Matierial mark up and Hourly rate?

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Big Chris

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On residential time and matierial work for existing as well as new customers I charge a 20% mark up on matierials. I prefer to give a bid price for the work but T + M work is what regular customers prefer. I dont really mind it as it can provide a safety net for an underbid project. Also I am billing $75 per hour for Myself and $120 per hour for Myself and a helper. Just wondering if I am in the right ballpark? Any comments are welcome. This work is in MA. Thanks, Chris
 
Chris,

Welcome to the forum. You are right on. I charge the same 20% and $75 but charge $125 for licensed man with apprentice. I'm also in MA - Milford. What town are you from?
 
I live in Revere and most of my work is local. Repeat customers, with a couple of contractors and property mg companies mixed in. I just slowly increased my pricing over the years, but was not sure if I was high or low at my current rate.
 
Again, your rates are in line with everyone I know. Hang on to those repeat customers, a lot of guys are real slow now.
 
My rates are the same. I'm in Mass also. The following question applies no matter where you work: How do you charge for getting materials? I try to get materilas before or after normal work hours and don't charge for that (except the 20% markup) but sometimes you have to go to the supply house or hardware store during the work day. Some times it's something I should not have run out of and sometimes it's not. How do you charge for those shopping trips?
 
I think a flat 20% markup isn't being fair to yourself. I'm not sure where the magic *20%* number came from, but lots of people seem to use it. I use a sliding scale to get my markup multiplier for each item:

$0.00 to $0.49 x 6
$0.50 to $0.99 x 5.75
$1.00 to $1.49 x 5.5
$1.50 to $1.99 x 5.25
$2.00 to $2.49 x 5
$2.50 to $2.99 x 4.75
$3.00 to $3.99 x 4.5
$4.00 to $4.99 x 4.375
$5.00 to $5.99 x 4.25
$6.00 to $6.99 x 4.125
$7.00 to $7.99 x 4
$8.00 to $8.99 x 3.75
$9.00 to $9.99 x 3.625
$10.00 to $19.99 x 3.5
$20.00 to $29.99 x 3.375
$30.00 to $39.99 x 3.25
$40.00 to $49.99 x 3.125
$50.00 to $59.99 x 3
$60.00 to $69.99 x 2.75
$70.00 to $79.99 x 2.625
$80.00 to $89.99 x 2.5
$90.00 to $99.99 x 2.333
$100.00 to $139.99 x 2.25
$140.00 to $169.99 x 2.166
$170.00 to $199.99 x 2
$200.00 to $239.99 x 1.855
$240.00 to $269.99 x 1.823
$270.00 to $299.99 x 1.789
$300.00 to $349.99 x 1.75
$350.00 to $399.99 x 1.725
$400.00 to $499.99 x 1.6875
$500.00 to $749.99 x 1.6
$750.00 to $999.99 x 1.55
$1,000.00 to $1,499.99 x 1.5
$1,500.00 to $1,999.99 x 1.45
$2,000.00 to $2,999.99 x 1.4
$3,000.00 to $4,999.99 x 1.35
$5,000.00 to $9,999.99 x 1.3375
$10,000.00 to $24,999.99 x 1.3333
$25,000.00 to $49,999.99 x 1.33
$50,000.00 to $99,999.99 x 1.3

You absolutely need to charge for running after things. That's not a free service. If you ran out of something every electrician ought to have (wire, recs, whatever), then you need to give yourself a time out then charge for it anyhow.
 
Marc, Your mark-up is very attractive. I'd be happy to just get 30% which is your lowest rate. How do you choose the cost amout to apply the percent to? Is it a per individual item, per days worth of material, week, month or per billing cycle?
 
mkgrady said:
Is it a per individual item, per days worth of material, week, month or per billing cycle?
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I use that chart for service work, and not for bidding. It is "per item". If you supply a receptacle that costs you 48 cents at the supply house, you multiply that by 6 to get your selling price of $2.88. If you supply a motor starter that costs you $438.44, then you multiply that by 1.6875 to get your selling price of $739.87.

The only exception I use that is not "per item" is for wire. I apply the markup on the total installed amount of each type of wire or cable. For instance, if you used 3' of Cat5e to make a patch cable, your cost might be 18 cents, and it would sell for 1.08. If you used 75 feet for a new jack, your cost might be $4.50, and it would sell for $19.69.

I use a modified version of that sliding scale chart for bidding work, but it's based on assembly costs and not "per item".

I'm not trying to say anyone else needs to markup this way, but I was only offering how I do things.
 
Marc ,Your multiplier is very interesting and something I had been thinking of on bid work also.When I bid new work I give a unit cost " $ " per recepticle , switch , etc. so the customer can add or subtract as they want or need and the price is already known. What I was thinking was a multipier for jobs with cieling hieghts over 8' or a square ft. multiplier for houses over 2300 ft. Any input?
 
acrwc10 said:
What I was thinking was a multipier for jobs with cieling hieghts over 8' or a square ft. multiplier for houses over 2300 ft. Any input?
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Yeah, that has existed for a long time. Most "flat rate books" available for purchse include such adders, as well as "National Electrical Estimator".

Probably not a good idea to start out posts with some specific person's name, as you did to me. That keeps others from offering their opinions also. I'm just a regular electrician and not some business guru.
 
hardworkingstiff said:
I find it pretty amazing that you can take a material cost of $50,000 and sell it for 1.3 x $50,000.
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In truth, nothing that expensive has been sold off any service truck of mine. Maybe we've run after a pretty expensive transformer or maybe a larger framed breaker that might cost 10K, but nothing approaching 50K.
 
50,000 *1.3 = $65,000.

Think of the logistics and coordination required to get together $50,000 worth of material. I don't think too many contractors will ever sell 1 -$50,000 piece of anything, so more than likely, it will be a combination of items that equal $50,000.

What is wrong with making money (and better yet, Profit) for your time and energy to put together a $50,000 order?
 
emahler said:
I don't think too many contractors will ever sell 1 -$50,000 piece of anything, so more than likely, it will be a combination of items that equal $50,000.
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I use that chart to price each item. I don't see myself doing a service call and needing a single item that costs 50 grand. You never know, though. If a customer has a unit substation blow up, I might need to send someone on a drive to pick one up someplace. I keep business cards and advertisements for places from many states around that keep that hard-to-get stuff in stock for emergency repairs. The catalog price on a square d 2500 amp P frame breaker is around $26,000. I did have a customer needed one of them in a hurry, because they turned one off to de-energize something for repair, and it wouldn't turn back on. Something broke inside it. I don't pay 26K for that breaker, but that's just an example of something expensive that you might need in a hurry. (The customer later had that breaker rebuilt to keep on-hand for a spare).
 
i understand that. I think the most expensive typical item we might use on a service call is about $400-$500, and that would be a 3ph 480V large frame breaker.

Anything larger than that, and we a) wouldn't have it in stock, and b) install it without giving the customer a price first.

But my post was in response to thinking that 1.3 as a multiplier of $50k was alot. We just undervalue ourselves and what we do entirely too often. That was the point.
 
emahler said:
We just undervalue ourselves and what we do entirely too often. That was the point.
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Right! Thank you for that.

This was my point in posting that multiplier list. I hoped people wouldn't get too wrapped up in the exact numbers. Electricians are lagging behind the plumbers and HVAC guys when it comes to markup and profit, and how to run profitable service calls. I read all the plumbing and HVAC stuff on these topics I can get my hands on, because it simply doesn't exist in a quality form for electricians. Sooner or later, some person needs to rise to the top to take charge of marketing for electricians, in much the same way Mike Holt has done for grounding and bonding and Joe Tedesco has done for safety. If someone knows who that up and come-er is, please share.
 
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Not sure, but I follow the plumbing guys (Frank Blau, Maurice Maio, Ellen Rohr (ok, she's a girl) et al.)

they are years ahead of us.
 
emahler said:
Not sure, but I follow the plumbing guys (Frank Blau, Maurice Maio, Ellen Rohr (ok, she's a girl) et al.)

they are years ahead of us.
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Very true. They are some of my favorites also.

What the heck's wrong with electricians in this regard? We can discuss code to the sub-atomic level, but don't discuss profit and sound business practices? I don't mean this just this site.... it's an industry wide problem in our trade. And, I do mean problem. I owe it to myself to get this education, and I can only get it from the plumbing and HVAC people at the moment.
 
good tradesmen don't always make good businessmen. Read any electrical forum, guys are too proud of their technical knowledge and make fun of the "business guys"

I know my code well enough to get me through any job we do. I can find the answer to any question I have. There are plenty of guys in the world who know the code better than me, but what good does it do them? Do they make more money because they can recite the code and I have to look it up?

But what about business principals? There is no one book to read. No one place to get the right answers. So, IMO, too many guys just don't want to be bothered.
 
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