Business question

antijoke

antijoke

antijoke

Caporegime
Joined
28 Jan 2003
Posts
40,001
Location
England
So here's a hypothetical question for you guys:

You quote to do some work for a client, you quote £20k which they are happy to pay, when all is said and done you realise an error in your pricing and the cost was actually totalling £18k, now do you:

A) pocket that £2k as extra profit
B) tell the client you've saved them £2k and lower the price
 
Honestly, I'd pocket the £2k.

You gave them a price, they was happy to pay, simple as. If your work was worth it, they'll come back to you again in future anyway.
If it's not up to scratch, then giving them 2k still wouldn't get you further work.

I can't honestly see a solution where you get anything out of returning (other than a sense of moral righteousness, which certainly wouldn't be worth 2K in my books)
 
A). If you'd made a mistake the other way and you should have charged them £22k, do you reckon your client would have stumped up the extra £2k?
 
Personally I'd choose B. Or a variation on B. You could meet in the middle, pocket a grand and save the client a grand, then everyone will be happy. I think business integrity / rep is far more important, especially if you are quoting similar amounts for different clients.
 
One the one hand, if it had cost you 22K, would they be happy stumping up the extra - I bet that's a no ending with the word 'off'.

Other side of it is you are likely to win repeat business if you come in under the price and everything else is also good.

If it a business where repeat orders are par for the course and you want to work for them again, I'd be tempted to split the difference and charge £19K.
 
Do you see repeat business coming from them?

If so I'd return some money at least and use it to gain favour for future work(finish the project and when it comes to pay time lower the bill. I wouldn't tell them upfront.).

If not keep it.


Edit: That really awkward moment when a OcUKer reads this and thinks "I just accepted a £20k contract...".
 
Last edited:
I would like to say I would be honest with them and tell them that I've saved them £2k on the work over the original quoted price however in real terms as others have said I would keep it.

The customer was happy to pay the original price quoted and if they are happy with the work then everyone's happy. Yes being honest and saying you saved them some money may mean they are more willing to come back to you for future work but if they are happy with the quality of your work then that should be enough for repeat business. I suppose as others have mentioned, the idea of splitting the money saved 50/50 between you and the client could be a sweetener for both parties.

So what you spending it on OP? :p
 
Last edited:
postbox said:
If it's still a fair price for the work, then yes of course.
Click to expand...

Not in my experience.

I suppose an important question would be what does your contract say with the customer? If it's a fixed price contract then yeah, that's the price agreed so that's the price your client should pay. If it's a time and materials contract then you're probably obliged to come clean and give the money back.
 
Depends on the customer.
You quoted a price, presumably others quoted against you and you won the job at 20k. Its not illegal to make a profit.

But... if its a long term client and you don't go up against others then i'd knock some money off with the long term view in mind.
 
mrbell1984 said:
2K is a lot to some but not to others. However, pocketing 2K is a little bit like theft in my eyes. Very immoral..
Click to expand...

A little like theft? :eek:

For reference I haven't won any contract or anything it's a hypothetical question based on something that happened at a place I know and I was interested in what other people would do in that situation.
 
Your costs are irrelevant and are nobodies business but yours.

You've provided a quotation which the client was happy to accept.
 
If the customer asked for a fixed price cost and you come in under, I don't think that's hugely wrong.

If you had come in 2k over and it was fixed, it would be on you.
 
mrbell1984 said:
2K is a lot to some but not to others. However, pocketing 2K is a little bit like theft in my eyes. Very immoral..
Click to expand...

how is it theft? he gave them a quote and they accepted. If they didn't like it they could have refused and used someone else.
It's just a higher profit margin, there is no theft.
 
mrbell1984 said:
2K is a lot to some but not to others. However, pocketing 2K is a little bit like theft in my eyes. Very immoral..
Click to expand...

It's nothing like theft at all. Not even a little bit.

Shops will have variations on their stock price all the time, do you think they constantly change the price they charge us to reflect that?
Sometimes they will and call it a "Special amazing deal" most of the time they'll make some extra profit.

Client was happy with the 20k price and that's that the profit made by the contractor from that work is no one elses business but theirs.
 
Isnt this how a lot of tenders work anyway? Client outlines job, people place bids on cost, winning bid gets the contract and the money and as long as they do the work to the satisfactory quality required it doesnt matter how much they cost.
 
Are they a regular/tier 1 client? If so, pocket 1k and return 1k. You look great for being 'honest' and returning some of their fee, but you also get a nice bonus out of it :p :p
 
You must log in or register to reply here.
Back
Top Bottom