Sub Mark Up?

Mellison

My base mark up on subs has been 20 percent.
I have been thinking of bumping it up to 25%.
Let's say you:

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dubz

Around here, 15% across the board is pretty standard. But if you can get 25, more power to you.

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orson

There are many old threads on this, here is one.

I markup my subs %10 which is my markup for net profit to yield a 9% margin.

I use a labor/capacity based markup for my overhead.

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Mellison

We will see.

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orson

Discussing how much you mark up your subs without discussing anything else about your pricing is pretty meaningless.

Someone else may mark subs up more but mark something else up less but still have essentially the same pricing as you, just figuring it differently.

This is also makes statements about what the "standard" sub markup is rather dubious.

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SLSTech

It maybe tough in this climate, but you know your market
If you can get it, great

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Mellison

Point taken,
It was pretty ambiguous.
FYI my sub mark up is totaly removed from every other aspect of pricing a job. I price a job and then mark up my subs.
It is just that today I put together two proposals. One had about $10,000.00 worth of HVAC and the other about $6,000.00 worth of plumbing and I was just thinking out loud as to whether I should start at 25%.

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Mellison

This "climate" was probably the reason for my original thoughts.

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"Enjoy Every Sandwich" Warren Zevon

rbsremodeling

50% min

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RCPainting

I have always been curious how that works. I do (did) a lot of work for a 2 great GCs. Sometimes I get checks from thier company acct, sometimes I get checks direct from the bank with the HOs name.
If the bank is cutting the check for my invoice amount how does the GC show the mark up?

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SLSTech

Uhhh, your markup is in the original price??? You then deposit the check

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Mellison

I think the question was how does the GC get the mark up, not RC Painting. Am I correct?
If I am correct, when you get a company check from the GC they probably marked up your labor and paid you your quoted price.
When you are paid by the HO check there was probably no mark up added.

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RCPainting

OK, that did not come out right!
Do you have a line item that says "sub mark up"
I know the two GCs I work for show the HO our invoice and (other subs')
I was just curious how you show this mark up.

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Mellison

Now I'm confused.
I never show my customer my sub's contract.
That can be suicide!!!

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SLSTech

Depends on the type of contract - T&M / Fee Based / Open Book

Generally just another quick line item

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outlaw

This sounds like a cost plus job for the gc. Their "mark-up" is already negotiated wth the homeowner. They show them your bill and get a % of it .

Grumpy

Depends on the size of the job and scope of the work. YOu can get as much as you truly believe you deserve since you will be presenting your price with confidence. If you truly feel you do better work than your compitition then you should be charging more. I'd rather lose a job for being to high than get a job and be too low.


At the end of the day, week, month you have to achieve a certain profit, how you arive at that number is up to you. For me it's $1000 a day gross profit to cover my overhead and pay my measly salary. If we are earning less than $1,000 a day I am losing money. If we are making more than $1000 a day there is some share holder (me) profit left over. For me, I find 45% to be a good number, but I am not a builder and that %45 is variable from job to job. I need to earn $1k a day, and that's what's important.

Wolfgang

Do what everyone else does, (or so it seems), go with the lowest bidding hacks and mark it up as much as you want. That's why I only work for 2 or 3 GC's. Wolf dont play that game...

dubz

Do you really get that down there? Is that standard or is it because of what you have built your business to, enables it?

BTW, I visited my sister in DC 2 summers ago and was impressed with the many nice neighborhoods with historical homes.

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