Hi there,I have been a regular installer for Magnet for many years.Last autumn I was contacted by my Reg Ins Manager reference a proposed reduction in piecework rates and my reaction was positive,in so far as the climate is slow.I do enjoy the comfort of regular work that is in my opinion reasonably well paid.However the payscale has been downsized by 5% with immeadeate effect so any slotted contracts not yet fitted will be paid at the lower rate and Magnet will pocket the rest SO LOOK OUT FOR A NEW CONTRACT NUMBER NOT THE ONE ON FILE
just noticed this today on a contract i had printed out. Need to speak to them about it. I was never informed this was on the cards, although i suspected it would come. 5% is quite a lot really, but at least we have work on!
I guess it’s fair.....Especially as all installation managers and directors are taking a similar cut in salary.....I don’t think so!
I was told by my ISM in november about the 5% cut. He also said they considerd going to a service provider to run the whole installation side of things but chose to go this route instead. GB ive worked many years for myself and spent many a night typing quotes, chasing materials sorting out labour problems and trying to get payments from customers. Now i fit for Magnet Im booked end of March dont have to chase payment and get a lot of repeat work of these customers. and i dont have to spend a penny advertising. working for (sheds) doesnt mean that you cannot be any good.
I fit for myself and Magnet, still doesn't stop recession though! I was told about this, but the designers I use said they would put on price codes to bring it back in line to the usual pricing structure, so this is the way I suggest you go. Why should we suffer when they are scrabbling around trying to save money. They already discount most fits by 25 - 30% anyway, which has made it more difficult for me to quote on my own jobs when some installations appear cheaper through Magnet.
Thanks for your comments,my note was not to complain as I was told this reduction was on the cards ages ago.My point was that any invoices will be returned unpaid due to a new contract num
Thanks for your comments,my note was not to complain as I was told this reduction was on the cards ages ago.My point was that any invoices will be returned unpaid due to a new contract number being applied,as invoices coming back is eternally frustrating this is just to say LOOK OUT
Would any of you "shed fitters" be prepared to detail the pricing arrangements of the big companies such as Magnet? What they pay per unit, tile and plumb and elec etc. to you and to customer.
Just a comment. It has been said it is not fair that the fitters take a cut but the store does not. My take on it. Say a outlet has overheads of £100 They sell 4 kitchens and make £50 per unit = £200 In the recession they now only sell 2 kitchens and still make £50 per unit, now the profit is only £100. In effect they have taken a cut simply by the fact they are selling less units but have the same overheads. If the business is no longer viable.........then, it closes and no work for anyone. Managers won't take pay cuts????? I personally know an area sales manager (in carpets though not kitchens) who has had a 20% pay cut on his salary and his bonus withdrawn this year. He could spit his dummy out.........but he hasn't, he has decided to dig in and work and try to get the firm (which has provided him with a good living for many years) back on track. How many guys in all trades who are sticking to their "i won't cut my rates" guns are sitting in the house they can't pay for waiting for someone to knock on their door with work? It's tough out there and if market dictates you have to do a bit more for a bit less then that's how it has to be. You are only worth what people are willing to pay you.
12benny: if you want to know the prices, then go into a Magnet and get a quote on a pretend kitchen with fitting. You can then see their pricing structure and do a quote accordingly, marking down the price by a percentage, which is what I do.
Magnet are selling as many kitchens as previous years but to do so have had to cut their margins,something had to give. I personally am not bothered about the 5% cut because if (as they looked at) went through a service provider you would be looking at 10-15% of your fit price to them, that is if they wanted you to fit for them.
Audi, your arguement is slightly flawed. If they sell 4 kitchens and make £200 profit then now only sell 2 kitchens and make £100 profit, Their percentage profit margin remains the same. As someone pointed out though, Magnet are still selling the same amount of kitchens as they used to. I bet if they did find a reduction in kitchen sales they would just carry less stock. So now they are actually making more profit as their fitters have had to take a cut in pay. Magnet know that there are lots of people willing to do the work for a cheaper price, so expect their fitters to accept a cut in pay. In my last job, I had to suffer a 15% cut in wages. worked overtime for no extra pay (salaried staff. The company really had their penn'orth out of me. But due to G Browns continuing governance of this country I,m now one of the 3 or so million, jobsearching each week to keep His jobcentre employees in a cushy job. Hopefully though a new job is on the horizon.
"Audi, your arguement is slightly flawed. If they sell 4 kitchens and make £200 profit then now only sell 2 kitchens and make £100 profit, Their percentage profit margin remains the same." No!!!!! Sell 4 kitchens profit 4x£50 = £200, minus £100 overheads so £100 profit. This equals 100% mark up or 50% POR. Sell 2 kitchens profit 2x£50 = £100, minus £100 overheads so zero profit, nada, nothing, zilch. The overheads are the same, still paying rent on the shed, lighting, heating, business rates etc and so on. Now if magnet are selling the same amount of kitchens and spending the same on advertising and promoting these sales and the overheads are the same as they were then yes they are making more money. I doubt they are selling the same amount of kitchens as in the height of the property boom. (not sure, i just doubt it) If this is the case then it is simply that they CAN get fitters to work for less. Your worth is market driven, if there was more work than fitters the rates go up, if the opposite, then they go down.
Acording to KBB news re: Magnet, "Although net sales for Quarter 2 this year showed a slight increase over the same trading period last year: up from £120.6M to £121.9M. operating profit was down from £10M. to £2.2M." So it seems although they are indeed selling kitchens their profits have taken a massive hit and they are working on under 2%!!!!!!! It would be like you selling your punter a ten grand kitchen and your profit at the end being £200!!!!!!!! It doesn't take much with margins like that to push you over the edge.
Magnet have to ask themselves why, with a £1.3m increase in sales, operating profit manages to drop £7.8m. May be they are pricing their products too cheap? Could be that the shareholders have too many snouts in the trough? With figures like that perhaps the management ought to think about going into politics.
Maybe they have to slash their margins to maintain turnover. The idea that the way to make more money is to increase your prices doesn't work i'm afraid......if only it was that simple. Everyone is competing for the work and regardless of what people say everything is price driven and even more so when money is tight. Putting up prices would only reduce turnover. Could be .............. they have decided a small profit is better than nothing.