Episode Transcript
[00:00:02] Speaker A: Welcome to the podcast about lighting matters. Our unflinching conversations uncover the nuances and complexities which shape the craft of lighting design.
[00:00:11] Speaker B: We explore the pivotal whys behind a lighting designer's choices and find honest answers to your most challenging lighting questions. Because lighting matters.
Welcome to the Lighting Matters podcast. This is episode number two, and I know you're in for a really exciting, exciting conversation today. I'm Lisa Reed with Reed Birkitt, lighting design. I'd like to introduce my co host.
[00:00:38] Speaker A: Avi Avraham Moore with more lights, based in Chicago. And we're so excited to have Derek Barnwell with us from available light. Hi, Derek. Thank you for joining us.
[00:00:50] Speaker C: Indeed. Thanks for having me.
[00:00:51] Speaker A: And this episode is made possible by our good friends at LSI Lighting Services, Inc. Not the other LSI.
[00:01:02] Speaker B: That's how we all talk about it, doesn't it? LSI and the other services.
[00:01:07] Speaker A: I don't know about you guys. I think I do. But, you know, they are one of our favorite partners when it comes to track and lighting in museums. You can spend a whole podcast just talking about all of their different stuff and how great it is and how great they are. I think that goes into, for me, one of the most important parts is you can have great product, but then be terrible people. But this is a company that is great product, amazing people, and, you know, will help in anything. And they always like new stuff, too. You know, Zacato came out. They're like, oh, yeah, let's try that now. Ooh, DMX and Dolly on track. Oh, yeah, let's try all those things. I've always really enjoyed that about them.
[00:01:50] Speaker B: Derek, you do a lot of museum design, right? I'm sure you have some LSI stories.
[00:01:55] Speaker C: Yeah, it's about 50% of our core businesses is museums. And LSI has been our a spec for decades, literally decades, and they have been there for us. We designed a fixture for them. We wanted to call it the venti, but they said, no.
[00:02:16] Speaker B: They let you do the fixture design.
[00:02:18] Speaker C: But no, they let us design it, but we couldn't name it. So it turned out to be the SSL 238 230 series. But Venti is always close to our hearts. And, yeah, they've just been a great partner for us. And that's really how I view them relative to our work, is that they're a really good partner. They have just been there for us in all good times and bad times. And the bad times are the best stories, because the good times are just stories, right? But they have definitely bailed me out of a jam or two. Self made. Self made jam or two. No doubt.
I know that I can get them on the phone. I can get somebody from LSI on the phone most times of the day. That alone is worth the spec, because if I could pick up the phone and the president of the company gets on the phone, from that on down to whatever, whatever piece of personnel needs to deal with, it is fantastic. And that peace of mind when we go onto a site that we are going to encounter a lot of unknowns. Having that peace of mind is the thing I don't have to sweat.
[00:03:30] Speaker B: I think a lot of businesses say this, but lighting is such a relationship business, and that's what's really important about them to us.
[00:03:38] Speaker C: Yeah. When I think about led tape and I think about how special that used to be 25 years ago, super unique product, and now it's a Home Depot product, it's a commodity product. So if we're specking something like that, the only thing that sets a lot of those products apart is who's on the other end of the phone.
[00:03:59] Speaker B: So that's a great segue. Derek, who are you and how did you get here?
[00:04:04] Speaker C: So I've been with available light now for 18 plus years. Steven Rosen, our president, creative director, and I have had a relationship for 25 years. I guess I had an option to join the company around 2001, and that didn't work out just for some political reasons in terms of who I was working for at the time. And Steven wanted me to go to work for him. And so we finally pulled it together around 2005. So I started out as a senior associate and have been hanging around ever since. I've spent about ten years, maybe nine and a half years in the Boston office, which is essentially our home office. We have five offices around the country now. I moved back to Raleigh, North Carolina, which is where I was born and raised almost ten years ago. Set up a remote office. So I did this remote thing nearly ten years ago. Before.
Yeah, before it was a thing. And it was really awesome. It was a great experience for myself, and I think it helped the company understand that we had a New York office and a Boston office, and they both did their own discrete work. The New York office mostly worked on New York projects and or New York based projects out of that office, and we didn't cross pollinate too much. And then when I came here and set up an office with nothing more than a monitor and a printer and a Wi Fi connection, I was able to also work with everyone in the company. And I think that helped under, helped everybody understand, like, oh, the brick and mortar isn't something that we need to adhere to as a part of our daily practice. It's not there for me. And so when Covid came around, it was quite an easy transition for me. I've been doing it all along, and so it was very helpful. And if there was a positive thing that came out of COVID it was the fact that we all got to work with each other. Now every office was now working with her. And so we all sort of came together a little bit better and understood each other's needs. And so then there wasn't each other anymore. It was just us and the ether. Virtual uss.
And thank God for slack.
[00:06:14] Speaker B: Oh, yeah.
[00:06:15] Speaker A: Oh yeah.
[00:06:16] Speaker B: 100% blessing and a curse.
[00:06:20] Speaker C: Well put.
[00:06:21] Speaker A: So one of the things that Lisa and I talked a lot about in creating this podcast is we wanted to take the conversations that happen at dinners, on show floors, at manufacturers offices, and reps offices, when reps come to you and put it in the public space for each other, our customers, our clients. And one of those subjects that I think is a constant challenge in the lighting industry for everyone involved in the lighting industry, is pricing, both in the process of budgeting and pricing. So the goal of the conversation today is to kind of learn how you kind of approach that. And I think based on talking about multiple offices, we can even talk about the problem of, well, who actually specified it and then who gets that credit? And I throw one other piece out before I throw it to you, Derek, is this is in the public space, right? This is going to be shared. And one of the things I loved about us getting together recently was you and I kind of think the same, and we don't keep anything. So this is, you say what you want or not want, but ultimately, this has to be discussed. So with that, like, maybe take it away. Like, what are some of the things you're doing and some of the challenges that you're seeing?
[00:07:43] Speaker C: Well, it's the 800 pound grill in the room. Always, always. And let me just reference the remote office notion and multiple branches, because this is a really important aspect of this. So we're going to talk about design up to this point, right? So we've designed this project, and as we're designing, we're gathering pricing all the time. And that is part of our deliverable contract is estimated hardware cost per phase that we deliver. So we're trying to mitigate the surprise at the end. And working with a remote office, it's very important. So reps are also, reps are a partner in what we do.
They are there all the time. We can't spec what we don't know, so we count on them. They're an essential part of the process.
I have reps in my area, and every office has reps in their area. And I should preface this a little bit by saying I was a rep for two and a half years in the Boston market. I highly encourage people who want a career in the lighting design business to spend a little time doing that because it will make you a better lighting designer. It will equip you to know the game and how to defuse the game or beat the game or run your own game, you know, for that, for what that's worth.
[00:09:01] Speaker B: All true. I've sat in that chair, too.
[00:09:04] Speaker C: Yes. It's just a valuable thing. So we have reps in my area code, and then I've got designers in Boston, in New York and LA and Phoenix, and there's reps in those area code. But it's very important to honor a reps time and their investment in what we do and not to hose them. And that wherever a spec is coming from, whatever office it's coming from, that is the rep base that we use. So if I'm working on a project that is in Charlotte, North Carolina, and I'm in Raleigh and spec is coming out of the Raleigh office, my designers in New York or my designers in Boston or whoever talk to my reps that are local to the 919, they're the people who are going to see the benefit of their work. A rep in New York or rep in Boston, because the spec is being issued out of Raleigh will never see any of that. And it's not fair to take up their time and to put them on the hook for information. So we established pretty early on that whatever office suspect was coming out of that local based rep group of all the players there would be the reference for information, consequently, which is awesome. I have all our New York designers and our Boston designers and our LA designers know reps in the Raleigh, North Carolina area because they're constantly communicating with them. And so we try really hard to adhere to that. Occasionally, you know, if I'm stuck or hung up or something, I might call a dear buddy from my old rep, from my boss and say, hey, can you just give me an answer real quick? You know? And they mostly say, sure, we'll take care of that. That's fine. There's no, there's no, yeah, there's no expectation there.
[00:10:45] Speaker B: That's relationships again, like we said.
[00:10:48] Speaker C: Right. And if you hang around long enough, just long enough, you'll make a few relationships, and sometimes they'll come back to help you a lot. So that's how we approach that in terms of just dealing with the players, to making sure that it's equitable for everyone and that everyone's time is being respected. That's really important.
[00:11:08] Speaker B: I mean, I know if we can pull on that thread a little more, I know a lot of offices are dealing with that now. We've, you know, remote, even maybe just a remote employee working out of, you know, we have people in St. Louis who work out of New York offices. We have offices in St. Louis with employees in Minneapolis. So, yeah, it's something all the offices have to, have to work out.
[00:11:31] Speaker C: It was an incidental byproduct of just, oh, I'm coming here now. I've got to meet the reps here. And we had to make a conscious decision about how do we handle this reps crossing territories, because territories and reps are, you know, territories, reps, territories, distributors, that's all a big part of this mess. I call it a mess.
[00:11:52] Speaker A: I wonder if we should sidebar for some of our listeners who are not fully aware of how this all works and spend a moment for our more experienced listeners. They might be like, yeah, thank you. Skip for a moment. But just getting clarity as to manufacturer, Rep, distributor, contractor, and this whole idea of territories and commission and how commission's broken up because it's not in the public space really.
[00:12:24] Speaker C: Right. And a lot of reps are comfortable with it not being in a public space.
A lot of like when you learn some of the tricks of the business and you learn how they speak and how they protect whatever litter box they're in. So it is a very territorial driven notion. Reps, they have areas. Those areas are pretty well defined. And manufacturers have set, they go into a particular area, whether it's a market. So to talk about the Boston market or the Chicago market, you know very well in the LA market, and they say, okay, we have, we're going to pick this rep agency. It's also important to know that rep agencies work on 30 day contracts every 30 days. And that goes both ways. So a rep can fire a manufacturer in 30 days and a manufacturer can fire a rep in 30 days. And that happens an awful lot change more than NFL team rosters do, no doubt about it. So the way the manufacturers typically set up a rep is they enter a contract with them and they pay them 10% of the sale. Or sales orders they take. I mean, generally it's 10% is the accepted rate.
[00:13:35] Speaker B: Yeah, there's the sale, but then there's spec credit.
[00:13:40] Speaker C: So then. Yeah, so. Right. So if you're a designer and you're in this area code and the project is in this area code and the rep is in this area code, that is just a no brainer. Right. But we, you, all of us work across the country and sometimes across the oceans. And so how does that work out? Well, there are typically agreements between the specifying rep by rep and the ship, the ship to rep, because now projects are being bought more often in places where they are not, where the project is not, the project is purchased somewhere else. So typically it's normally like a 50 30 20 split. And this is what's really important at the beginning of your project, when you're talking to your reps and they ask you that question over and over again. Can you tell me the name of the project? Can you tell me where it's located? And so I just need a price for the sconce. Like, I don't want to tell you that yet, but they need to register projects. They need to get them in their system and be able to track that all the way through, because they live from commission to commission. It's a commission based business. And so whatever project you're working on today, let's pretend the spec goes all the way through to the end, and the manufacturer that they rep got an order. They'll get a commission check 30 days after that. Well, what's the duration of our design processes? I don't know. Twelve months, 18 months.
[00:15:07] Speaker A: Well, and Derek, we should clarify. Like, it's 30 days after the distributor pays the manufacturer, which is after the electrician gets paid, which is after the general, which gets paid, which is after the client gets the money from the bank or the loan, which da da da da da. So, you know, and after all the.
[00:15:28] Speaker C: Liens have cleared on the project.
[00:15:31] Speaker B: Right.
[00:15:33] Speaker A: So, and we all get paid really fast, too. So, you know, like, you can, you can just imagine what length of time that they're working on these things.
[00:15:42] Speaker C: So when a rep develops, an agency creates an agency, they're not going to see any compensation for their work for a year and a half or two years. So that's why it's very important for them to get our project work into their system, get it notated, track it, stay on top of it and protect it. They're really literally protecting that project from a bunch of vultures, possibly, that are going to come and pick at its bones throughout the process.
[00:16:09] Speaker B: Right. And somebody can say, I sold that project and they have to prove that they helped us. The specifier, right.
[00:16:16] Speaker C: So the only way you can do that. It's funny, you know, I'm a bit of a musician, and I understand this notion of copyrighted music. So it's kind of like they have to copyright this project that they're, that they first engaged you on to stake out that. On this day, I talked to this, I gave them a sample, I, we had a visit about this project. So that, so when the other rep from the ship to district or the purchase district sticks their hand up in the air and says, hey, you know, I, that we bought that through our area or that ended up in my backyard. And it's really important to understand the specification rep is really responsive, I think is ultimately responsible for the pricing because they give us the budget pricing, which means that pricing should follow through, right. Because everyone else wants to get that little piece of that pricing, right.
[00:17:03] Speaker A: I've learned that there are some manufacturers where the specification agent sets price, and there are some manufacturers that the local agent sets price. And we're actually dealing with a challenge right now with one of my favorite manufacturers who hasn't agreed to sponsor yet.
But ultimately they said, well, we needed to inform the rep in this locality, the job, so you could get a budget price. I was like, what?
[00:17:34] Speaker C: No, that's why. So the validity of pricing, once it's outside of your area, you don't have control of it anymore as much as we have control. But I have documentation. When we enter pricing into our database for a project for what that we're budgeting, we note the date we got the price and who we got it from. So they're kind of on the hook for that number, whatever it is. And if a manufacturer allows the buy rep or the ship to rep to be involved in the pricing. Oh, I don't know that pricing anymore. I got my pricing from my local rep here and I assumed that number was true and was going to carry through, which meant all of you should have been talking to each other all of the time about Project xxx.
There should have been a level of continuity that followed through the pricing, because someone at the other end is going to get greedy or say, I had a bad month last month, I gotta fatten this one up.
[00:18:32] Speaker B: And then how does that make you look to your client or the owner when you said it's gonna cost this much and then it doesn't?
[00:18:40] Speaker C: Yeah, that's the that's the real crux of it, is because we provide this pricing as we go. First of all, we're, you know, we're the defender of the project, and we're trying to protect our client from the wolves and protect our reputation and the value that we bring to the project. They look to us because we're the expert. You hired us because you don't know. Right? And so you trust us to know. And when then that number gets out of our control or starts to flow downstream. And remember, we do all our design work, and this project goes away for 18 months. So we've been dating the owner and dating the architect for this amount of time. And then we break up, and then this general contractor comes in, and they're now dating the owner, and they're whispering in the owner's ear. Now, your ex just cost you so much money.
[00:19:32] Speaker B: That's such a great analogy.
[00:19:34] Speaker A: It's just so awesome.
[00:19:36] Speaker C: Just, you should never, ever talk to them again. And we're left on the hook when these numbers that have commas and zeros coming back at us. And then the rep who's now. Who broke up, I mean, the owner who broke up with us a while back is now looking and saying, hey, you know those guys who whisper in our ear every day? It seems that they're right.
Well, you're dating the devil, so. Okay. They probably do sound like they're right, but. And so then we have to defend our numbers. And that is a magic moment. That is a magic moment for me, that gets me out of bed in the morning. Really?
[00:20:13] Speaker A: Because I think it's clear. We want to be clear, right, of the. That. That second whisper that happens every day. They're making money. They have a markup on whatever that value is. Right. So the higher that is, the more markup they get. And typically, I'm sure you both see this. They don't have line item pricing, and they don't have. They don't provide any of that. It's just this huge number, and the owner doesn't know what they're talking about. It's just some big old number. Okay, so why our side isn't.
[00:20:45] Speaker B: Why don't they have line item pricing in the. I think it's Michigan. I feel like there's, like, a state law or something that we have line items on our Michigan projects for fixture types in the bid documents.
[00:21:01] Speaker C: We write it into our specifications. And, of course, they just like you and your funny little stipulations, you know, we'll crush you like a bug. So we also asked for line item pricing as part of our notes and our specifications, of course, our fixer schedule. Your fixer schedule. All of our collective work. That's a legal contract. I mean, that's a legal document. So we put it in there. We whimsically put it in. You will provide line item pricing for this project. So if we ever got into the super litigious spot on it, our lawyer would say, hey, you bid on this document. It says right here in this document, your honor, that they were supposed to do that. And, you know, we know the shell. It's a shell game, right? It's all a shell game. And so the shell game has many players, from the rep to the distributor to the contractor to the GC. And then occasionally, there's a few bad actors that slip in there. There's the bootleg project where they're bootlegging gear in from another area, and the local rep doesn't see it. That's a whole nother podcast we could do about. But that is a dirty game that happens. So, tracking all of this and defending our honor is essentially kind of a full time job, which sucks, because it's an adjunct part of what we do. It's like, okay, well, you guys said you supply this pricing, and the owner's trusting that the pricing and then the numbers come back, and it's like, okay, well, now we have to get everyone on the phone and start pulling that little thread and that sweater and seeing where it unravels. And I tell all of the people who, all the people that work with us, one of my mantras is, you have to be really comfortable with making people uncomfortable unless you were willing to get on the phone and whip out a bag of righteous anger on a group of people who you don't know, you hadn't met. And by the way, you better be right. You really better be right, because righteous anger is only as good as your facts, right? But when you are, because we are protecting the honor of the job, if none of this mattered, then there would have been no reason to hire us. You could just let electrical contractor design the job. You could let a rep design. You could let anybody design a job. But somebody invested in your time, our time, to bring value to this process and to let someone pervert the process, you know, at the way, at the back end of it, when your head is, by the way, distracted into current work you're doing because the work you did happened 18 months ago, it's like, you know, it's like, no, you're like.
[00:23:42] Speaker B: You'Re dating someone else now.
[00:23:44] Speaker C: Yeah, that's right. And it's like, you know, the light. The light you see from the stars happened a long time ago. Well, the budgeting. The budgeting numbers coming back happened a year and a half ago. You are really busy right now working on all the design work you have. I got to stop. And now I have. I have to unravel your mystery, and I. That's part of the game. And lighting in the construction industry is really. Is the black eye on the construction industry. It really is. Everyone knows what conduit costs. Everyone knows what concrete costs. Everyone knows what sheetrock costs. Those are well understood numbers. But lighting is this black hole of pricing and markups. It's a discipline to know it all. This is why a little experience in the rep game really goes far. Because if I'm having a conversation with some reps and I get a rep on the phone from, I don't know this person, I never met them, I can just say the word overage, and if I drop that word, they know. Oh, God.
[00:24:42] Speaker B: Oh, he knows.
[00:24:43] Speaker C: I don't. Oh, God, he knows. He knows.
[00:24:46] Speaker A: And what is overage, Derek?
[00:24:49] Speaker C: Well, overage. Well, let me tell you, Avi, thanks for asking. Overage is this. I referenced before that rep agencies work on contracts that are basically set up where they make 10% commission on orders that they get to run a business on. 10% commission is really, really hard. Any kind of business, if you're a big market business and you've got 30 employees in your rep agency and you have 125 lines, there's a lot going on. You got inside sales staff, you got an outside sales staff, you've got admin, you've got brick and mortar costs. You got all of it. It costs a lot of money to run a business like that. So trying to run that on 10% is really tricky. So there are deals cut between manufacturers and reps. And what happens is when a distributor gets your fixture schedule and they go to the rep and they say, I need pricing for this fixture, the rep then takes that fixture, feeds it back up to manufacturer, manufacturer comes back with a number for the rep to give to the distributor. That number doesn't really have a name. It doesn't have the number. Doesn't have a name yet. It's going to have a name in a minute, but it doesn't have a name yet. It's just a number. And then a rep looks at that number, and they make a value judgment on what they think that fixture is worth. In their market. And all factors that come into play on that are, how do we do last month? How are we doing next month? Who am I competing with? Am I fighting off a rep who's trying to sub the project? All these factors come into when they think about what this $150 downlight costs, right? Because the manufacturer told them, we're going to sell you that one downlight for $150. So we typically deal in pricing and single unit pricing only understanding that budget discounts exist, but we can't predict them or account for them. So we provide single unit pricing. So the rep has that number, and he's going to do something with that number. He's going to look at it, think about it, and he's going to say, I bet we can sell it for $160. So now there's a $10 delta from what the manufacturer told them it would cost when they place an order for it. And you're going to tell the distributor it's 160. So it's 150 coming out of the manufacturer, it's 160 to the distributor now. So there's $10 hanging out there. Well, who gets the $10? How's it divvied up?
What's the gentleman's agreement between the manufacturer and the rep? That number, that $10 is called overage. And so we're just talking about $10, right? We just talked about one single fixture that somebody wanted to buy, and there's $10 hanging out there and you go, that's not unreasonable. I mean, that's. They make dollar ten. They made sales calls. They did. They did the job they're supposed to do, which is fine, but again, it's hard to run a business just on different. Now, Avi loves downlights. He's downlight king of the universe. So he has 350 of them on this project. And they put $10 on 350 pictures. So now you've moved the number with some decimals, commas and zeros, and now it's a real number. And so the manufacturers have these deals, a side deal cut with each rep, which is to say, we will split that money that you believe the fixture is worth in your market, on the street, in your market. We're going to split that with you. You're going to give us a little bit. You're going to give us a little bit of that. You're going to keep some of it. We're going to. That's the overage split. Those deals are typically 70 30, 80 20 or 90 ten. Where that comes into play on a larger scale, and I referenced this term before as a shell game, is that when a rep is putting together a package or distributors talking to them and they have all this number, the rep, the distributor, just wants a big, fluffy number because they're going to give the contractors a big, fluffy number. They might play some games within the lines, within their line card about, you know, there's no rep that just has one down line, right, or one linear line. They have 125 lines, major market reps. So. So they might look at this situation and go like, hey, you know, if we could use down light b instead of down like a, we have a 90 ten split with that manufacturer. We have a 70 30 split, not being completely cynical and factual at the uncomfortable same time. So this is where the shell game part comes in, because they have a different overage policy with different manufacturers, and some are more favorable and some are, others are less favorable. So then they look at the set of things they have in front of them and say, okay, well, we move this down light to here. We have a 90 ten split with these people, not a 70 30 split. So now we're going to get $9 out of that $10 versus $7 out of that $10, times 350 on top of the 10% commission. So overage is not a dirty, dirty thing until it is, and it's just part of the industry. But understanding it and understanding how they manipulate that is a way for us to provide better pricing, better expectations, understand where the game is being played. If it's being played maliciously, if it's being played for a good reason, maybe a rep is trying to fight off another rep who's, who's whispering a distributor's ear, and he's got a package that he can give him. And that rep knows that you love what you expect, but he's trying to fight off a guy here. So there's a lot of different variations to that take about how it's done. So if you say to someone and you know the game and you're talking about pricing and you drop the word overage, they should know, okay, this person I'm talking to is aware of the process. We could call it the game, you call it the process, you could call it whatever word makes you feel better about it. It's enough to look at it. So that's a little insight about how that works. And the distributor gets the number, they put their mark on it, and they give it the contractor, and then they're going to put their mark on it. So when we provide budget pricing, we try to account for two markups, the distributor markup and the contractor markup. Now the price between the manufacturer and the rep is not our business. That's not our business. That's a sacred number between them two. So when the rep tells us this is a d in price, a distributor net price, that's the price. Whatever game they have going on between them and the manufacturer is not our business, nor could you ever know it without having some inside information. You wouldn't know, right.
[00:31:18] Speaker B: Right. You don't know if there's overage on that price.
[00:31:21] Speaker C: That's right. As long as we feel that the price seems reasonable with our expectations, then the overs doesn't mean anything to us at that point.
[00:31:29] Speaker B: That's their game to hit that number that we're going to think and you.
[00:31:32] Speaker C: Take your energy and you put it there and you work that stuff. We got other stuff we got to deal with. Right. So yeah, it's a little bit like that.
[00:31:39] Speaker B: So you talked about that magic moment when they come to you and say this price isn't what I thought. How much of this are you divulging to the client at that time? Have you ever explored telling them upfront, I've done this with residential, but not so much in commercial world of saying, hey, you know, in twelve months when they're about to install the lighting, they're going to tell you that I don't know what I'm talking about and that I, you know, that it's cost this other, you know, whatever. Yeah, I've made great relations like that is when I've had those clients come back to me and say, you were right, they did that. I said, yeah, I know, I believe that happened. I could tell the future.
[00:32:16] Speaker C: Oh my God.
[00:32:18] Speaker B: So, yeah. How much of this do you share with.
[00:32:21] Speaker C: Well, so, you know, we do mostly commercial work and in that sector, contractors, they know all of their own games. But every time an owner builds a building, it's typically, it's their first time they're building a building. Right. It's the GC's, you know, 100th project and it's our 400th project, but it's always the owner's first project. So you assume that they're new to it. Maybe they're not, but maybe they are and we might not have access to the owner to talk to them. We can tell our client, who does have access, which is typically the architect, what to expect. And here's what happened. And I've said that if, you know, a project is going on in a certain market, there's certain markets that are better or worser than other markets, for lack of a better term. So if I think of projects going on in market a, I might say to our client, hey, that's a really traditional package market. Maybe it's even like in my area code. This was a, when I got here was a distributor, contractor driven market, not a specification driven market, which meant distributors and contractors had their way with whatever was happening. So that's a whole different dynamic. Right? This like who controls these specifications that get out for bid? And so I do occasionally if I, if I feel like the market we're in is unhealthy in that regard, I will say something to our client. Generally budgeting comes up now.
The budgeting issues are coming up earlier and earlier and early. Yeah, I mean we're just, we're in DD and they're talking about the project being over budget. It's like I don't even have dots on paper. How is it over budget? Because we thought about it. It's over budget.
[00:34:07] Speaker A: Well, no, it's because the electrical contractor knows that's already been hired, knows there's a lighting designer and you're not going to expect the things he likes. And they want to put 40 points on the lighting fixture package. So it's over budget.
[00:34:22] Speaker C: Yeah. And electrical contractor know their markup. You know, I think the general person on strength is electrician gets paid what? They get paid an hour. And while that is true, they do get paid when they get paid an hour. They also make money by selling lights to the project. So for anybody who wouldn't know, the question occasionally gets asked, well, why doesn't the owner just buy the lights themselves? Why have that step in there? Well, electrical contractors make money from selling lights. It's part of their revenue stream. The value that they bring to that notion is when something is wrong with the order, when one nut bolt screw is not there, they handle it. If they didn't, then it would be advantageous for every owner just to buy a project directly. But then that would make them a bank and that would also make them accountable for every nut bolt and screw on the project. And then if you do take that away from, if you take that with an electrical contractor, because occasionally that happens, owners say, oh, you know, we're going to buy this directly. Electrical contractor is not so motivated to help them when something goes wrong. It's like, look, you ordered this stuff, it showed up at the dock and you're supplying it to us now to do our work. That is now the only thing we're getting paid for, they bring a little value in that they run game for the hardware and they're fronting the money for the hardware, and then they are accountable for it. So that's another reason. And occasionally we'll have a architect say, hey, you think the owner could just buy this directly? And I go, please don't do that. Don't allow that to happen, because that's a, that's an attractive notion on paper to say, I could get rid of 15 points of this $1.2 million worth of lighting. That's some commas and zeros right there, but it's like, are you equipped to deal with it 24/7 do you have the infrastructure to deal with lighting hardware?
[00:36:20] Speaker A: Yeah, I would say we actually have a lot of clients that buy the product and we. I think these are all really good points, but, you know, it takes an infrastructure at more lights to manage that for the client.
[00:36:37] Speaker C: Yeah.
[00:36:37] Speaker A: And the contractor, while, you know, 15, we have one project that contractor wants 30% on the fixture package. You know, what we typically recommend is that they get five or 7% or something like that. Because like you said, they still have a lot of responsibility that needs to be discussed. But, yeah, we've taken a little bit different approach. But you're right on that. There's a lot of work that still needs to happen, and they have a responsibility that they're.
[00:37:08] Speaker C: Yeah, if an architect comes to us, and a lot of times it's more museums that are more apt to want to buy the lighting package. General contractors and stuff, they, they know that. They're like, man, you don't want to do that. But a museum might say, hey, you know, we got a donor. And donor came up and said they'd be happy to. The donor turned on a light once, so they know a lot about lighting.
So they suggested we buy the light directly and they'll help us. And I said, okay, well, that's a noble goal. I automatically shift into now we're all going to do a lot more work, right? I'm going to have to do a lot more work. You're going to have to. So you think about, you know, you're going to be answering phone calls and not having to answer stuff, and then you're going to call our client, who's going to call me. And then everyone gets taxed a little bit in the process of you saving money. And we call that jumping over dollars to pick up nickels.
[00:38:06] Speaker B: We do a lot of that.
[00:38:08] Speaker C: Yeah, it's just like it seemed like a good idea. Yeah, it seemed like a good idea upfront, but ultimately, you didn't save. What's the value of your time? What's the value of your human time in this?
[00:38:20] Speaker B: Well, but the client wants it to be your time.
[00:38:24] Speaker C: It is.
[00:38:25] Speaker B: They're paying you a flat fee for. So it's not costing them anything.
[00:38:29] Speaker C: What they don't know is it's our time. It's all of our time.
[00:38:34] Speaker A: Yeah. I mean, the other thing, and I don't know if you guys have experienced this, I think we may experience a bit more using a lot of dolly controls, is that we have problems with manufacturers constantly, because they don't know how to program drivers, and the contractors don't understand how to explain those things back. So we end up being in the middle of it anyway, because they don't know how to explain to somebody what's not working and getting the right parts or getting the right pieces. I mean, it really depends. Right. We're speaking in generalities. It depends on the contractor, it depends on the distributor, depends on the local rep or your rep, whichever. Everyone is involved. Right. But there is a lot of time spent there amongst everybody. And I love that idea of chasing a dime to save a buck. It's not. Did I say that right?
[00:39:28] Speaker C: Jumping over dollars to pick up nickels? But it's true. When we talk about generalities, most contractors can't spell DMX. And so, you know, one costing issue is when they see that that question marks equal dollar signs. Right. So when they're doing a takeoff on a project and you've splattered DMX all over this thing, and a contractor's looking at it and they don't. DMX, sure. Yeah. We. You know, my neighbor does this Christmas tree lights in it every year, so I know something about it. No, you don't. You can't even spell it, and you're gonna butcher it, and then we're gonna get taxed to death. And the only thing that you can really do to try to mitigate that early is just have your. Have your paperwork, have your drawings, have your everything so tweaked up that when. When they come back and they're knee deep in it, and they didn't hire a lighting integrator like we recommended, because they're trying to save money. We. We wrote in our spec, you're supposed to hire a lighting integrator who can spell DMX, and they'll make your life really easy, but it's not free. Right. And you build it into the cost of the program. When they don't do that, you have your. Your paperwork really, you know, tweaked up so you can say, look, it's just follow the lines, man. Just follow the lines. For God's sakes. Follow lines. We've done it all for you. Just follow the lines.
[00:40:44] Speaker A: But we did veer off. I want to come back to that magic moment, right, where.
[00:40:49] Speaker C: Oh, yeah, yeah, yeah, yeah, yeah, yeah.
[00:40:50] Speaker A: Because I think I am a huge fan of that moment, too.
[00:40:54] Speaker C: But.
[00:40:54] Speaker A: But talk a little bit more about that magic moment.
[00:40:58] Speaker B: Lighting matters. As we wrap up up, we want to reiterate how much we value your time, and we hope you found it as much fun to listen to as we had creating it. Remember to like it, and share this content with your friends and colleagues.
[00:41:14] Speaker A: The opinions expressed are those of the participants and do not necessarily reflect the official positions of the sponsors. Our content has general application, but we recommend obtaining personalized guidance from a professional iald lighting designer such as RBLD or more lights for your next endeavor.
