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Thread: Marking up material.....

  1. #11
    Join Date
    Nov 2007
    Location
    Lancaster, Pennsylvania
    Posts
    1,697
    Quote Originally Posted by cowboyjwc View Post
    Also factor where you're getting your material. If you're buying it from the big box stores it's kind of hard to mark something up 25% that the customer can go buy themselfs cheaper. I'm not saying that you shouldn't charge for your time and expense of going and getting the material, which is really all that you are doing.
    It's tempting to fall prey to that argument, but it's invalid. If the customer wants to buy it cheaper, let them, but then it has to be clear there's no warranty on anything but labor and you need to be on the clock while making up the material list for the cheapskate. This kind of approach taken to the extreme makes work impossible, since buying cheaper could involve purchasing from multiple retailers, online and brick and mortar. Once the customer starts doing that, your labor time will increase with multiple visits, preparing lists of materials, etc.

    Aside from being partly the fault of box stores for making so many materials available to Joe Cheapskate at bulk prices, many suppliers are also contributing to the problem by giving people off the street the same prices on some items as contractors pay. I ran into this on a bid for a job involving a 6 meter bank and other large service gear where suppliers didn't even have street pricing calculated in their system and my customer had an account at that supply house (a property management company, not a contractor). There was no way for me to mark up without losing the sale.
    Peter A.

  2. #12
    Join Date
    Jun 2003
    Location
    NE (9.1 miles @5.07 Degrees from Winged Horses)
    Posts
    5,889
    Rarely do I have a customer that says they can buy something for less. I am sure they can. Most of them could actually do the work we do for them. They choose not to and when that choice is made, they understand it will cost. That said, I have suggested they can purchase items at "Brand Z", especially when I do not want the hassle of warranty on the items. Low end motion control lighting being #1.
    Tom
    TBLO

  3. #13
    Join Date
    Dec 2010
    Posts
    143
    I mark up the job not materials, labor includes all taxes etc.
    I know the time frame it takes for the job and how much i need for overhead and profit.

    Marking up a $.30 cent part 300% just creates more calculation time and paperwork.
    and adds virtually nothing to the bottom line in reality. (unless you are sell 1000 of them.) Now i am residential and light commercial. so that may make a difference. When i was industrial we placed a mark up on labor and materials but it was based as all jobs are overhead and profit. and a bid situation.The overall mark up works better in my opinion and works out the same.

  4. #14
    Join Date
    Aug 2004
    Posts
    11,535
    Quote Originally Posted by Daja7 View Post
    I mark up the job not materials, labor includes all taxes etc.
    I know the time frame it takes for the job and how much i need for overhead and profit.

    Marking up a $.30 cent part 300% just creates more calculation time and paperwork.
    and adds virtually nothing to the bottom line in reality. (unless you are sell 1000 of them.) Now i am residential and light commercial. so that may make a difference. When i was industrial we placed a mark up on labor and materials but it was based as all jobs are overhead and profit. and a bid situation.The overall mark up works better in my opinion and works out the same.
    I agree. add up the cost of the job and tack on some overhead and profit. it really is not that hard.
    Bob

  5. #15
    Join Date
    Aug 2010
    Location
    Ma
    Posts
    1,884
    Quote Originally Posted by cadpoint View Post
    #9 post in this thread Contractorstalk

    This has been posted servaral times in various places, hope this helps!
    Thanks,that's a great list..

  6. #16
    Join Date
    Sep 2008
    Location
    24941
    Posts
    105
    another strategy is learning what your customer can depreciate across time in taxation.

    my estimate on a project may look like a 40/60 split mat & Lab but,, i generally layout jobs in three catagories...
    Labor
    Materials
    Equipment

    in some cases customers will desire to shift numbers around to get the labor number lower, and better yet, get the equipment number higher.

    makes for a very odd looking estimate,,
    direct quote from a certified appliance repair tech dispatched to my house to repair my under warrenty water tank.
    "I dont know how many of them ohms your talking about is on a heating element, I just set my old meter to rx1 and if the needle pegs out then I know its good":rolleyes:

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