Tell if your ID pricing is full of s***

We coin this the “10% pricing test”.

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When you first receive the quotation, if discount has not been given already, ask your ID for a discount.

Anyone who gives you 10% or more discount, they are likely playing tricks.

We look at this from their profit margin standpoint.

Let’s take a $50k contract sum.

They are definitely not having a margin of less than 10%, if not they don’t even make money.

We take a profit margin of 20%, which i think many will say is fair, for someone that really does the job well.

This gives us a $10k profit.

Put yourself in their shoes, do you think someone will willingly half their profit margin, from $10k to $5k at the very beginning?

Possible but not very likely.

The stronger likellihood is that they raised their margin to maybe 30, 40 50%, and then create the illusion of discounting you by 10%.

While the end margin might be the same for two IDs, surely you will trust the person who has a straightforward pricing of 20% margin, vs someone who priced at 30% margin and pretend to discount you 10%.

From our experience, for a good ID or contractor,

• Discount 0%-5% - Very likely (i.e. <$2.5k for a $50k contract)

• Discount 5%-10% - Still possible

• Discount > 10% - Very very unlikely

Of course there are outliers. But we are confident that this applies for 95% of scenarios in the market.

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