FLAT RATE PRICING vs. HOURLY RATE

Over the years there has been a tremendous amount of controversy over flat rate pricing vs. hourly rate plus parts.
Being a service technician for 39 years and seeing both sides of the fence I have found in most cases the customer ends up saving an average of 30 to 50% by using the hourly rate.
The following example is based on flat rate pricing I experienced in 1993 and those prices could be even higher today.

Example:

In 1993 I was ask to handle a residential service call by my employer, and being a commercial technician I was unaware of flat rate pricing, so after I had replaced a ½ horse power universal blower motor that cost less then the original equipment manufacturers motor and spending a total of 1-1/2 hours including travel and time on the job, I called in for the cost of repairs.
I was informed to charge a flat rate price of $489.00 plus a $59.95 diagnostic charge.

The total job cost was $548.95.

In 2005 – 12 years later I had to make a similar repair. The difference was I had to use the original manufacturers motor and had to pick it up from the local supplier, this motor not only cost more then a universal motor; I had an additional hour on the job for a total of 2-1/2 hours.

The total job cost was $338.24.

SUMMARY:

FLAT RATE                                                $548.95
HOURLY RATE plus parts                        $338.24
SAVINGS                                                $210.71 almost 63% less

You be the judge