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Hourly Rate vs. Flat Rate

By Jerry.z.
Small World Moving

One would assume that flat rates always win because you know exactly how much you will pay, no surprises, etc. But that’s not the company in moving. You see, moving companies have succeeded in making something so simple to be so complicated. Is a flat rate price bad? No, there are legitimate flat rate companies out there that make the moving process easier, take for example the legendary Flat Rate of NYC – they actually give their customers a real flat rate price and it is the final price, no less no more. Albeit, it’s a very expensive price but rightly so, it has to be. A flat rate price needs to account for every possible scenario that may affect the time it takes to complete a move. Some customer are willing to pay more so that they don’t have to deal with a hassle, but they need to understand that a real flat rate price will always be more expensive than an hourly rate estimate because it’s just an estimate. As mentioned earlier, moving companies have found a way to make it complicated what with hidden charges and complicated contracts. They have found a way to give a cheap flat rate price and then tack on added fees for all sorts of things. In this case, an hourly rate company would be better to go with. Hourly rate estimates will typically account for things such as number of workers, fuel, materials needed, tolls, etc. Take for example a short 2-hour move quoted a $225 by an hourly rate company. After paying workers and fuel, the company is left with approximately $120 and after paying taxes, only $85. With a flat rate company, assuming they gave a lower price than the hourly rate company, they will most likely be losing money based on these factors. If for any reason the move takes longer, due to traffic or the elevator not being reserved, the company will not make any profit and will soon be out of business. So how do these flat rate companies do it? The answer is pretty simple but tricky: 1) Hire day laborers and cheap labor 2) Only accept payment in cash, avoid paying taxes 3) Rush through the job without paying attention to details 4) Hidden charges 5) Complicated contract Regarding #5, the company may offer to move your 1-bedroom apartment for $120, but they will give you a limited list of items that can be moved at that price, no exceptions. Any additional items will cost you more. Also things like long carry walks, stairs, elevator usage, tolls, etc will cost you extra and in the end you will wind up paying the same if not more than the hourly rate company. So in conclusion, is a flat rate company better than an hourly rate company? The answer is, do your research. The most important advice is to check out the company’s rating with the Better Business Bureau. There are good and bad companies of both types. For example, if you get a few quotes from both flat rate and hourly rate companies, and you find that the flat rate quotes are cheaper, it’s best to skip it, the price will most likely go up. As a rule of thumb: a flat rate price should be higher than an hourly rate estimate.

My blog

I have created my blog for two reasons, the first reason is to give you the information to make an educated Decision when choosing your moving company, the second one is to even the ground for our company, we never low ball and our prices are real, you should compare apples to apples