“I can buy this capacitor on Amazon for $25, but your fee to change it is $185. Why is that?”
We hear this type of objection all the time from homeowners. They don’t understand why we charge what we do when they found a similar part online for so cheap. They tend to think that heating and air conditioning is just over-inflated pricing to gouge the homeowner. I’d like to resolve this misunderstanding here and now.
First, we aren’t part changers. You, as a homeowner, aren’t paying for a part delivery service, you’re paying for a professional diagnostic, repair, and warranty…in essence, you’re paying for peace of mind that your system will work when we leave and your comfort will be restored.
But this isn’t what determines our pricing. Our pricing is based on several factors, all of which are required for that repair to restore your comfort and peace of mind. Let me break it down for you.
First, you’re paying for the tech, their time, and the vehicle and fuel to get to your location. A qualified and experienced tech (the kind that gives consistent, reliable service to homeowners like yourself) costs at least $50/hr. Then there is the vehicle, insurance, and fuel to get to your location.
After that, you’re paying for the training we invested into the tech so they can give you the best service possible. Good companies spend money monthly, if not weekly, on training.
After that you are paying for the part. Rest assured, it costs more than the cheap Chinese version you found on Amazon. Quality parts cost more because the companies that make and sell them back them up with warranties and guarantees, which is why we buy them and not the cheap knock-offs.
Then, you pay for the full diagnostic, which is the deep dive. Not just looking for what has failed, but asking why it failed. For example, your capacitor failed, which has caused your AC to break down, but why has it failed? If we just swap it out for another one without resolving the underlying issue then the new one will fail as well.
After that you are paying for our warranty. Every part or service we offer comes with at least a 1-year warranty, whether the manufacturer offers one or not. If it breaks again we replace it at no cost to you, part or labor.
Next, we charge in order to keep the light’s on. Overhead for an HVAC business includes state licensing, bonding and business insurance (to protect you), and a small percentage for marketing to make sure we continue to have clients to serve. All of which is necessary to run a business and which gets spread around to all customers as a percentage of each job.
Finally, we budget for a profit. In the HVAC industry this usually runs around 8-10% of gross revenue. This is equal to about $18 of that $185 capacitor from our original example.
So when we break it down (from a 40,000 foot view) your pricing is based on the costs associated with the tech, vehicle, time, training, part, warranty, overhead, and net profit. We don’t just pull numbers out of the air, and we definitely don’t gouge homeowners, that’s not good business and doesn’t serve anyone.
But as I said at the beginning of this post, don’t get caught up in the minutia. What you are paying for is the peace of mind that your system has been expertly repaired, the root issue solved, and your comfort restored.
The backend of our pricing is quite complicated, books have been written on how to do it correctly, but you should know, everything we do is for your comfort and security, and at Prestige Air you’re paying market value, if not less, for a service whose quality far exceeds that of the market.