For a while now, pool service technicians have been wrestling with the question of whether to install equipment that customers have purchased on the Internet for significantly less money than they would make if the item is bought from them.
There are two schools of thought among techs on this practice. One is that Internet sales are cutting into their profit margins and they shouldn’t encourage the purchase of equipment from outside vendors by installing the equipment. The other is that there is still money to be made by performing these installations, especially if it doesn’t cannibalize the tech’s regular business.
Falling into the second category is Jeff Sherman, who owns a service business in Santa Clarita, Calif. While many of his regular customers still go through him when their equipment needs to be replaced, some are buying pumps, heaters and filters from Internet retailers and asking Sherman to install the parts for them.
“It’s frustrating knowing that people can buy stuff online cheaper than I can get it with my discount,” Sherman says.
A recent survey of prices offered to service techs by a national pool supply company compared to prices available on the Internet spotlights the problem. For example, a Jandy CL460 cartridge filter, which would cost a tech $708 at the supply house, was available for $699.95 online. A Pentair 400,000 Btu heater, model 460737, was $1,774 wholesale, $1,648 online. And a Hayward Tri-Star single-speed 2HP pump, model SP3215X20, was $506 wholesale, $483.99 online. All prices are without tax or Internet shipping, unless the shipping was included with the sale price. Online prices for similar items from the major manufacturers were slightly above or below the wholesale prices.
As customers shop for more products online, service techs are frequently asked if they can match a price that someone finds on the Internet. Often they can’t.
“If I thought it would make a difference if I stopped installing the stuff from the online pool stores, I wouldn’t do it,” Sherman says. “But all I’d be doing is losing work.”
Sometimes it’s not just a job on the line, but the tech’s reputation. “If the Internet seller is making money, the customer wants to know how I’m buying the part for so much more. He thinks I’m either a liar, and he doesn’t want a liar in his backyard, or he thinks I’m an idiot because I’m purchasing it for $500 or $600 more than he can,” says Kent Simpson, owner of Cornerstone Pools in Santa Clarita. “The pool man’s reputation is on the table.”
So, if a tech is going to install parts that his customers buy on the Internet, how will he charge for his labor? And does he guarantee his work?
For smaller jobs, Sherman charges an hourly rate, with those not on his service routes paying a higher rate than his regular customers. For big jobs, like replacing a complete equipment setup, he quotes a flat fee. He gives a 90-day warranty on his labor, but if the part fails, he refers the customer to the seller or manufacturer. Other service techs will do Internet installations, but won’t extend warranties on anything — labor or parts — after the last wire is connected.
Other pool techs, however, won’t do any installation of equipment provided by a customer. “I won’t touch Internet installs — don’t even want to deal with them,” says Steve McClintock, owner of Living Water Pool Service near Phoenix. “It’s a big risk. If something goes out in three months, you’re the first person they’re going to call.”
But most techs believe they’ve got to make their peace with the Internet. “Many people know to go through the Internet now and it’s easy to do,” says Bob Nichols, owner of Precision Pool in Glendora, Calif. “I’m not going to make the markup I used to make. It’s here; it’s not going to go away.”
Sherman even gets some of his jobs via referral from an Internet retailer he knows. Sherman says that when the retailer sells an item to someone in Sherman’s service area, he’ll refer the customer to him.
In fact, Sherman once lost a job — to himself. He says he bid on a complete equipment replacement for a customer. Instead, the customer bought from the Internet retailer with whom Sherman has a relationship. The retailer referred the customer to Sherman for the installation.
Another revenue stream for pool techs is reworking improperly done installations performed by homeowners on equipment they purchased online. “I’ve done quite a few corrective installations where customers have installed a pump and the plumbing leaked or the pump didn’t work when ‘Uncle Johnny’ came over and did the work,” Nichols says. “I’ve had a couple jobs where they’ve put 220-volt motors in on 110 power.”
So despite tough price competition, savvy pool techs are finding new ways to survive. “The silver lining is that guys will find their niche — something that you can bring to the table for the customer. This is forcing me to work on other ways of making money,” Simpson says.