I often see discussions on here about labor rates, but don't remember any about charging for material. Curious what methods others are using to calculate markup.
Are you referring to supplies or items specifically purchased for a project? I am assuming it's for the latter. If so you deserve to make something on the time it takes to purchase the products and it also takes your money in some form or another to pay for the products. I believe your goal is to make this revenue neutral resulting neither in an expense nor profit.
Distributors mark up their products at least 10% if they merely pass it through where there is a direct shipment and no handling involved. The distributors that I'm familiar with like to see at least a 20-25% markup overall. However stocking and supplying products is their business. But they depend upon inventory turns while your concern is to be paid for your inconvenience and what it costs you to make the purchase. Product sitting on their shelves doesn?t make money until it is sold.
I doubt if you are in the business to make money necessarily from material. I would imagine that you would rather have the work and not loose money purchasing the material.
I'm talking about the material that gets installed.
I'm talking about the material that gets installed.
...
Personally I would rather not have to supply material but it is a necessary evil. My goal is the work and not the purchase resale of supplies.
Personally I would rather not have to supply material but it is a necessary evil.
My goal is the work and not the purchase resale of supplies.
Personally I would rather not have to supply material but it is a necessary evil.
Wow. Really?
On commercial construction jobs, the more and high dollar materials I get to purchase, the better.
The markup on materials is what protects my risk on labor.
On service, I markup materials 30-50%
How do you expect to grow a company selling labor?
Throwing around numbers and how much material should be marked up is largeley dependent upon what you can get away with in your market area. I will be the first to admit that my suggestion does not consider what your market can bare or your business plan. It's all about getting orders while stayin profitable.Wow. Really?
On commercial construction jobs, the more and high dollar materials I get to purchase, the better.
The markup on materials is what protects my risk on labor.
On service, I markup materials 30-50%
How do you expect to grow a company selling labor?
Marking up common dwelling related items generally doesn't result in a lot of profit even at 100% unless you mark a lot of it up every year. Start marking up industrial controls, industrial panels, MCC's, and other similar items even at 25% starts to become a big profit much quicker.
The best way to run your business if you are an electrician, is let every else mark up material and make money, it should be your goal to work as cheap as you can, and never try to do anything crazy like make a profit on material and equipment sales
Must be we have a large number of guys on this site are not in business trying to support a family.
If I decided right now not to mark up another item sold, my labor rates would definately need to to be increased.
I also feel what I sell an item to a customer for is my sale price and they have no business knowing what my cost was. I feel same about any product I purchase from someone else. If I don't like the price I can try to get it somewhere else. If my customer doesn't like my price they can get it somewhere else. My price also comes with installation, may or may not be included in an item price, but if I get no profit from material mark up - then installation cost has to go up if I want to have same net profit. With a contract even if materials are itemized - so what - the bottom line should be the total of the contract and not get hung on a specific item or two - maybe that one item they think they are getting hosed on is offset by another item they are getting a steal on.
Marking up common dwelling related items generally doesn't result in a lot of profit even at 100% unless you mark a lot of it up every year. Start marking up industrial controls, industrial panels, MCC's, and other similar items even at 25% starts to become a big profit much quicker.
How many retail places do you see that have occasional liquidation sales to get rid of seasonal or other discontinued product lines and offer it at 75% discount prices. You think they are taking a loss on that product? Maybe sometimes they are taking a loss but they either made a big profit when it was in season and want to get rid of it because it is taking too much space or it just doesn't sell and they still want to get rid of it so they can sell something more profitable. They were likely selling at at least 50% mark up before the items were reduced for liquidation. There is of course some items sold for little or even no profit as a way to get customers in the door in hopes of selling some other higher profit items while they are there, I think Wal Mart does a lot of that.