Subject: Contractor Related Issue

Hello to all our Active Licensees!  I hope this message finds you all doing well and business is booming!
I was in the process of preparing a newsletter regarding Contractors and some particulars associated with recruiting and developing them, but I will momentarily put that newsletter on hold to share with you a Contractor related issue we recently received from a Licensee.

Situation: The Licensee received the following image taken by the Contractor after delivering a six piece living room suit:
According to our Licensee, everything worked out well.  The Contractor picked up the furniture from Ashley's and delivered it a short few miles down the road without a problem.  Once complete, the Contractor sent text the image to the Licensee with a message claiming he "should have been paid more because it was powered furniture and more heavy."  

Our Licensee was, rightfully so, a little offended by the message.  The Contractor has been working for the Licensee for several months and has been very generous in providing increased opportunity and already given him an increase in commission to 72 percent.

Our Licensee contacted us to ask if we charge more for pieces weighing more, for which we don't, but let me share some thoughts and suggestions regarding the subject in the event you experience such an issue:
  • When it comes to Deliveries, we charge per piece.  The first three items are included, anything above 3 pieces is $5 per piece.  So in this scenario, in my broker business, an additional $15 would have been added to the work order

  • For freight work, charging by weight can be necessary.  But for this type of work, it's just not feasible to charge by weight.  First, your Contractors aren't going to be carrying scales.  It's ridiculous.  Second, you can't expect a customer to try and determine or itemize various weights of each piece to share online or over the phone when creating a work order.  Again, ridiculous.  

  • Most importantly, you don't want to "nickel and dime" your customers.  You're already charging a base rate, mileage, piece price (above 3 pieces), possible stair charges, and customer surcharges if processed over the phone.  All of these charges can be legitimately substantiated.  But to attempt to charge for items you, essentially, "specialize" in delivering is too much.

  • Encourage your Contractors to keep things in perspective.  This work order was over $100 so, realistically, he made a decent dollar - especially when you consider the delivery was right down the street and took less than hour.  I suspect, if not for this Licensee, this Contractor would not otherwise make $70 per hour.  

    Further, I highly doubt this Contractor complains when his work orders consist only of a mattress and box spring or something else that is light and expeditious!  Does he offer to refund money to the Licensee when work orders are too easy?  I suspect not!

  • Remember, in addition to commission, Contractors earn tips - cash tips.  It is very realistic for Contractors to earn an additional 10 - 20% in tips per week.  When you think about it, tips alone add up to a sizeable amount.  Just as Customer Surcharges help pay for those answering your phones and put extra money in your pocket, so too do tips help protect and insulate Contractor commissions.
I hope these quick thoughts and insight are of help to you in the event you experience any Contractors complaining of work order related responsibilities or rates of reimbursement.  Again, ensure they keep things in perspective.  Commission rates of 70% and above are FAR above ANY industry standards.  And when you further consider tips, your Contractors make good money!

See you at the Top!
Joel E. Davis

PS: Keep checking your email.  I will finish the other newsletter very soon where I will share more details about managing Contractors.
Maximus Management Group, Inc., P.O. Box 10, 13737, Bible School Park, United States
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