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Markup Idea

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Old 02-05-2015, 02:36 AM   #21
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Re: Markup Idea

Originally Posted by greg24k View Post
That explains why Irish drink so much
Some of the best whiskey I've ever drank was from Ireland.
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Old 03-01-2015, 02:38 AM   #22
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Re: Markup Idea

I don't know much about a markup on parts because as a roofer we don't do that but I'm guessing the best thing to do would find out what your competition is doing for parts markup and then take it from there to stay competitive. Good Luck
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Old 03-01-2015, 08:03 AM   #23
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Re: Markup Idea

I don't think your competition is going to tell you what they mark up by
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Old 03-02-2015, 05:53 PM   #24
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Re: Markup Idea

You could reverse engineer your yearly goal.

Lets say you have a goal of 100k. Work that number backwards until you know how much per day/hour your shooting for.

I would then figure out your yearly fixed expenses and work that backwards.

Know your payroll obligations.

Now you have your day rate.

Thats how I do it anyhow. I dont worry about materials much, a bit- but not so as to drive me nuts. I put it in the labor and let it ride.

A quote will either be in the ball park or it wont, doesnt really matter how you break up that number....2 nickles for this piece of wood or 2 nickles more to nail it on. Its still 2 nickles.

As a remodeler I would worry about materials much more o/c.
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Old 03-04-2015, 01:16 AM   #25
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Re: Markup Idea

Everyone seems to have their special system for generating their contract total and having some sort of system allows you to have a template that gives you your specific and personal guide.

When bidding jobs my very first goal is to get as much money from the customers as I possibly can. I don't believe there is such a thing as being fair. We can be high-priced, reasonably-priced and low-priced. The word 'fair' doesn't fit into the price we charge.

There is a price curve where we are either too low, in the ballpark and too high. Somewhere, in the curve we will make the highest annual return and when our prices get too high our profits diminish.

The very first thing I do when pricing a job is I have to get every cost on a piece of paper as close, detailed and accurate as possible. These costs include materials, labor, insurance overhead, etc. Then, I play with the numbers and add as much as I think the customer will pay. Every job is different and a percent set in stone does not work. For one customer I may add 30% to my entire cost. For a government facility I may add 500%, or maybe even more. I may do two identical roofing jobs for $12,000 and $18,000.

The way contractors charge prices should be no different than the way the real estate business changes the prices they want for homes every day and the way car dealers change prices for vehicles. There are no laws governing the way different people pay different prices for the exact same items.

A few years ago, I offered the full price for a property. The real estate agent sent the offer to the owner and the owner sent a counter-offer asking for $75k more than the full asking price. Why do contractors need a system that limits profits.

I put my markup percent on the total job and not only the materials. The materials for my work costs about 25% of the total contract amount and putting a markup on only the 25% is insignificant.

If you are working for T & M then I think your markup has to be negotiated with specific customers. I always consider the risk-to-reward ratio and I would not accept less than a 25% markup on materials. If I am going to shell out $1,000,

pick up the materials
pay for the transportation
guarantee them
account for them
handle returns
damage and

then I want no less than 25%, or $250 for every $1,000. Otherwise, let the customer have all the materials delivered to the job site, charge by the hour while you are sitting on your butt because you have material problems and you will earn the same with less loss and less stress.


Last edited by pcplumber; 03-04-2015 at 01:28 AM.
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