Plumbing Flat Rate Pricing: Examples, Software & More

One option in the plumbing industry for pricing your services is to go with flat rate prices. This is where you charge a fixed price for each service you provide, regardless of the time and materials it takes. It’s a simple and easy to understand pricing method that lets you give customers upfront pricing that helps them budget for a project. It also makes calculating totals for invoices straightforward, which means you can create and send invoices out faster.

This second point is important because, according to our research, the sweet spot after a job is completed is to send an invoice within 10 days to get paid faster. If you send one within 11-20 days, you’ll wait an average of 5 more days for the customer to pay, and if you wait more than 20 days, you could be waiting almost an entire extra month to get your money.

This plumbing flat rate pricing guide will go over other reasons why using the flat rate model in plumbing can be advantageous, and provide examples and tools you can use to implement flat rate pricing effectively, but we’ll also explain some downsides to flat rate pricing and the advantages of using alternative methods.

• •
  How do flat rate plumbing pricing models work?
• •
  What are the alternatives to a plumbing flat rate pricing model?
• •
  What goes into determining the flat rate pricing for plumbers and their services?
• •
  Top 4 plumbing flat rate pricing examples and templates for inspiration
• •
  5 plumbing flat rate pricing tools & services you can use
• •
  6 reasons a pricing-integrated software is better than flat rate pricing for plumbers

To start, we’ll explain what flat rate pricing is and discuss its pros and cons. 

How do flat rate plumbing pricing models work?

Plumbing flat rate pricing models categorize services into common tasks and assign a fixed price for each of them. This indicates the base price the customer will pay for the service regardless of how much time a plumber takes to complete the work, or how many materials they use.

Since these models don’t take work time or materials into account, you have to develop them by calculating the average amount of time it takes your plumbers to finish each task, as well as the average cost of materials for each task. You must also consider other factors such as overhead costs, how much you need to charge to turn a profit, and other unforeseen issues that can come up during work.

Advantages of flat rate pricing and how it helps plumbers

Flat rate pricing for plumbers can be beneficial for a number of reasons, mainly because it’s easy to understand for both you and your customers. This can give you advantages like these:

• 1
  Makes sales simpler and quicker – Being able to give a customer an immediate upfront quote for their job makes it more likely they’ll agree to the sale. It also lets your salespeople spend more time explaining your value propositions and less time walking customers through complicated pricing formulas.
• 2
  Builds customer trust – Customers prefer clear pricing without hidden fees. So using a flat rate pricing model lets them plan their finances around the exact amount a job will cost them. Customers tend to reward this kind of upfront pricing with repeat business.
• 3
  Encourages efficient work – Part of setting flat-rate plumbing prices is calculating the average amount of time it takes experienced plumbers to finish a task or job. So when you use flat-rate pricing, you can make your plumbers aware of these averages, then challenge them to work quickly and efficiently to meet those time targets.
• 4
  Simplifies invoicing – Quoting a fixed price the customer will pay for each service helps plumbers avoid complicated calculations of hourly tech rates, material expenses, and other costs for the final price. This makes writing and sending invoices faster and more straightforward. It may also encourage customers to pay their invoices sooner because it’s easier for them to understand their bills. Read our plumbing invoicing guide for more details.
• 5
  Reduces pricing conflicts – When your prices are dependent on variable costs, customers are more likely to dispute them or try to haggle with you over their payment. Using flat rate pricing minimizes this problem because the customer knows they’re not paying any more than the price you give them upfront. This helps you get paid sooner instead of wasting time arguing with customers over what price seems fair.

Disadvantages of flat rate pricing for plumbers and where it falls short

On the other hand, flat rate plumbing pricing keeps prices relatively static and doesn’t account for things like how every work site is different or how costs can change over time. So it can fall short for reasons like these:

• 1
  Risks losses due to unexpected expenses – Flat rate pricing carries the risk of taking jobs where you encounter hidden issues or surprisingly difficult conditions. This can happen if customers aren’t clear or honest about the scope of work they need done in an attempt to get a lower quote price. You need more time and possibly more materials to properly complete these jobs, which can cause problems like depleted inventory, expensive emergency material purchases, and delays in getting to the next job. So you can end up paying more for these jobs than what you price them at, leading to lost profits and revenue. Using a plumbing inventory app may help guard against this problem.
• 2
  Vulnerable to price changes for materials – Flat rate pricing should factor in the average cost of materials required to complete plumbing tasks. But this can cause problems if those costs frequently change, especially if they rise or fall sharply. When materials are cheaper, your prices may seem high compared to your competitors. When materials are more expensive, your prices may not be high enough to cover those costs and still turn a profit.
• 3
  Customers may feel they’re overcharged for small jobs – Flat rate pricing should take into account the estimated time and material costs of your services, as well as your overhead costs and profit margins, but these calculations may not match what customers think is the amount of work or value involved in certain plumbing tasks. They may complain that you’re overcharging them for seemingly simple jobs, even though your prices are fair from a business standpoint.
• 4
  Doesn’t account for variable work conditions – A plumbing job can be easier or harder depending on things like how old the plumbing system is, how well-built it is, and how easy the area being worked on is to get to. So charging a fixed rate for plumbing services can mean you overcharge for a job that ends up being simpler than expected, or undercharge for a job that turns out to be more complicated than you first thought.
• 5
  Can lead to shortcuts and rushed work – While a flat rate pricing model can motivate plumbers to complete jobs more efficiently, it can also tempt them to work too quickly and finish jobs as soon as possible. Not taking the time to do the work right can cause problems down the road, which reflects poorly on your company and can cost you customers.

If flat rate pricing isn’t cutting it for your plumbing company for any of the reasons listed above, we have the solution. BuildOps’ commercial plumbing contractor software helps you more accurately price what your services are worth, and process payments up to 90% faster. With automated scheduling and project management built in, your productivity could jump by up to 40%! 

What are the alternatives to a plumbing flat rate pricing model?

If flat rate pricing doesn’t seem like the right model for your company or you’re already using it and it isn’t working well, there are plenty of other pricing systems you can use. Here are some of the most popular ones in field service industries:

• 1
  Cost-Plus – Charges the customer the total cost of a project to you (labor, materials, and overhead) plus a percentage markup. It guarantees you’ll make a profit, but can make customers feel like they’re always paying more than what a project is worth.
• 2
  Hourly – With this model, hourly work rates are set for your plumbers based on their experience and qualifications, market conditions, and so on. Then the final price depends on how long the work takes to complete. This model better reflects the value of the time commitment you make to completing a job, but can entice your techs to drag a job out needlessly to bill for more hours.
• 3
  Time and Materials (T&M) – In addition to hourly plumber rates, this model factors the cost of materials needed to complete a job into the final price. Again, it more accurately represents the resources you have to put into finishing a job, but can lure your plumbers into taking longer to finish a job than necessary to increase the number of hours they can bill for.
• 4
  Tiered Service Levels – This model gives the customer a base price for standard services, but then offers higher price points that include additional tasks or upgraded materials. This allows the customer to choose less expensive options to save money, or choose more expensive ones to get better-quality work. It’s also commonly called the “Good, Better, Best” model.
• 5
  Subscription-Based – In this model, a customer pays on a specified schedule (usually by month or by year) to get a certain amount of plumbing service over each time period. It’s often used in commercial settings for preventative maintenance. 
• 6
  Value-Based – A model where you set the price of each plumbing project based on its supposed value to the customer. It can offer the best balance between profitability and fairness to the customer, but it takes a lot of research to get right. You need to confidently know things like what your customers want from (and think about) your company, what makes your company stand out from competitors, and what customers are willing to pay based on current market conditions.

What goes into determining the flat rate pricing for plumbers and their services?

For plumbers, flat rate pricing means customers pay a fixed price for your plumbing services, regardless of other factors. However, these fixed rates must at least cover your business expenses. Here are some common plumbing business costs that need to be considered when setting your flat rate pricing: 

• 1
  Time / Labor – You’re giving up time in a day to do other jobs, and you’re putting your plumbers’ skills and experience to work. Your prices should reflect that investment.
• 2
  Parts, Units, and Materials – You have to buy the parts or units you install or replace on jobs, along with supplies for repairs and maintenance.
• 3
  Travel – If you use vehicles to carry your equipment between work sites, you’re paying to buy or lease them, maintain them, keep them fueled, license them, and insure them. There’s also a time cost to traveling between work sites.
• 4
  Equipment Usage – You need to buy or rent special equipment to complete certain jobs. You also need to pay to power the equipment (like buying fuel for gas-powered equipment) and to maintain it so it works when you need it to.
• 5
  Emergency Response – Customers may need your services on short notice, which gives you little time to prepare. It also disrupts your schedule and the availability of your techs. Part of your pricing should cover this.
• 6
  Unexpected Project Costs – Plumbing projects can end up costing more time and materials than first thought due to challenging working conditions, or hidden problems found at the work site that need to be addressed. Factors like heavy traffic, road closures, and bad weather can also cause delays and extra spent resources.
• 7
  Overhead – Running a plumbing company involves several administrative costs: leasing property, paying utility bills, buying office supplies, marketing your company, insuring your plumbers, and so on.
• 8
  Taxes – Most of what you buy or sell will be taxed by the government, making running your plumbing company more expensive and reducing the amount of income you actually get.

Using a plumbing pricing software program can help you factor in these costs without you wasting time and risking mistakes doing the math by hand.

Top 4 plumbing flat rate pricing examples and templates for inspiration

It’s tough to give examples of flat rate pricing for plumbing because, as we just explained, there are many behind-the-scenes considerations that go into setting field service prices. So you’ll have to build your own price book – but that doesn’t mean you have to manually create one from scratch. Here are some templates and tools that give you an idea of what you need to include.

1. Best field service software with built-in pricing templates: BuildOps