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Mark Up Vs Margin

 
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Old 12-23-2015, 10:25 PM   #1
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Mark Up Vs Margin


So, good friend of mines mother in law has a leaking flat roof in another state.

She has terminal cancer and the Dr.'s have given her 6 to 12 months to live. Her son's buddy gave a price to redo the 8 sq flat section in EPDM so I'm sure he knows the family is loaded and she is dying.

The quote was thought to be high so my friend had me look over the quote. Guy has 5 guys for 3 days to do the job. Flag #1 to me after looking at the pics. Easy job, no penetrations, only tricky part is tying into the mansard walls, but that still is no major deal, original roof so it's 1 layer. 1 roofer and 2 laborers can do this in 2 1/2 days.

Well, I am at home looking over the line items, as I have been asked if I'd be willing to go do this job with them.

A couple line items caught my eye, his total for materials on the job is $3,746 probably about right....

Labor is a couple bucks under 3 grand, also not bad...

Here are the kickers....
Delivery $400 come on man, seriously? Delivery is $30, and if you do ANY volume it's free

And the real humdinger....
Overhead... $4,080.00.
GTFO! You sir are an ass hole.

These are the guys that give us a bad name and make it so people think we are gouging, crap really pissed me off.


I know all our prices are one off in the sense that we have different operational costs, but this is straight gouging a rich, dying, old woman.

Last edited by A&E Exteriors; 12-23-2015 at 10:29 PM.
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Old 12-23-2015, 10:31 PM   #2
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Re: Mark Up Vs Margin


So a 40% mark up?

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Old 12-23-2015, 10:33 PM   #3
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Re: Mark Up Vs Margin


Roughly
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Old 12-23-2015, 10:36 PM   #4
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Re: Mark Up Vs Margin


I don't know enough about the project to make any real judgement here. But sometimes companies that actually know how to make a profit and stay in business while others limp by may seem to be charging too much. If me ten years ago realized what me know does, I probably would have doubled or tripled my prices then.
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Old 12-23-2015, 10:39 PM   #5
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Re: Mark Up Vs Margin


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I don't know enough about the project to make any real judgement here. But sometimes companies that actually know how to make a profit and stay in business while others limp by may seem to be charging too much. If me ten years ago realized what me know does, I probably would have doubled or tripled my prices then.
According to his sheet the overhead portion printed on. The form is $240.00, so at 3 days that would be $720, or if it is per sq it would be $1,920, this is gouging
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Old 12-23-2015, 10:43 PM   #6
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Re: Mark Up Vs Margin


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According to his sheet the overhead portion printed on. The form is $240.00, so at 3 days that would be $720, or if it is per sq it would be $1,920, this is gouging
I dont know enough about the project either, to make any judgement. I do know a lot of exterior companies are at 30-40% mark up. Many are probably higher.

If he is getting it everyday, thats his business. He IS showing his numbers, so the client has the choice to decide if its too high. It seems strange he put it under overhead, imo. Or is O&P?
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Old 12-23-2015, 10:43 PM   #7
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Re: Mark Up Vs Margin


I just find it strange that he would have a line item for overhead
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Old 12-23-2015, 10:44 PM   #8
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Re: Mark Up Vs Margin


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According to his sheet the overhead portion printed on. The form is $240.00, so at 3 days that would be $720, or if it is per sq it would be $1,920, this is gouging
or pricing the job so the client does not want it....

or you shoot out a wild price because you are busy with the thought that if you get it you'll figure out a way to do it.
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Old 12-23-2015, 10:45 PM   #9
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Re: Mark Up Vs Margin


I'm not sure what the problem is. They asked him for a price and he gave them one and they can take it or leave it. He may be very busy or have lots of overhead or may just like making lots of money. He isn't required to do the job for minimum profit because she is sick.
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Old 12-23-2015, 10:47 PM   #10
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Re: Mark Up Vs Margin


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I dont know enough about the project either, to make any judgement. I do know a lot of exterior companies are at 30-40% mark up. Many are probably higher.

If he is getting it everyday, thats his business. He IS showing his numbers, so the client has the choice to decide if its too high. It seems strange he put it under overhead, imo. Or is O&P?
Probably o&p and he is leaving out the profit description. I told my friend I'd be between 8 and 10 based on the pics. I'm surprised as well him listing the overhead straight out like he did. The $400 delivery is out of line as well.
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Old 12-23-2015, 10:49 PM   #11
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Re: Mark Up Vs Margin


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I'm not sure what the problem is. They asked him for a price and he gave them one and they can take it or leave it. He may be very busy or have lots of overhead or may just like making lots of money. He isn't required to do the job for minimum profit because she is sick.
No one said that, he seems to be plucking a number out of the air because he knows she is loaded. Like I said to my friend, it wasn't exorbitantly high but I was sure we could save her some money
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Old 12-23-2015, 10:51 PM   #12
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Re: Mark Up Vs Margin


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or pricing the job so the client does not want it....

or you shoot out a wild price because you are busy with the thought that if you get it you'll figure out a way to do it.
She wants it done, her garage ceiling is falling down.

I can not be convinced that this guy isn't trying to gouge a loaded old woman
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Old 12-23-2015, 10:52 PM   #13
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Re: Mark Up Vs Margin


$3800 in material for 8 squares is crazy high. Steal that job son!!!!
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Old 12-23-2015, 10:55 PM   #14
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Re: Mark Up Vs Margin


Then put a couple tarps on it, that should last her.
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Old 12-23-2015, 10:56 PM   #15
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Re: Mark Up Vs Margin


Here is another line item, trash bags, $20...is this not considered an overhead item, a consumeable something you keep around
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Old 12-23-2015, 10:57 PM   #16
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Then put a couple tarps on it, that should last her.
Where is your Christmas spirit
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Old 12-23-2015, 10:58 PM   #17
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Re: Mark Up Vs Margin


Think about it this way-

He is supplying 15 days of labor, 3 guys for 5 days, for less than 200 a day. I dont know what he pays his guys, but i know what WC & GL costs for roofing in Texas, plus vehicle (s) , its maintinance, fuel, payment and insurance. Tools, trailers, maybe a shop. Plus the overhead costs for an employee, unproductive time through out the year, maybe vacation/holidays, cell phone to get ahold of them, accountant, taxes, continuing ed, advertising ect....... maybe he is basing his mark up on that. For all we know he hopes to clear 10% net net after the year is up.

Hard to tell from my big recliner chair in Texas
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Old 12-23-2015, 10:59 PM   #18
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Re: Mark Up Vs Margin


If this is your good friend make a couple calls in her behalf.
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Old 12-23-2015, 11:01 PM   #19
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Re: Mark Up Vs Margin


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Probably o&p and he is leaving out the profit description. I told my friend I'd be between 8 and 10 based on the pics. I'm surprised as well him listing the overhead straight out like he did. The $400 delivery is out of line as well.
So if you'd be between $8k-$10k and he's coming in at just under $11k, how is he taking advantage of someone or gouging? It's not like you're at 8-10 and he came in at $30k.
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Old 12-23-2015, 11:03 PM   #20
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Re: Mark Up Vs Margin


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Think about it this way-

He is supplying 15 days of labor, 3 guys for 5 days, for less than 200 a day. I dont know what he pays his guys, but i know what WC & GL costs for roofing in Texas, plus vehicle (s) , its maintinance, fuel, payment and insurance. Tools, trailers, maybe a shop. Plus the overhead costs for an employee, unproductive time through out the year, maybe vacation/holidays, cell phone to get ahold of them, accountant, taxes, continuing ed, advertising ect....... maybe he is basing his mark up on that. For all we know he hopes to clear 10% net net after the year is up.

Hard to tell from my big recliner chair in Texas
Hey, I'm all about making a profit, just not gouging someone. There is no fing way it is going to take 5 guys 3 days, plus 2 guys half a day to stock it, and 2 guys half a day to drip it. 3 guys 2 1/2 days done. If they can't do it, they shouldn't be doing flats

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