Too Good To Be True

If you’re think something seems to good to be true than it probably is. These days There are all kinds of phony marketing gimmicks out there, increasing the need for consumers to shop with that familiar old saying in mind. In this article, I’ll explore some of the typical marketing ploys seen in today’s paving stone industry.

One recent pavestone ad I saw was a combined offer for free demolition (removal of the old concrete, dirt or asphalt), plus 35% off the entire contract price, plus a $500 gas card. I thought this was truly amazing. The obvious ploy here is that their prices are inflated from the beginning and they are eventually “discounting” them down to the market average price. While value engineering is needed in order to attract potential customers, these price drops in excess of 20%, free demolition and other perks like gas cards are simply too good to be true and are false discounts.

Now, without going into a detailed math and product needs lesson, let’s put the direct job cost for a proper 1,000 square foot paving stone installation at around $6,200. This is only the direct costs associated with the pave stone installation itself, and does not include general business operating expenses (overhead) such as vehicle payments, gas, advertising, office lease, phones, etc. In keeping with the $9,000 contract value, we’ll say the overhead and profit tacks on an additional $2,800.
So, starting with our $9,000 estimate ($6,200 direct project costs + $2,800 overhead), let’s begin the discounting process.
$9,000 – 35% ($3,150) = $5,850 (new contract price, after discount)

Being in the business, we know that in 2009 the market average sale price for a proper paving stone installation is around $9.00 a square foot. That’s assuming a basic paving stone such as an Antique Cobble, Holland Stone, Bishop’s Hat, etc. is used. A driveway, patio, walkway or pool deck paving stone installation of 1,000 square feet should have a final price tag of around $9,000. Depending on how lean the installation company operates, a 5 – 10% discount may be achievable.

This contractor would effectively be paying out of pocket to install this paving stone project, and remember, that’s before paying for his truck, gas, office and cell phone, among other things.

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