I always try to get them to allow me to purchase/control material orders. That way I'm responsible for fit, quantity, warranty, delivery, being there on time, etc. I don't markup materials too much, so most of the time it's not worth the clients hassle. My markup is mostly to cover any issues for warranty or other unforeseen problems plus a small amount for O/H & profit. A lot of the time, my contractor discounts makeup a good portion of my markup. I do include time in my bid for "project management" for researching, ordering, and picking up materials. Most of the time, I do a fixed lump sum bid so this is just part of the cost.
Now if a client wants to buy materials themselves, that is fine. Sometimes clients want to put it on credit to finance. Sometimes they still think they are "saving." I will add the lost O/H & profit into my bid. Additionally, I include some time for "project management" because there could be a lot of issues that I still need to deal with (moving schedules, measuring, etc). Net-net, they don't save as much as they think. I also include a clause in my contract as to their responsibilities when supplying their own products:
Owner Supplied Materials:
Contractor accepts full responsibility for all materials and labor Contractor supplies. Contractor does not accept full responsibility for materials supplied by Owner. Owner assumes the following obligations when choosing to purchase their own materials; which includes fixtures, or appliances:
Ordering correctly and on time.
Receiving and inspecting all materials.
Moving the materials to the room in which they are to be installed.
Returning and exchanging items, as well as negotiating the terms of resolution with the seller in the event of missing or damaged parts, the wrong material being ordered or delivered, or any other problem concerning Homeowner supplied materials.
Ensuring all materials meet all applicable codes and ordinances.
Guaranteeing that all materials, including “rough-in” items placed inside of walls in the early stages of the job, will be present at the job site and in proper working order.
Altered work schedule and additional time charges in the event of missing and broken pieces or wrong materials.
Full responsibility for all guarantees and warranties pertaining to these materials; Homeowners hold contractor harmless for any products or system malfunctions related to defective products / materials provided by Homeowner.
When clients want to buy all the materials to avoid contractor mark ups, no problem, just jack up your labor rates so that you make the same margin as if you were buying the material.
And make sure you charge them for the time wasted on delays and problems with their ordering and purchase mistakes.
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