of states have HVAC licensing requirements.

Here in RI, you cannot run your own HVAC business without being a licensed Class 1/2 Master Refrigeration Contractor. ...and if you want to be a Class 1 contractor ( as in, you can work on any size system), you need 10,000 hours as an apprentice + a year of Class 1 Journeyman experience + couple hundred hours of schooling + exam.

Only 14 states do NOT have statewide HVAC licensing. Of those, many of them leave it up to the local AHJs to decide if licensing is needed.

Those "barriers" are educational and job experience.

Was it this thread or another where people are saying that HVAC is easy and anyone can do it?

These requirements say otherwise. I would be all for that stuff here in Illinois.

There's 14 other States you can move to and make big money and get rich doing HVAC... apparently... or maybe not. Maybe it isn't so ******* easy...

 

[American Locomotive]

Do not conflate the barriers to owning your HVAC business, to simply being able to perform the work. Those barriers I mentioned are for creating and running your own business.

You don't need 10,000 hours of training to work on a system in this state. You don't any hours. You can work on a system as an apprentice with 0 hours experience as long as a Journeyman Class 2 is with you at the minimum (which isn't difficult to achieve). ...and that's how these companies operate. They don't send a master out to your house. They send Jimbob the-newly-minted Journeyman and Larry the Apprentice out, and neither one has any idea what they're doing.

...but if you actually want to own and run your own business, you're looking at 5-6 years minimum, by law. ...and that's what I mean by "HVAC does not play by free market rules". It has high barriers to entry if you want to provide a service, and buyers often have little ability to make truly informed decisions on their purchase.

 

[danski0224]

...but if you actually want to own and run your own business, you're looking at 5-6 years minimum, by law. ...and that's what I mean by "HVAC does not play by free market rules". It has high barriers to entry if you want to provide a service,

No, some schooling and experience is required. This is not a barrier. This is the minimum the State can do to ensure that the person doing the work is trained properly.

In my area, trade unions are moving to a 4 year program and now the equivalent of a 4 year degree.

It's no different from some other field that requires education and experience.

Obviously, there are people that believe in the need for these requirements.

I see enough to wonder how more people don't die or have their homes blow up.

Unfortunately, even with experience in a 5 year apprentice program, it doesn't mean that people don't do stuff the right way, or that employers do the job properly. Ultimately, that falls upon the AHJ performing the inspections.

 

[brewchief]

Do not conflate the barriers to owning your HVAC business, to simply being able to perform the work. Those barriers I mentioned are for creating and running your own business.

You don't need 10,000 hours of training to work on a system in this state. You don't any hours. You can work on a system as an apprentice with 0 hours experience as long as a Journeyman Class 2 is with you at the minimum (which isn't difficult to achieve). ...and that's how these companies operate. They don't send a master out to your house. They send Jimbob the-newly-minted Journeyman and Larry the Apprentice out, and neither one has any idea what they're doing.

...but if you actually want to own and run your own business, you're looking at 5-6 years minimum, by law. ...and that's what I mean by "HVAC does not play by free market rules". It has high barriers to entry if you want to provide a service, and buyers often have little ability to make truly informed decisions on their purchase.

So 5 to 6 years learning a trade is a high barrier to entry? 5 to 6 years making money and accumulating tools sounds better then 5 or 6 years in school accumulating debt.
If you think 5 or 6 years is a high barrier to entry that's pretty much any job or field of work that requires a college degree.

 

[PoorUB]

It's not BS. The vast majority of states have HVAC licensing requirements.

Often those licenses are pretty thin. Where I live there are three states in spitting distance. You do not need a license in any of them to do service work. The places that require a mechanical license are the larger cities. A chump in a truck can run all over the rural areas and do pretty much what ever he wants. There might be license requirements, but no enforcement. You show most wholesalers a business card and EPA card and you can buy from them. A truck with your business name and EPA will suffice. A sales tax number helps.

 

[American Locomotive]

So 5 to 6 years learning a trade is a high barrier to entry? 5 to 6 years making money and accumulating tools sounds better then 5 or 6 years in school accumulating debt.
If you think 5 or 6 years is a high barrier to entry that's pretty much any job or field of work that requires a college degree.

You're arguing things I'm not.

This is strictly about starting your own HVAC business and the "free market". People in this forum constantly bring up that it's a "free market" and if you don't like the prices then "start your own business".

I'm pointing out that it is not a free market.

In a truly free market you have a lot of sellers and a lot of buyers. The market would also have low barriers to entry, meaning someone with ambition and some cash could get started and join the fray without too much effort.

In the HVAC market here, there are few providers - meaning they aren't really competing against each other. They all have enough work to stay busy. Additionally, you're looking at 5-6 years minimum time investment to start your business by law - which is indeed a very high barrier to entry.

It is not a free market, and therefore doesn't play by free market pricing rules.

 

[danski0224]

Take it up with your Senator and Congressman, perhaps?

If you really believe that your HVAC market is undeserved and potential new business ventures are being stifled?

 

[brewchief]

You're arguing things I'm not.

This is strictly about starting your own HVAC business and the "free market". People in this forum constantly bring up that it's a "free market" and if you don't like the prices then "start your own business".

I'm pointing out that it is not a free market.

In a truly free market you have a lot of sellers and a lot of buyers. The market would also have low barriers to entry, meaning someone with ambition and some cash could get started and join the fray without too much effort.

In the HVAC market here, there are few providers - meaning they aren't really competing against each other. They all have enough work to stay busy. Additionally, you're looking at 5-6 years minimum time investment to start your business by law - which is indeed a very high barrier to entry.

It is not a free market, and therefore doesn't play by free market pricing rules.

There's very few skilled jobs in general that don't have some sort of barrier to get into. In my area if want to open an HVAC company all you need is a license holder, that means you could move to my area on Monday and on Tuesday hire someone with a mechanical license and be open by the end of the week. One of the big franchise companies did that here, when they opened the HVAC side of the plumbing, hvac and electrical company they were operating on the license of an 85ish year old man who lived hours away.

In the county I work in the population is around 200k and there is probably 40 HVAC companies in the county and at least another dozen that do a fair amount of work here.

 

[American Locomotive]

Take it up with your Senator and Congressman, perhaps?

If you really believe that your HVAC market is undeserved and potential new business ventures are being stifled?

I never made any such claims.

What I am saying is, the HVAC market is not a "free and open market" as many on here like to claim. There are few providers, leaving customers few choices. Additionally, in 2/3rds of the states - there are high barriers to entry preventing just anyone and everyone from starting their own HVAC contracting business.

When you have few "sellers" in an area, it's much easier for the sellers to control pricing. When it's difficult for customers to get all the market information (wholesale prices of supplies/equipment, pricing from all sellers at once, etc...), it's easier for sellers to control pricing. Essential goods, like heating, have a very high "elasticity of demand". They are essential to life, so people need to pay for them regardless of their budget - once again, allowing sellers more control over pricing. The barriers to entry are very high, meaning it's difficult for someone who does believe they can do a better job for cheaper, to enter the market.

 

[danski0224]

Ah, but you are saying that there is "shortage" of HVAC contractors in your area due to these "cripplingly high barriers" that prevent entrepreneurs from opening a HVAC shop in your area, and (assumingly) "kill it" with super low prices because everyone else is jacking the prices up because of these "barriers" and getting stupid rich... more or less, eh?

Wholesale prices do not matter. I do not care if someone says they can get X for $$$ less than I am selling it for. If you want to provide it, then you figure out what you need, get it delivered, and then warranty it yourself.

Since about 2000 or so, anyone with an internet connection can attempt to look up whatever prices they want to.

I just did it on a roofing estimate for $22k, and quickly figured out that that particular contractor gave me a "shoot the moon" or "I'm busy, but I'll drop everything if you sign this" price. That number is almost 2x the other 2 quotes I got, which I figured are realistic in the current market.

I don't know if anyone is "controlling" pricing, but there is no reason to be less than average in pricing on jobs, no matter what it is. There is no reason to leave money on the table.

There are literally hundreds, if not a thousand, HVAC contractors within a 50 mile radius of my front door. Do all of them do bad work? No. Is it easy to find the ones that do good work? No. Am I super glad that I can do that stuff and more? You betcha.

Based upon my experience, heating season emergencies can be prevented much of the time with (wait for it).... maintenance. Or replacing that dilapidated old broken down **** held together with bailing wire and duct tape before it breaks in the winter. The equipment has a service life. It does need to be replaced at some point.

 

[American Locomotive]

I really don't understand why you insist on claiming I say things I never did. You do this in literally every thread. I never said there was a "shortage" of HVAC contractors in my area, and I never said the barriers to entry were "crippling" high.

I said there are a limited amount of "sellers", and that the market has high barriers to entry, meaning it's difficult for newcomers to enter the market. "Limited" does not mean "Shortage" and "high barriers to entry" does not mean "crippling" to do it. Those characteristics (along with some others) just mean the HVAC market is not a free market, and therefore does not abide by "free market rules" that other types of markets more closely resemble. So it's pointless to constantly keep claiming that HVAC pricing is governed by the "free market", because it is not.

Look up the "characteristics of a free market"

 

[JunkBonds]

I don't mind a guy trying to save a few bucks. Go out learn how to do the work, buy the tools and do it yourself. I have done this on most projects I've taken on. My house, my shop, my project cars, motorcycles, tractors, machining tools and parts, and woodworking projects, were all learned skills happily done on my own. But I don't go out and ***** about the prices the companies charge for the project or service I just did myself. I know I can beat their pricing everytime. If I happen to need help from a professional, I don't quote part prices to question their pricing policies. I **** it up and pay them to do it and sometimes if I ask nicely maybe they would offer some wisdom on their profession and hopefully I'll learn something. If they can charge whatever they want, and get it, that's great for them. If they couldn't get those prices, they wouldn't charge them. Simple as that. If you don't like it there are other options. Whining online isn't one of them.

Well ****....we all KNOW that about their prices. That does not make their pricing fair. If we have rent control on housing rentals then we need rent control on other pricing.

 

[4x4Pete]

From the sounds of things bigger conglomerates are buying up the smaller residential businesses. They aren't doing this to save the consumer money or to ensure there are more well trained techs out in the field. They are doing it to corner the market and raise profits. Seems to be working. Fair or unfair isn't a question they ask themselves. Like I said before there are other options, one man businesses or do it yourself are the two best ways to prevent being charged too much. These big conglomerates can't "overcharge" those who don't use them. Most other big conglomerates will charge too much for service on anything from cell phones to automobiles. The Ford dealer can't compete with the local garage down the street, Apple can't compete with the fix a phone guy at the mall. You have to be a smart consumer and protect yourself. The residential service world is filled with dishonesty, not just HVAC.

 

[Farmall450]

And people think auto repair is a ripoff

I think there's enough family members/local shops/mobile mechanics/etc to keep that pretty honest.

 

[Farmall450]

Nope.

Not even close.

I was billed $14k for a 5 hour surgery.

There's another $5k in tools (sharps) on the detailed billing.

Liability insurance is a little higher on that one

 

[Farmall450]

That's because, outside of a trade union, the pay for trade work *****.

That's funny, because my buddy makes more (non-union) as a "mechanic" or some such title at a union electric shop than an electrician w/ similar experience.

 

[Rc_Guy]

That's funny, because my buddy makes more (non-union) as a "mechanic" or some such title at a union electric shop than an electrician w/ similar experience.

More per hour on the check out more per hour total package? There is a difference.

 

[Farmall450]

More per hour on the check out more per hour total package? There is a difference.

Per hour takehome. I'm sure they probably have a better retirement thank his 401k match, but I don't have exact numbers.

In any event, my point is to get into industrial wrenching (or ag, etc) and you can make pretty decent money non-union but still a trade.

 

[toyotadriver]

Classic "victim blaming". Many people have a modest "rainy day" savings to handle reasonable household emergencies. Most people DON'T have a rainy day fund that can easily take a $15-20,000 hit when their boiler lets go on the coldest week of the year. This is especially true for retired elderly the rely on monthly Social Security/Pension/Retirement checks.

That is my point. The HVAC industry is not a "free market". It has, artificial, very high barriers to entry to running your own business. It *might* be tolerable if the system reliably and consistently produced good techs, but it doesn't. The test (at least in this state) is also a joke.

Victim blaming? What are they a victim of? Their own life choices? Sounds like a "them" problem and not a "me" problem.

So, what are you doing to right what you perceive as this "wrong"? Complaining on forums? That doesn't accomplish anything. Why not start your own HVAC business and start offering discounted HVAC work for the "retired elderly"? What's stopping you?





Nothing in this post should be misunderstood, interpreted, misinterpreted, or construed to be of a political nature.

 

[toyotadriver]

I never made any such claims.

What I am saying is, the HVAC market is not a "free and open market" as many on here like to claim. There are few providers, leaving customers few choices. Additionally, in 2/3rds of the states - there are high barriers to entry preventing just anyone and everyone from starting their own HVAC contracting business.

When you have few "sellers" in an area, it's much easier for the sellers to control pricing. When it's difficult for customers to get all the market information (wholesale prices of supplies/equipment, pricing from all sellers at once, etc...), it's easier for sellers to control pricing. Essential goods, like heating, have a very high "elasticity of demand". They are essential to life, so people need to pay for them regardless of their budget - once again, allowing sellers more control over pricing. The barriers to entry are very high, meaning it's difficult for someone who does believe they can do a better job for cheaper, to enter the market.

I could call 20 or more local and semi-local HVAC companies tomorrow if I wanted to. I have tons and tons of choices.

If what you are claiming is true and there are very few local HVAC businesses to you, sounds like you need to start your own HVAC business in your area and either make the big bucks that you believe the few people locally in the HVAC business are making, or provide the charity to the "retired elderly" you believe the HVAC companies should be doing.





Nothing in this post should be misunderstood, interpreted, misinterpreted, or construed to be of a political nature.

 

[jjrbus]

People keep stating profit, yes people are allowed to make a profit, I have no problem with that. But your industry in SW Florida is loaded with scammers, crooks, villains and filled with ner do wells that are totally incompetent. Quit defending them.

I googled HVAC scams in Florida and got 165,000 hits. ONE HUNDRED AND SIXTY FIVE THOUSAND.

If you want work done google how to avoid or spot HVAC scams.

 

[danski0224]

Quit defending them.

I do not defend scammers or **** work.

 

[oldmachinenut]

I'm tired of paying Dr prices for my pacemakers.
Is there an on line supplier where can by my own?
Same goes for lawyers/legal advice,any ideas? Hahaha

I think Temu and Vevor both have pacemakers on their sites. I also heard Harbor Freight has one coming out and you CAN use 10% coupons

 

[ALinCarolina]

There are two separate issues with this problem. First one is extravagant and ridiculous markups. The second is lying about your system and selling you un-needed parts or systems. The second is out and out fraud. Charging inflated markups on parts or extravagant labor rates if you can get away with it is the American way and one is free to quote inflated rates. It is shameful if taking advantage of people who don't know any better but pales in comparison to the second issue. Lying and selling you something you don't need is fraud whether we are talking about medicine, legal, retail, accounting, auto repair, you name it.

 

[rattle_snake]

Well based on the 'feedback' here safe to say the HVAC industry is a touchy subject. The lack of transparency doesn't help it's image.

As humans become more dependent on tech and less capable of doing anything else, more industries will follow suit. See the South park episode about the handyman.

 

[beltfeed]

Residential HVAC is non-regulated out of control business. I've have seen some of the worst installs from the bigger name company's and some of the best installs from the smallest companies. In my state you have to have a refrigerant license to purchase central AC and heat pump equipment. Part suppliers will not sell to non-HVAC business individuals. Just last week I needed to change a control board in a Rheem furnace at my dad house. Went to the local supplier and they told me sorry we can sell to you. I was not on their list of active accounts. I made a phone call to a HVAC friend of mine gave my phone to the counter clown and told him listen up he will order it for me. I think the biggest screw job comes from the equipment markup. When the wholesale cost on a furnace is $2500 and the contractor charges $5000 for the furnace that's a screwing. Not even adding in the 3K for the install that took a total of 15 hrs.

 

[Rc_Guy]

Residential HVAC is non-regulated out of control business. I've have seen some of the worst installs from the bigger name company's and some of the best installs from the smallest companies. In my state you have to have a refrigerant license to purchase central AC and heat pump equipment. Part suppliers will not sell to non-HVAC business individuals. Just last week I needed to change a control board in a Rheem furnace at my dad house. Went to the local supplier and they told me sorry we can sell to you. I was not on their list of active accounts. I made a phone call to a HVAC friend of mine gave my phone to the counter clown and told him listen up he will order it for me. I think the biggest screw job comes from the equipment markup. When the wholesale cost on a furnace is $2500 and the contractor charges $5000 for the furnace that's a screwing. Not even adding in the 3K for the install that took a total of 15 hrs.

so the guy working the counter is a counter clown? Most of us needed a job, he chose to work there so he is a clown?

 

[danski0224]

Residential HVAC is non-regulated

But when it is regulated, someone complains about the steep barriers to enter the field and open up a shop...

I have seen **** work from many trades, not just HVAC.

 

[beltfeed]

so the guy working the counter is a counter clown? Most of us needed a job, he chose to work there so he is a clown?

I should have stated he was a jerk to start with. When I walked in, I was the only customer there. He ignored me for ten minutes while he was on the computer. After I asked him what I would like to order he couldn't wait to tell me he would not sell me anything. My HVAC friend that placed the order for me said unfortunately you got the biggest ahole that works there. Any other staff member would have probably taken my order without any issues. So yes, calling this individual a clown was a complement. This has no reference to other individuals that work at the counter. Thanks for trying to make something out of nothing.

 

[HoosierBuddy]

One thing this thread points out, that I think we might even all agree on, is when you find someone that does good work for a reasonable price, you better hang onto them.

Those guys are hard to find though, because they don't need to advertise and are kept busy enough they don't go out looking for work or trolling around with a bunch of moonshot quotes.

I found my first guy because he was the guy my dad used. When he died, I found my second guy because of connections from work.

Neither of these guys ever ran a sale or put an ad out there for winter tuneups. They never slow down. They are just job-to-job all day long.

And, I'll admit here that I never shopped a quote with either of them. If I needed them to do something, I asked them to do it and told them to send me a bill when it was done. The bills have always been fair.

As far a looking for work (for instance) I asked my new guy about changing out AC system as it is 26 years old. His response "Don't get rid of that one. That's back when they made good ones." That shows you how busy he is.

 

[86turbodsl]

For those of us that have the ability to do this stuff its easy to complain about what businesses charge for it. But if you really knew what the costs of doing business are now days you would understand the prices. Its almost impossible to even find a good helper type employee for less than $20 an hour. That $25 probably ends up costing the employer $50 I would imagine any decent HVAC tech is making close to 6 figures now days. Not to mention vehicle costs, insurances etc etc etc.

What do you guys do for a living and what rate is your work billed out at ?

A good buddy of mine ran his own HVAC business for several years in Michigan. He barely made enough to keep the lights on. It's a cut throat business.

 

[dcg9381]

No, some schooling and experience is required. This is not a barrier. This is the minimum the State can do to ensure that the person doing the work is trained properly.

I think you mean that the state means to make sure that the person who owns the business was licensed and trained properly.

I've never seen that guy show up beyond the initial bid. And I had his clowns.. I mean employees called back 3 times.

I see it both ways, but it's definitely a "market lock" when the OEM suppliers won't sell a consumer a HVAC system direct and supplier pricing comes with a number of mandates like not advertising prices.

I mean look, I don't want joe blow buying refrigerant or blowing old systems out to atmosphere either... But the "intentions" of government here (and TX is pretty unregulated for contractors compared to other states) and how that sorts out in reality are often different things.

 

[danski0224]

supplier pricing comes with a number of mandates like not advertising prices.

Well, I can't get wholesale pricing on Pella 250 series windows unless I am a contractor.

How far do we have to take this "unfair wholesale pricing" argument/discussion? It isn't limited to HVAC.

 

[dcg9381]

Well, I can't get wholesale pricing on Pella 250 series windows unless I am a contractor.
How far do we have to take this "unfair wholesale pricing" argument/discussion? It isn't limited to HVAC.

Fair point.. And to some degree, you can claim the same thing about windows - you don't want Joe Blow installing them and then trying to use Pella's warranty.

And to be honest, there are ways "around" - I can buy Goodman (online) direct if I want an HVAC system... And certainly Mr. Cool has built an industry around direct-to-consumer products. I just did a Mr. Cool system for a buddy a few weekends ago and they've it a lot more brainless with improved seals and connections for the copper lines.

I think my point is that I believe that to some degree these "barriers" to entry aren't always about what's good for the consumer. Often it's about what's good for the industry and when you have suppliers with enough market control, they can control pricing... And sometimes do directly via contracts with licensed installers.

 

[4x4Pete]

Would it be better to completely open the residential HVAC market so the average homeowner could buy a gas appliance or parts and install them without any safety measures taken? None of the wholesalers will sell to the public around here, for good reason, most people are too stupid to know when they're over their head in danger. A small family owned supplier gets people coming in everyday. Asking him to troubleshoot for them when they are clueless on what they're doing. I certainly don't want my clueless neighbor blowing up his house, killing me or my family. I also won't install some ****** unit you've bought online, simply because I forever will be married to it, any problems would be my fault. It's bad enough now that the public can buy an A/C unit and install it themselves. I have no doubt there have been electrical fires caused by the same ignorant people doing their own work who shouldn't be allowed to plug in a toaster. Judging by some of the questions asked on this forum people are not interested in learning about anything, they just want to save money. The average consumer does need to be protected from themselves.

 

[danski0224]

If most of you had a job at a home improvement center, and knew what a wider swath of the general public was doing, there would be zero outcry for less relaxed standards for HVAC equipment sales.

There was a HVAC "supplier" in my area that did sell to homeowners and others that thought they were being ripped off by The Man. His prices were sky high. He closed up shop mostly due to homeowners wanting free troubleshooting advice, and buying parts for the "parts cannon" and then returning them.

 

[dcg9381]

A good buddy of mine ran his own HVAC business for several years in Michigan.

Something makes me think he'd do a lot better in Texas.
When I grew up, MOST of the homes in Michigan didn't have AC where we were.