Why are Plumbers in Melbourne so Expensive?

Business expenses are expensive business

Gulp. Make yourself a coffee, I’m going to lay it all bare and give you utter and complete transparency on our business operational costs. Why? To try and give you some more information on why plumbers charge the way they do for seemingly ‘small jobs’, and help you answer ‘how much does a Melbourne plumber cost?’.

First, I’m going to tell you a story I read about six years ago, a few years after we became business owners. It was just one of those news articles that pop up on your social media feed. I remember reading it and immediately afterwards decided to never, ever question the price of food and beverages at cafes and restaurants ever again. Not that I ever did, food is my ikigai.

Long story short, a café owner copped a 1 star review; an injection of instant misery for a small business owner. The review was scathing of the price of a cup of lemon water; £2 (about $3.50). The reviewer was raging about the expense being out of her budget, and ridiculous as a lemon doesn’t cost that much, neither does hot water.  Rather than an apologetic response, or no reply to the review at all, the owner decided to draw out his business operating costs in relation to said cup of lemon water.

In summing up his response (his was much more loquacious) he remarks:

• “First the waiter showed you to your seat
• He gave you your menu, and waited for you to be ready to order
• He then took the order and entered in into the till
• He grabbed a cup, saucer and spoon and took them to the kitchen
• He grabbed a knife, chopping board, and a fresh lemon from the fridge
• He cut a slice of lemon and put it into the cup, along with some hot water
• He carried your cup to the table
• When you were leaving, he printed the bill and took it to you
• Then he processed your payment
• When you left, he cleared away the cup, saucer, spoon and wiped your table down
• Then he washed and dried the cup, saucer, spoon, knife and chopping board, putting them all away
• About 3 minutes of the waiters time all up
• That doesn’t include the business’s overheads that need to be considered on top of materials (lemon, water) and labour (waiter)
• Business overheads of rent, council rates, electricity, gas, water, bank charges, etc is about £27.50 per hour.
• Labour is wage, tax, superannuation approx.. £12.50 per hour per waiter (so about £40 per hour, or 67p per minute of operations
• Given the customer took up 2-3 minutes of time, at about £1.34-£2.00 (plus GST!) takes the cup of hot lemon water to £1.60-2.40 cost price”. That’s before profit…

A $5 coffee doesn’t sound too unreasonable then?

How much does a Melbourne Plumber cost?

There are many common misconceptions about plumbers and the price of our works. “It’s only a five minute job”, “It’s a small job”, “You must be rich charging that much!”, “Doctors don’t earn that much per hour”, “You’ve got to be kidding me”… . Thus, why I’m here today purging myself of all of our business costs to give you an understanding of what exactly makes up your plumbing bill, like Mr. Café owner did all those years back. It’s not a woe-is-me sob story (we choose to be in business), its simply to inform our clients why we charge the way that we do and why a simple ‘small job’ still requires a minimum charge out.

So here goes, what makes up our plumbing charge out rates:

Those pesky business overheads

AKA the costs of operating a business. These aren’t linked to any service, they are the costs that have incurred even before your toilet in Point Cook has blocked! Firstly, as we are a mobile service provider, we have many vehicle expenses including vehicle registrations, maintenance services, fuel, tyres, vehicle loan and tolls (although we try to avoid those).

Next, insurances. Plumbing public liability insurance is extremely HIGH, in Victoria especially, due to a ministerial order that covers ALL plumbing works, even if a plumber does not do that certain type of plumbing. The holistic nature of this insurance means insurance providers charge high premiums to cover absolutely every possibility. Plumbers cannot keep their plumbing licenses without this insurance in place. We are insured for $20 million to cover our clients and their projects.

A licensed plumber must study for 6 years before they gain their plumbing license. This includes a 4 year apprenticeship plus an additional 2 years for a Cert IV, and proven plumbing management experience. It’s not just digging holes and smoko; we have one of the most diverse trades around from roofing to gas fitting, sewers and HVAC.

An unlicensed plumber or amateur tradesperson has no public liability insurance for any plumbing works. Public liability insurance can only be attached to a valid plumbing license from the VBA (it’s called illegal plumbing if an unlicensed plumber conducts the works).

We also need to pay Workcover insurance to protect our team in case of a workplace accident, cyber insurance (this is a new one), vehicle and equipment insurance, factory and contents insurance, tool insurance and professional indemnity insurance (for rectification reports).

We are plumbers, and therefore aren’t experts in every field, so we require support from Accountants, IT consultants and web developers. We try and keep our marketing costs low, but we do need to factor in advertising costs to ensure our clients know we exist.

Then there are miscellaneous office expenses such as printing (we try and be as paperless as possible), electricity, water, council rates, coffee for Kathy (she doesn’t know I buy the coles brand coffee beans though shhhh!), computer program subscriptions, factory rent, rubbish removal, telephone, internet etc.

Material costs

We need to purchase tools and equipment to get your plumbing job complete. We have a good range of tools and equipment, but occasionally need to hire in equipment we use rarely, and pay for our tools to be serviced (CCTV camera, drain jetter, excavator). We also need to purchase materials to complete almost all plumbing works. Why are some of these materials cheaper if you buy them from Bunnings yourself? Because we need to factor in the costs of travelling to get the materials, or the postage costs of our material orders.

Labour costs

We’ve got a team of 14 plumbers currently, which means we can often be at your emergency plumbing job in Wyndham and surrounding areas in just 1-2 hours. Having a few bums in the office chairs ensures we can answer your call immediately and give you a quote there and then on maintenance plumbing. Our Operation Manager is there to get your complex quote (like a bathroom renovation or roof rectifications) out efficiently and can also assist in troubleshooting and diagnosing over video call to assist our field technicians when required.

Even though they love their jobs, they aren’t volunteers like me (jokes. sort of.). We need to pay these guys a salary, LeavePlus (a compulsory portable long service leave for tradies), superannuation, allowances and payroll tax (yuck).

We provide our team with training (like how to operate a drain jetter, meaning your drains are cleared more efficiently saving you money) and also provide them with PPE for their safety, and uniforms so you know its not just any old bloke turning up to your home.

Have I covered it all?

I could get really focused and list the eraser I bought for the office yesterday, or the bank fee we incurred when we paid a supplier bill, but let’s just agree on the fact that all businesses operate on the premise of having overheads, and unfortunately trade businesses have a LOT of overheads.

Profit comes after all of the above expenses are accounted for. And ONLY after this. If you see me driving around in Point Cook, where I live, you’ll see I’m not driving around in a sexy Lamborghini (note: I do not think Lamborghinis are sexy). I’m not dripping with bling (I actually lost my wedding ring, oops) and I do not own a designer handbag because Kmaaaaaaaaaaart.

We don’t charge what we do to rip people off. We want to be your lifelong plumber, so we care about our clients and we live here! Why would we want to get a bad reputation in our own community? WE don’t rip our clients off, however…

There ARE plenty of cowboys out there…

And they WILL rip you off. And your neighbour. And your Grandma. And quite frankly, it makes us sick. Do you know what’s worse, they aren’t just on A Current Affair for a dramatic story line. They are real and they exist in our local area.

How can you tell if you are getting conned? What do rip-off plumbers look like?

1. The unlicensed plumber. These guys are plumbers without that expensive insurance I discussed earlier. They’ll often have no website, and no plumbing license number. Do your research, and don’t pay anything upfront.
2. The not-a-plumber-at-all plumber. These are handymen that say they can do it all, including plumbing, and are often found lurking on HiPages and Airtasker spruiking ‘cheap plumbing’.
3. The big bad wolf. Guess who, don’t sue. They’ll have the $0 upfront fee to get their foot in the door, the fancy fluro vans, always first in the google ads and often have their own jingle. They are the KINGS of sales, so if you choose one of these fellas please don’t let them talk you into a full bathroom renovation when you only need a new washer on your kitchen mixer tap; yes they are THAT good, and how do you think they can afford the commission for their super sales team?

How can I tell if a quote for my plumbing works is too high or too low?

We’re transparent with our quotes so our clients don’t get any rude shocks come bill time. You’ll either know EXACTLY what a plumbing job costs with a fixed price service (like a new toilet installation or fridge water connection point) or you’ll be given our hourly rate and incremented 15min block rates (for unblocking drains).

Give the team at McCarthy Plumbing Group a call now on 9931 0905 for a transparent plumbing quote that won’t get you, or us, on the telly at 7pm weeknights.