Selling lights as electrician

Status
Not open for further replies.
jmellc said:
If customer buys lights elsewhere, trying to charge markup would be criminal.
Click to expand...
I disagree. If I work for $100 / hr and get mark up on materials then if the customer supplies say 30-40 fixtures then I am working for 2 days at $100/hr . I need material markup to cover my overhead. Whenever I bid a job and the customer or someone else is supplying the fixtures I try and guess what the fixture allowance would be and then add my percentage to it.
 
Dennis Alwon said:
I disagree. If I work for $100 / hr and get mark up on materials then if the customer supplies say 30-40 fixtures then I am working for 2 days at $100/hr . I need material markup to cover my overhead. Whenever I bid a job and the customer or someone else is supplying the fixtures I try and guess what the fixture allowance would be and then add my percentage to it.
Click to expand...
You have to have some kind of money in the job to cover the stuff associated with the fixtures that you're going to spend even if somebody else supplies the miserable things. Maybe just give them credit for what you would spend on the fixtures.
 
Dennis Alwon said:
I disagree. If I work for $100 / hr and get mark up on materials then if the customer supplies say 30-40 fixtures then I am working for 2 days at $100/hr . I need material markup to cover my overhead. Whenever I bid a job and the customer or someone else is supplying the fixtures I try and guess what the fixture allowance would be and then add my percentage to it.
Click to expand...
But do you line item that markup or do you hide it in other line items somehow?

I'm sure this can depend on whether you gave them an upfront cost as well. If that cost did include the fixtures exactly how you do it can sort of depend on how you included them. If they were line item amounts customer is probably expecting the final amount to be decreased by that line item amount. Also keep in mind from a costs perspective, since you didn't supply these items you should have lessened risk of needing to warranty them down the road. If you pay sales tax on your purchased items that is also lessened. You did not spend any time selecting, purchasing, shipping fees or transporting said fixtures to the job either. Any assembly labor was probably already included in your estimate/upfront pricing and still will apply.
 
Last edited:
kwired said:
But do you line item that markup or do you hide it in other line items somehow?

I'm sure this can depend on whether you gave them an upfront cost as well. If that cost did include the fixtures exactly how you do it can sort of depend on how you included them. If they were line item amounts customer is probably expecting the final amount to be decreased by that line item amount. Also keep in mind from a costs perspective, since you didn't supply these items you should have lessened risk of needing to warranty them down the road. If you pay sales tax on your purchased items that is also lessened. You did not spend any time selecting, purchasing, shipping fees or transporting said fixtures to the job either. Any assembly labor was probably already included in your estimate/upfront pricing and still will apply.
Click to expand...
I guess I am saying that if your profit on the job is significantly effected by not having a markup on the fixtures, maybe you are need to change how you sell things.

If you are working on a new house this should not even come close to whether you profit or not from the job as a whole.

If this is just an afternoon job of changing some fixtures out - you should still have made a profit whether you directly marked the fixtures up or not.
 
I would encourage the customer to supply the dock pedestals to save him some money. Then I would split what would be the markup on those units and split it with the customer (w/out disclosing it to the customer in my bid).
 
petersonra said:
You have to have some kind of money in the job to cover the stuff associated with the fixtures that you're going to spend even if somebody else supplies the miserable things. Maybe just give them credit for what you would spend on the fixtures.
Click to expand...
I don't deal with commercial jobs so we could have $10,000- $15,000 or so in lights...... that is max. We did have one job that had close to $100,000.00 in lights but that was a T&M job
 
While most of the time its really annoying to have the customer supply anything, we dont always have the man power to shop around past a supply house or two and on occasion I have had customers really surprise me with both the deals they find on lighting stuff and what they are willing to pay.
I also like to learn about new products from customers who supply them as I would never think of or know about them otherwise.
 
Dennis Alwon said:
I disagree. If I work for $100 / hr and get mark up on materials then if the customer supplies say 30-40 fixtures then I am working for 2 days at $100/hr . I need material markup to cover my overhead. Whenever I bid a job and the customer or someone else is supplying the fixtures I try and guess what the fixture allowance would be and then add my percentage to it.
Click to expand...
Customer buys lights & has them ready when you get there. You charge for your labor & any material you provide. Simple as that.
 
electrofelon said:
That seems a bit sleazy to me honestly. Personally, if I don't have to spec/source/purchase/pickup/warranty them, I'm fine letting customer pay, in fact that is my preference.
Click to expand...
Unless you are working time and material, the concept that it is "sleazy" offends me.
 
But like Dennis said, your total income per hour on a t&m/ or bid has your markup on material in your amount you want to earn for that job. If you no longer can account for the material than either your labor amount for that job should increase, or still charge some amount for materials, since you still have to unpack and clean up owners purchased materials.

I should not saying anything on this subject though. I would probably not charge either since, I feel sorry for people to much, but in practice I understand what he is getting at, I think?
 
electrofelon said:
That seems a bit sleazy to me honestly. Personally, if I don't have to spec/source/purchase/pickup/warranty them, I'm fine letting customer pay, in fact that is my preference.
Click to expand...
I wouldn't call it sleazy, I would simply quote my price knowing that I will have neither the benefits of mark-up nor the headaches of providing. I am also happy to install customer-supplied fixtures.
 
Dennis Alwon said:
I need material markup to cover my overhead.
Click to expand...
That should be part of your labor charges, not your material charges.

I think that labor includes dealing with customer-supplied materials.

Mark-up covers buying time and travel, and warranty/return issues.
 
When customers call me to change out a fixture that they have, I charge my hourly rate from the time I get there to the time I leave plus 1 hour for drive time and etc….. including any time I have to run to town to get materials to make the stuff they bought work. I give them a ballpark price on the phone but tell them it T&M.
If customer tells me to buy fixtures I do mark that up ( I have to order, store, and usually take care of trash, and all that takes time you usually can not charge your hourly rate for) but it’s still T&M


Sent from my iPhone using Tapatalk
 
LarryFine said:
That should be part of your labor charges, not your material charges.

I think that labor includes dealing with customer-supplied materials.

Mark-up covers buying time and travel, and warranty/return issues.
Click to expand...

My markup has always been my go to for overhead. Wherever you add it it needs to be there. So, instead of charging $200 I charge $1200 to cover the markup on materials. What's the difference, either way the markup is paying for something.

Remember who they call when there is a problem... you charge them and then you get a bad reputation.... It worked fine and I was clear to them about it.
 
If you use the dual overhead recovery method, then losing material sales can be impactful.

The most accurate method of overhead recovery is the dual overhead rate method. This method utilizes two different overhead rates — one for subcontractors and materials and one for direct labor
Click to expand...

 
jmellc said:
Customer buys lights & has them ready when you get there. You charge for your labor & any material you provide. Simple as that.
Click to expand...
Yes. I don't believe overhead, which is a fixed expense, should be re-couped from materials sales. My markup on materials is a charge for me supplying them. A consultant charges for their labor and their overhead expenses are included within that labor amount. Keep it simple as you say. Nothing wrong with a customer supplying light fixtures. They usually forget the bulbs though.:rolleyes:
 
But with the logic that you should always be supplying lighting fixtures, shouldn't that logic apply to all the electrically operated appliances as well? Or on some commercial industrial you should be supplying specialty electrical appliances, conveyors, lathes, CNC machines, processing and packaging machines......? If you do that, when there is problems or they don't do what customer wanted them to do or as well as they hoped, now it is at least partially your problem. If all you did was supply power to it you don't need to be an expert on everything else about it or provide any kind of warranty on it.
 
Status
Not open for further replies.
Top