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Thread: contractor's markup

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    Default contractor's markup

    I know the cost of labor does not cover all the overhead and office help. How much do contractors markup supplies? Such as for faucets and doors etc. If they agree to let you buy the materials would they charge more for labor? I know they have to pay for pick-up and delivery charges right?

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    Moderator & Master Plumber hj's Avatar
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    Default charges

    There is nothing universal about how they do it. Any individual contractor will charge the way he sees fit to cover his expenses. If he is into remodeling where the contractor/homeowner supplies the fixtures, his labor and installation items have to cover the expenses. If he is supplying everything, he may, or may not, give a discount on the labor and cover the difference in the fixture cost. Or he may just charge the normal fees and make a greater profit. No contractor will tell you HOW he is charging if it is a fixed price bid, so your only way to tell if you are getting a bargain is to get multiple bids and hope the one you pick did not make an error and has to cut corners to break even.

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    Master Plumber Dunbar Plumbing's Avatar
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    1-3000%, given the product.

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    Talking it all depends....

    Quote Originally Posted by RUGGED View Post
    1-3000%, given the product.

    I agree with you Rugged.. sometimes the mark up is fair when the house is clean,,,like 30%

    The price goes up to 3000% when you need to wear a hazmat suit just to keep the cock-roaches , fleas and whatever disease ridden filth lives in the place with them.....

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    Plumber jimbo's Avatar
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    There is no set markup. There is a cost to order, pickup, store, maintain inventory, etc, not to mention the time value of the money he fronts for the purchase. In addition, if a contractor installs something he provided, then he is usually on the hook for the LABOR cost of any warranty issue. All these things cost him money.

    In broad terms, basic items like pipe fittings, caulk, solder, etc....the markup could be quite high as a %, because there are FIXED DOLLAR costs as I mentioned in the first paragraph. Big money items like faucets, fixtures, etc. there might be a basic rate which might be 10% or might be 30%. Depends.

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    Jack of all trades frenchie's Avatar
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    There's also different philosophies about which bits of overhead gets paid by material markup, and which bits get built into the labour charge.


    I personally think most contractors, charge too low for labour and depend on the materials mark-up to make up for it. Because everybody asks what your hourly rate is, and almost nobody asks what your mark-up is.

    The thing is, most contractors don't realize that's what they're doing. They don't know all their numbers, we guesstimate a lot... As long as the total works out, we don't even realize how messed-up our estimating systems are.

    So you CAN probably save yourself some money, by supplying some of the materials. It's pretty easy to argue "why should I pay a markup on something I bought?"

    But you will, in fact, probably be cheating your contractor if you do that.



    2 other thoughts:

    - you won't get a faucet at the same price a plumber will; the difference might even be as large as his mark-up.

    - are you expecting him to warranty the installation? are you expecting him to replace it if he breaks it while installing it? Because his risk, in both cases, is what that overhead is supposed to be there for.
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    Radon Contractor and Water Treatment 99k's Avatar
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    - are you expecting him to warranty the installation? are you expecting him to replace it if he breaks it while installing it? Because his risk, in both cases, is what that overhead is supposed to be there for.
    These are excellent points that most homeowners do not understand. Be prepared for the following if you provide the materials:

    -Less may be interested in quoting the work
    -If the product is damaged or defective (and it happens) you will still be paying for all the labor and trip etc
    -If it fails prematurely, let's say less than one year, don't expect any kind of waranntee.

    Unless this is a very unusual part / extremely hard to find, let the plumber buy the parts.

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    Plumber jimbo's Avatar
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    Quote Originally Posted by frenchie View Post
    There's also different philosophies about which bits of overhead gets paid by material markup, and which bits get built into the labour charge.


    I personally think most contractors, charge too low for labour and depend on the materials mark-up to make up for it. Because everybody asks what your hourly rate is, and almost nobody asks what your mark-up is.

    The thing is, most contractors don't realize that's what they're doing. They don't know all their numbers, we guesstimate a lot... As long as the total works out, we don't even realize how messed-up our estimating systems are.

    So you CAN probably save yourself some money, by supplying some of the materials. It's pretty easy to argue "why should I pay a markup on something I bought?"

    But you will, in fact, probably be cheating your contractor if you do that.



    2 other thoughts:

    - you won't get a faucet at the same price a plumber will; the difference might even be as large as his mark-up.

    - are you expecting him to warranty the installation? are you expecting him to replace it if he breaks it while installing it? Because his risk, in both cases, is what that overhead is supposed to be there for.
    Frenchie, these are excellent observations. One thing I might take issue with....."nobody asks about your markup". What with blue and orange, a lot of people will throw that in your face: They KNOW exactly what a 10' piece of L copper costs, or a Delta faucet, etc. I have seen people walking through a store with a notebook, writing down prices. The orange guy asks them if they need help, and the response is " I think my contractor charged me too much!" I have seen and heard this...for real!

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    Jack of all trades frenchie's Avatar
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    True. I guess "nobody" was an overstatement. But compared to asking what your hourly rate is?
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    Moderator & Master Plumber hj's Avatar
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    Default markup

    I had one customer who found out where I had purchased her bathtub, so she called there and pretended to be my secretary and asked how much I had paid for it. The markup also varies with the cost of the item. A 25 cent item is going to have a higher percentage, than a $3,000.00 commercial water heater, for example.

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    Illinois Licensed Plumber SewerRatz's Avatar
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    Quote Originally Posted by hj View Post
    I had one customer who found out where I had purchased her bathtub, so she called there and pretended to be my secretary and asked how much I had paid for it. The markup also varies with the cost of the item. A 25 cent item is going to have a higher percentage, than a $3,000.00 commercial water heater, for example.
    My supply house knows who I am and when ever I call I always ask for list price, never my cost. So when they get someone asking for my cost on the phone they know its a fraud calling, and asks for our account number. The person then hangs up on them after a few minutes of hee-hawing around about forgetting what the number was.

  12. #12
    Moderator & Master Plumber hj's Avatar
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    Default price

    I seldom call, and when I do it is to find out my cost of an item so I can finish a quotation. I do not use the list price unless it is a "list less a percentage" contract. I establish my own selling price using the cost, regardless of whether it comes out higher or lower than list. If the customer does not like the price, they can get it themselves at Lowes or HD.

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