Posted by Mike on July 31, 2007, 2:33 pm, in reply to "Re: Response to Charles"

I still think it is worth exploring a ‘pay per check’ volume discount arrangement in the future. After all, if take-up against a fixed price arrangement is only 50% then a plumber could almost double his quote for ‘pay per check’ and it would still be a better option for BWFL. However, there is really no reason to expect that a ‘pay per check’ quote would be double the fixed price quote. Most of the reasons for being able to offer a volume discount apply whether the plumber is carrying out 200 checks on a fixed price arrangement or 200 checks on a ‘pay per check’ arrangement. It is all about assuming risk. Right now, BWFL is assuming all of the risk (that people decline the checks). A ‘pay per check’ arrangement shares that risk with the plumber and a small increase in the quote per flat is acceptable for that. The other benefit of having a ‘pay per check’ arrangement is that it avoids the criticism that some leaseholders have raised. They say that the plumber is somehow taking advantage of BWFL (and therefore the charge payers) by being paid for 100% checks but only needing to perform a lesser percentage. In the mind of some people, that seems to set them as anti-plumber and therefore anti-plumbing checks.

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