Rational parts markup?

[zbang]

I've seen anywhere from 15% to maybe 50%, depending on the item, handling, and quantity. The lower end if I place the order and it gets drop-shipped to the client, higher if I have to hit the inconvenient supply house. Are those numbers rational?

This comes up because a vendor wants to charge me about 20% to replace an ansul-type tank (OK), but 500% for the gas cartridge (not OK). (Based on what commercial pricing I can find online for identical parts.) They also charge labor, of course. (The why replace it is another discussion.)

 

[NoahsArc]

For service:

20-40% is reasonable in my mind, depends on a lot.
0% is just expert perfection I guess.
40% is confusing yourself about where your money is coming from, unless it's T&M, then you're confusing the client.

Many ascribe to the markup being inversely proportional to the price of the part, so a $1 part gets 300% markup and a $100 part gets 20% or something like that.
That's far too much mathing for a basic service call for me at least, I'll just average it out and run with what seems to work for me and covers:

1. wastage (excess wire/pipe cutoffs)
2. small items (nuts and bolts I'm not itemizing)
3. tooling (bits and % tool budget)
4. warranty (debatable that this should be in materials as it's paid for by pure labor)
5. errors and omissions on estimate (debatable if it shouldn't be a combined line item)

 

[brantmacga]

For service I always used a flat 40% markup on everything.

As for your situation and what they’re charging for markup, you just have to consider if what they’re providing you has value to you at the price offered. If not, shop around. Is it worth your time and effort to source all the components on your own, or pay what they’re asking to get the job done to your satisfaction?

 

[zbang]

Flat markup is quick and easy, and unless there's almost no work on my part (like place order, drop ship to client), 30-40% seems reasonable; I tend to stay in that range. Good to know I'm being reasonable, or as reasonable as necessary.

As for the present issue, I'm about 2 inches away from calling a couple of other fire-pro companies for estimates. The current problems come up as the tech on-site has told me one thing which makes sense, and the office tells me something with a higher cost. That and the 700% ($166) markup on a $20 part while they're still charging a lot for labor. (Any more griping about it will go in Campfire Chat.)

 

[letgomywago]

So sometimes we need to take an objective look
Big box short chunk of wire is 500% mark up.
Conduit fittings 300%
No home owner complains about this. You need to remember that sometimes convenience is at a cost and in the end the price is the price and that final number is what needs to be shopped.

Ever look into what a supplier will charge you to replace a loadcenter cover?

 

[zbang]

This isn't about convenience, it's a bid to replace an Ansul tank by a licensed service co. Sure, $575 labor for a couple of hours, no (not much) gripe with that, but the extra $140 on top of that (cartridge) is kind of insulting (if it were $50 I wouldn't have even checked).

If the vendor is going to break out the costs, they need make them each reasonable and defensible; another reason for a single price or all-parts and all-labor.

 

[letgomywago]

It might cost them that much to have someone procure and provide it. Or it could be they are raising prices on things that they won't allow the customer to provide.
If it's a bid that's all that matters unless you're planning on changing something mid project

 

[NoahsArc]

The end number is the end number, don't even bother looking at the cost breakdown, are they a reasonable bid or not.
Good lesson: don't breakdown quotes unless contractually obligated.

 

[gadfly56]

This isn't about convenience, it's a bid to replace an Ansul tank by a licensed service co. Sure, $575 labor for a couple of hours, no (not much) gripe with that, but the extra $140 on top of that (cartridge) is kind of insulting (if it were $50 I wouldn't have even checked).

If the vendor is going to break out the costs, they need make them each reasonable and defensible; another reason for a single price or all-parts and all-labor.

What's the model number for the cartridge? If it's the LT10-R, and you were a standard dealer (not the end user), we'd charge you $140.09. If you walk in off the street and Tom likes your face, you might get the discounted price of $196.12.

 

[zbang]

Good lesson: don't breakdown quotes unless contractually obligated.

Well yes, but they did and I'm a curious guy .

What's the model number for the cartridge?

The tech manual says 551059; I was a bit loose with wording, it's not an Ansul(tm) system, it's a Pyrochem Kitchen Knight. Needs one cart. for up to five tanks (we have one).

"PYRO CHEM 16gm CO2 Actuator cartridge"

Pyro-Chem 551059 16 Gram Carbon Dioxide Actuation Cartridge

Pyro-Chem 551059 16 Gram Carbon Dioxide Actuation Cartridge

www.firesafetysupply.net

Pyro-Chem Monarch/Kitchen Knight II 16 Gram Carbon Dioxide Actuation Cartridge - Package of 6

16 Gram Carbon Dioxide Actuation Cartridge - Package of 6

www.herbertwilliams.com

(under $25/cart; I'm only looking at fire suppression companies, not ebay/amazon/etc)

Makes be wonder if they're using Ansul(tm) pricing for the Pyrochem system. Also a bit shady in my book.

(I am definitely not doing any work on this myself.)

 

[JoeNorm]

For service I always used a flat 40% markup on everything.

As for your situation and what they’re charging for markup, you just have to consider if what they’re providing you has value to you at the price offered. If not, shop around. Is it worth your time and effort to source all the components on your own, or pay what they’re asking to get the job done to your satisfaction?

How do we define "service" and differentiate it from other work?

 

[petersonra]

There is no such thing as rational. If you want to you could raise your labor rate and not charge for parts at all. That is effectively what a lot of service providers do these days.

Do what works for you

 

[gadfly56]

Well yes, but they did and I'm a curious guy .


The tech manual says 551059; I was a bit loose with wording, it's not an Ansul(tm) system, it's a Pyrochem Kitchen Knight. Needs one cart. for up to five tanks (we have one).

"PYRO CHEM 16gm CO2 Actuator cartridge"

Pyro-Chem 551059 16 Gram Carbon Dioxide Actuation Cartridge

Pyro-Chem 551059 16 Gram Carbon Dioxide Actuation Cartridge

www.firesafetysupply.net

Pyro-Chem Monarch/Kitchen Knight II 16 Gram Carbon Dioxide Actuation Cartridge - Package of 6

16 Gram Carbon Dioxide Actuation Cartridge - Package of 6

www.herbertwilliams.com

(under $25/cart; I'm only looking at fire suppression companies, not ebay/amazon/etc)

Makes be wonder if they're using Ansul(tm) pricing for the Pyrochem system. Also a bit shady in my book.

(I am definitely not doing any work on this myself.)

Our walk-in-off-the-street price to you is $28.90. If you do a lot of business with us, you can get a much better price. I'm not sure how the general prices in northern Illinois compare to the NYC metro area.