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  1. #16
    Join Date
    Aug 2005
    Location
    Boise, Idaho
    Posts
    550

    Default Re: Dumb question...How are you charging for materials?

    I add 17% to any out of pocket expense - subs, materials, special tools specific for one job, rentals, permits, etc.

    Prior to the job start and on every friday I get a check for the next weeks materials/misc expenses estimate as well as any work completed to that date. Each friday at the end of business I present the invoices and clients cut a check - not a one complains since they know up front that's how things work.

  2. #17
    Join Date
    Dec 2008
    Location
    Somerset, NJ
    Posts
    742

    Default Re: Dumb question...How are you charging for materials?

    Hey guys. It's been a few months, but I'll offer my two cents.
    I don't always markup materials. I have regular labor rates that I use for decks and kitchens (where I mark up materials). I also have labor rates for when I don't markup materials. If a client calls and wants something that they purchased installed, my labor rate goes up to cover the markup that I missed.

    Last summer I remodeled a kitchen for someone who had a garage full of cabinets ordered with another contractor (not sure of the circumstances beyond that). Very profitable job, but had to charge the higher labor rate to make up for the lost markup. This method also helps when clients don't understand the concept of markup (i.e. refuse to pay for a markup).

    I guess the take away should be that as long as you hit your marks from a revenue and profit aspect and know your numbers, you can price the job however you want.
    "American political opportunities are heavily loaded against those who are simultaneously intelligent and honest" --Richard Dawkins

  3. #18
    Join Date
    Mar 2010
    Location
    Great Falls, Montana
    Posts
    374

    Default Re: Dumb question...How are you charging for materials?

    Because I buy alot of my material whole sale it gets marked up. Plus it is less of a hassel when I provide the material because I get extra so I have enough for the job. No having to give money back to the customer for returns that way too.

    Also if you are only charging labor all you are making then is wages. It is hard to expand and keep your business going if it has to come out of your wages. Unless you are upping your labor to cover your business expenses.
    Randy
    ________________________________________________

    The bitterness of poor quality lingers long after the sweetness of a cheap price is forgotten

  4. #19
    Join Date
    May 2007
    Location
    San Gabriel, CA
    Posts
    408

    Default Re: Dumb question...How are you charging for materials?

    Book ordered. Not cheap but neither is learning by trial and error

  5. #20
    Join Date
    Jan 2008
    Location
    Berwyn, PA
    Posts
    759

    Default Re: Dumb question...How are you charging for materials?

    Quote Originally Posted by pablodomingo View Post
    Book ordered. Not cheap but neither is learning by trial and error
    That is some serious wisdom right there!
    Josh O.


    "If people knew how hard I worked to achieve my mastery, it wouldn't seem so wonderful after all. "

    - Michelangelo-

  6. #21
    Join Date
    Sep 2006
    Location
    Western Mass
    Posts
    1,666

    Default Re: Dumb question...How are you charging for materials?

    Quote Originally Posted by okmrazor View Post
    Can't imagine not marking up materials. You are definitely leaving money on the table. Will expand on that when not typing on this damn phone.
    I presume you find the mark up profit to be worth the extra hassle of getting a resale certificate, buying all your material tax free, charging the client tax and then being a sales tax custodian for the state of Taxachusetts DOR.

    I don't. It's not worth hassle I just try to work fixed price and charge a little more for labor.

  7. #22
    Join Date
    Oct 2007
    Location
    Portland, Oregon
    Posts
    1,290

    Default Re: Dumb question...How are you charging for materials?

    Quote Originally Posted by BigLou80 View Post
    I presume you find the mark up profit to be worth the extra hassle of getting a resale certificate, buying all your material tax free, charging the client tax and then being a sales tax custodian for the state of Taxachusetts DOR.

    I don't. It's not worth hassle I just try to work fixed price and charge a little more for labor.
    Lou'

    You don't have sales tax on the services you provide?
    Tom

    "Whoever ceases to be a student has never been a student." George Iles

  8. #23
    Join Date
    Mar 2011
    Location
    Knoxville, TN
    Posts
    38

    Default Re: Dumb question...How are you charging for materials?

    Start selling a "service" and stop selling time and materials. Selling a service allows you to charge for your expertise. Selling T and M puts you in the back of the pick up truck with everyone else who calls them self a carpenter. When you find customers who value a service over $ then you will find more $ and more referrals and repeat business. Don't sell yourself short and start selling a service.

  9. #24
    Join Date
    Sep 2006
    Location
    Western Mass
    Posts
    1,666

    Default Re: Dumb question...How are you charging for materials?

    Quote Originally Posted by tomthetoolman40 View Post
    Lou'

    You don't have sales tax on the services you provide?
    NOPE, the state has lots of other creative ways to tax us like motor vehicle excise tax

  10. #25
    Join Date
    Aug 2005
    Location
    So. NH
    Posts
    22

    Default Re: Dumb question...How are you charging for materials?

    what is your goal for gross profit? if its something like 42% you would multiply the materials by 1.72. You have to take into account that you need to warranty your product spend time ordering and culling and protecting it. so the cost of the material is only a small part of the overall product.

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