Bidding

EDT

Hello, first time here

I am starting a sole owner trim business. Been in the trade for 15 years and can do production aswell as high end residencial/commercial trim and cabinets.

My question is about bidding. I know how to bid trim labor and make money but i dont understand materials. Do I have to include materials in my bid? If so, what are the steps? Do I front the money from the supplier and deliver myself, then charge the costomer when the job is done?
I dont see the profit envolved in supplying materials. Lets say I had a trim package of 2k dollars. If I bought the materials I am responsible for dammage or shortages on the job which means trips to the supplier = money lost. If I sell the material to the owner at +10% of the suppliers cost I still would only make 200 dollars for the leg work and have the headaches of shortages and dammage. Im wondering if it is standard for a sub to supply materials or not? If so, can someone provide some profit advice?
I know how to obtain a buy and sell license but is $200 - $400 dollars profit per job worth the tax documentations and the above mentioned resposibilities?
Just curious and glad to have found this site

King of Crown

Howdy. I think it would help if we knew were you were. I have done it both ways, supplied materials, and just installed. Personally, i like to supply the package. My reasons are that the GCs down here dont know or understand doors that well. They order a bunch of random door knobs, and dont see if they match the door. They rely to heavily on the door company itself, and dont double check to see if the correct doors were sent to the site. This of course eats up the install time, especially when you are waiting on a new door to be delivered. The contractor will save money if he orders the doors, and everything comes correctly, but if I do it for them, Charge for it, but it is an easy sale, because most Contractors have been through the door ordering process before, and have ordered and wasted alot of time.

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Real nice guys

EDT

Im from california valley. Ive had problems with material even working as an employee where my own company provided materials. Trim has the most parts and peices of any trade by far. Id really like to just weed out the materials on a bid and bid labor only.. unless someone can convince me of the advatages??
I do howevere agree with you on being able to get what you want and not relying on the general to get the order right, but i would have to get paid for that time and i dont see the profit envolved in that.
How do you calculate a profit when you bid materials? percentage of sales added to your bid cost? Or re-sale materials at a higher cost?

JustaFramer

Markup on the materials easy math.

EDT

Well Ive been bidding small handi-man carpentry stuff trying to build a clientel (-- spelled wrong. Im trying to get my name out there to builders so that I can bid on trim projects over the 500 dollar mark and make some money. Ive done some research on bidding materials and found a program that is called national estimator. I beleive i found its link on this site but seems to be something i need if i were to a bid of materials on a job.
I still like the idea of bidding only labor but it seems almost required to bid and supply material. So, help me to understand something if you all could..
(1) Ask for a price of materials from a supplier
(2) Submit my bid with labor and materials to the GC
(3) If its accepted, open an account with the supplier and order materials and have them bill me?
(4) or.. Order materials and have them bill the GC?

and.. if I go with a re-sale license, how do I hide the bill from the supplier to the GC if he is billed directly?

Any input would be appreciated, material.. bleh..

Bob Kovacs

I don't see what the big deal is here- you price the materials, add a markup on the material, and add it to your bid. When you get the job, you buy the material and install it- end of story. Why would you have the supplier bill the GC if you include the material in your price? Why are we talking about "hiding invoices"?

On larger projects, typically sales tax is charged on material only (as the projects are "capital improvements").. Therefore, you pay the sales tax when you buy the material from the supplier, and you just pass that cost along as part of your invoice- no need to collect anymore tax or have a resale license.

To simplify it:

- Labor cost (with overhead and burden): $400
- Material cost: $470
- Sales tax on material (paid when bought): $ 30

Total so far: $900

Add for profit (say 10% gross): $100

Bid Price: $1,000

So what's so hard about that?

And forget using "National Estimator" to figure material prices- you need to get firm quotes from suppliers for all of your materials. IF the numbers in NE are even a few % off, you quickly start eating into your profits.

Bob

Glasshousebltr

I know you fellas are going to love this advice.

EDT, check out the Home Depot website, At the bottom of the home page is a link labeled 'just for contractors'. Sign up and you can surf threw and save material lists and totals. Works good for running estimates. However, keep in mind, HD's prices are a bit low.

A long the lines of hiding invoices, you bid a figure, you get a figure, what you make is nobodies business but your own. That's just the nature of the beast. If somebody wants to take your profit, tell them "sure! as long as your willing to take my losses as well!" If they want your money, make them give you security!

Bob

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Bob

EDT

Ok, thanks.. working as an employee you dont know these things.. Where do i work is about all i needed to know. So the GC only receives a bill from me, not directly from the supplier? ok good to know. I guess i have to start small and build equity to be able to afford the cost of materials up front. 1k is not bad but a material package of 15-20k is a different story. Some invoices ive seen on jobs as a employee on multi-family projects were upwards of 90k for materials. i.e. hardware, hollow metal frames. and I know my employer couldnt afford that untill he received a draw from a job. I guess working with a supplier for awhile allows you to pay in incremints on larger jobs?
Your right about the national estimator, its not perfect but it does break down a rough idea of cost for a beginner.
thanks

clampman

EDT,

If you are bidding small jobs, the GC will probably want you to provide the materials because his markup on materials will not be worth the aggravation.

If you progress to the point where the standing and running trim package is going to cost tens of thousands, then he is most likely going to want to provide it, since he will make money on it.

That is where the problems come into play. He will be going for cheapest, and won't care about consistent millwork, moisture content lengths of sticks, chatter and all the things that translate into profit or loss for you, if you are giving a hard bid on installation only.

I learned years ago when bidding to give two prices - installation only, and installation with all materials provided. I would jack my installation only price way up. So, generally, I wound up providing the material from my own supplier.

Not only was I guaranteed to get good material, I bought a whole lot of it, and became a "good customer" to the millwork shop - and the benefits that go with "good customer" status, including prices cheaper than GC's would get.

That will not happen over night, though. Regardless, you will need to get a draw up front to cover materials and, hopefully, some of your labor- since you can't afford to finance either the builder or the homeowner. This is standard practice throughout the industry and should be specified in your contract.

Good luck,

Regards,
jimc

EDT

Thank you very much clamp man. I appreciate it.

Lefty Lucy

I've only lived in California 52 years. Could you tell me where california valley is?


I didn't want to post this untill I at least sreched Google. Here is some of what I found.

California Valley is located along California Highway 58. The community is served by a school and community center with library (open only on Wednesdays). Other than Highway 58 and Bitterwater Road, the only access is through the Carrizo Plain up Soda Lake Road, which is a seasonal improved dirt road, or other seasonal dirt roads to the east. No buses serve the community, and there are no rail lines.

California Valley properties routinely change hands at county tax auction for lack of property tax payment. The prospective buyer is strongly advised to visit their prospective property and view local conditions first-hand prior to investment, and to consult with San Luis Obispo County regarding zoning restrictions and other regulations.

Is this why california vally is not capitalized? Did you mean you were from california valley?

dayspring

I have been using NE for about 10 years. It is a good tool as a guide. I never, ever trust the material prices in the program, prices can change on a weekly basis. Labor cost is best done by keeping records of each job you do and then you can get an average cost from that. However, NE is cheap, and like I said a good tool for info on something you haven't done before. Also you can print out nice estimates with it.

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EDT

Hey lefty, california valley is the surroundings of mountains from the grape vine up near LA to somewhere arround Manteca I beleive. I dont tell people exactly where i live
But thats an interesting search you found there.

Southshorecab

We help a homeowner (or GC, if necessary) design their cabinet layout, decide on trim, countertops, hardware, etc., then apply an overall 40% or greater markup (depending on complexity of the work). Keep in mind than a mark-up means that x% of the total job pre-tax is your projected profit. Example: your cost=$100, then to get a 40% markup, your multiply by 1.67; end result, total job=$167 + sales tax. That's just how we do it and it works quite well. Hope that helps.