Parts mark up

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stevekerr

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Is there a set rule for markup on parts? My husband has asked me to come up with an estimate on a job for him. He does residential service work and has been asked to give an estimate on a home theater. He has in the past been billing for labor and just passing his price of parts on to his customer. I keep thinking he should be pricing more ... can someone give me an idea?

Thanks!
 
Re: Parts mark up

I will tell you this I would starve selling just labor. Material is what keeps the bills paid, espically as you put on additional employees.

Small stuff 25-40 percent

Larger items 10-25 percent

Plus any applicable sales tax

A friend of mine sold a large generator when he first started and only marked it uo 10% forgot tak and rigger, ended up at cost.
 
Re: Parts mark up

On service calls i see nothing wrong with 100% on items that are $10 or less.Yes they could buy them cheaper at the big orange store but you are not in compitition with them.You keep these items on your truck not knowing when or if you will ever sell them.On items that are over $10 i think between 10% and 25% is reasonable.
Call home depot and ask the price of a single pole switch,probly 50 cents.Now ask how much to deliver it to your door.In the late 60's i did T V
repairs the parts often cost 10 cents and we charged $4.95

[ December 22, 2003, 06:08 PM: Message edited by: jimwalker ]
 
Re: Parts mark up

two months goes by and the home theater blows a speaker----who's the customer gonna call--not the manufacturer-not the supplier- yes the installer-you! and your gonna have to call your husband! and he goes over and finds the speaker "is dead". customer doesn't care -"fix it i paid you for an operational system- make it operate!" he brings the speaker back to the supplier-who says "what caused it?" who knows? "well i'll send it back to the manufacturer and see what they say" - three months later- after many arguments and phone calls from your customer (who will never use you again) your husband threatens the supplier enough that he gives him another speaker---he runs over and installs it for your (x) customer.
now who pays for all that time-travel-and agrivation????????? thats why there is major mark ups on that type of equipment. more stable materials may have a lower markup rate...
 
Re: Parts mark up

When i first started my then partner taught me why we always try to get the GC or homeowner to supply fixtures. doorchime,smokes.
This saved us from being the ones returning broken and defective items and replacing that chime that went bad 9 months later.Since it wasn't ours we could justify charging labor to replace.
More recent, a company i worked for supplied the outdoor ceiling fans on a country club screened in outside eating area.The FL heat proved to be too hard on the plastic blades.As they gradually bent they got out of balance.Now the fun begins.Trip #1 i run the service call and find 2 out of 4 are wabbling badly.Attempt to balance but they won't.Take blade off of worst fan ,as it is easy to see it was bent.Trip #2 return with what was supposed to be replacment blades.Find that the fit any fan blades wont fit this fan.Trip #3 return with 4 new fans same brand and almost same model number but enough differance that they won,t match the good 2.Thinking exchange blades,but that doesn't work as they changed them enough that they wont work.Now remove old fans and install new.The total hours now involved with travel is about 12 plus the time spent going to the big orange.How nice of the mfg.to replace the fan no charge.Labor not part of warranty.We had to eat the labor.
Point is if we supply we must have a markup to cover our butt.
 
Re: Parts mark up

special items that require common sense and care to maintain operational require large mark ups not only to cover the replacement but also at least the labor "cost".. pipe - wire- fittings- junction boxes - wire - no problem. fixtures - drives - audio systems - management systems - security systems - stuff like that need high mark ups. i am in the middle of war with an insurance represenative who thinks my 12 per cent mark up on switchgear is abnormally high? i've got to back that stuff up and if something fails - the manufacturer will probibly ???? give me the parts but you don't think they are gonna pay the labor.
 
Re: Parts mark up

When a 50 cent switch goes bad , it will cost you a man for an hour and maybe a bit more. when you figure in travel time.Really helps a lot that they replace the switch free.Without markup your gonna get hurt.A one man shop might be able to eat this but when your paying a journeyman it becomes very real.Even in Tampa with low wages we must charge at least $45 an hour for that man.
 
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