ᐅ Cost increase surcharge for the kitchen after contract signing
Created on: 13 Oct 2021 07:47
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exto1791
Hello everyone,
Yesterday we received the final offer for our kitchen, and we noticed the following clause in the offer:
"The offer is valid until 28.02.2022. If the kitchen is accepted after 01.03.2022, we unfortunately have to charge a price increase surcharge of 4.5%."
I don’t quite understand this. If I place the order for the kitchen now, I am committing to the price in the offer, so I shouldn’t have to accept any surcharge. We are planning to move in around April/May, so it’s quite possible the kitchen won’t be accepted before 01.03.2022.
The dealer’s response was that the kitchen should be taken into stock by February next year, meaning the kitchen would need to be measured early enough once the plasterer has finished. Then it might still be possible to avoid the surcharge.
We are really very, very happy with our kitchen builder, but I honestly think this is unacceptable. What experiences have you had with this? Is this actually common?
Yesterday we received the final offer for our kitchen, and we noticed the following clause in the offer:
"The offer is valid until 28.02.2022. If the kitchen is accepted after 01.03.2022, we unfortunately have to charge a price increase surcharge of 4.5%."
I don’t quite understand this. If I place the order for the kitchen now, I am committing to the price in the offer, so I shouldn’t have to accept any surcharge. We are planning to move in around April/May, so it’s quite possible the kitchen won’t be accepted before 01.03.2022.
The dealer’s response was that the kitchen should be taken into stock by February next year, meaning the kitchen would need to be measured early enough once the plasterer has finished. Then it might still be possible to avoid the surcharge.
We are really very, very happy with our kitchen builder, but I honestly think this is unacceptable. What experiences have you had with this? Is this actually common?
exto1791 schrieb:
I agree with that. He can order the kitchen without measuring in advance, right? There are plans he can follow, aren’t there?
According to what he said, it’s probably because if they can measure the kitchen in time beforehand, no additional costs will arise?
But you guys have already ordered, and the parts will be stored, right? Exactly, it will be stored. However, our house is already built, and the precise measurements have been taken since then.
chand1986 schrieb:
I keep wondering what the alternative would have been: to point out with every revision and new quotation that there might be a price increase, but without knowing exactly how much or when? chand1986 schrieb:
And this, while with every correction requested by the customer(!), the parameters could change again? chand1986 schrieb:
In the final quotation, which was prepared according to the customer’s timing, there is a percentage clause with a fixed date. The advantage of percentage surcharges is that they adjust according to the volume. That’s exactly why this price adjustment clause could be included in every quotation. “Quotation price valid if measurement is confirmed by XY date; after that +4.5%, legal jargon legal jargon blah blah.” A commercially smart approach would also include a time frame, for example per quarter, month, or something similar.
I don’t understand why this should be such a big issue and why so few see this as the usual customer-friendly procedure here.
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chand198614 Oct 2021 09:58Tolentino schrieb:
I don't understand why this should be such a big problem and why so few see it here as the usual customer-friendly procedure.The issue may be that it is not always clear what percentage is needed by when to keep the calculation from becoming too volatile. The unpredictable market has also shortened the foresight of salespeople who rely on forecasting. If there are then 7 rounds of revisions before a final decision is made, I can personally understand the process and don't see it as unfriendly to customers. It is also possible that the fixed percentage and deadline were only set by management after the last revision.
I understand and support customers openly expressing their concerns and seeking a solution. Constructive suggestions have been made here for that purpose. However, immediately assuming there is a fundamental problem in customer relations just because "it’s not supposed to be like that," in my opinion, is being too petty.
Sorry, but that would simply be poor business practice. As mentioned, it’s not about the percentage rate. It could be 10% or 0.5% per day.
The issue is that this only applies at the very end. The changes and corrections have nothing to do with this, as they affect the base offer price itself. The inflation surcharge is meant to cover the period from contract award to production, to ensure it doesn’t become too high. And that is completely legitimate! But in that case, I communicate from the start how much time I expect for that (without inflation) and how much it will cost afterward. Or not, but at least that I am only committed to it until X date.
The issue is that this only applies at the very end. The changes and corrections have nothing to do with this, as they affect the base offer price itself. The inflation surcharge is meant to cover the period from contract award to production, to ensure it doesn’t become too high. And that is completely legitimate! But in that case, I communicate from the start how much time I expect for that (without inflation) and how much it will cost afterward. Or not, but at least that I am only committed to it until X date.
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hampshire14 Oct 2021 10:40exto1791 schrieb:
I have already invested such effort as both a client and a supplier in many different areas, and I would never think of "charging the money" after just 2-3 planning rounds. Wow... That’s just part of the job? That’s called daily bread of the work? No, that is not the daily bread of the work – it’s unfortunate if you assume that based on your own experience.
If I cannot or do not want to meet a potential client’s demands, I simply don’t provide a quote or I withdraw it. Someone who does not value my work upfront cannot become my client. As a business owner, I protect my employees from such situations and give them the freedom to act. In the end, service providers lose out, accept that employees suffer, and still receive no gratitude even when delivering good performance.
The daily bread of the work in well-managed companies is to collaborate together on equal terms, to value people, and to shape the future.
Tolentino schrieb:
Sorry, but that would simply be poor business practice. As I said, it’s not about the percentage rate. It could be 10% or 0.5% per day.
The point is that it only applies right at the very end.
The changes and corrections don’t have anything to do with this either, since they affect the base offer price itself. The inflation surcharge is meant to cover the period from contract award to production, to ensure it doesn’t become too high. And that is perfectly legitimate! But then I communicate from the start how much time I allow for that (without inflation) and how much it will increase afterward. Or not, but at least that I am only bound to it until a certain point. Objection: if you bring this up right at the beginning, “it will be more expensive in x weeks, decide quickly,” the customer also doesn’t like it and feels pressured.
Maybe the kitchen showroom just wants to get this order off their desk, whether the order is placed now or not. Just close the file. 😉
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