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Although I am primarily a Painter, I do occasionally perform carpentry/renovation projects. Though I haven’t searched this site for a former thread,here goes: I provide materials at cost with no mark-up. My thinking here is that if I “sell” paint then I should own a paint store, not a painting service. Ditto lumber,etc. I do charge for the time to procure materials,however.
While I’m sure it makes sense for a large scale builder to utilize price mark-ups,for overhead expenses,etc; it doesn’t seem right for the smaller,personalized services.Also,it would add substantial cost to the customer who,I figure, is counting on a material price a bit lower when hiring a professional.
I don’t know, seems as though it comes down to a moro-ethical decision regarding middle man status. Any thoughts/comments?
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What are you worth? Why should personal service cost less? Isn't it worth more?
check these threads out.
< Obsolete Link > "help with pricing"
< Obsolete Link > "Need help closing deals"
< Obsolete Link > "How do we justify Profit?"
For some reason, these threads start in the middle so click "all messages" and you'll get them in order. After reading these, please post here, I'd like to know if this changes your view.
*LRZ, profit is one of the "benefits" you're entitled to for accepting the "risk(s)" of buying and especially providing, the materials. What if the paint is bad, peels or cracks (not due to prep or application), or some other "material problem you provide?"If in fact, you are just working for wages, then you are not running a company. It would be a good idea to subscribe to one of the painting magazines. Ther you will learn the proper mark up procedures and percnetages for painting company owners and estimators.It doesn't matter if you're working for a builder or Mr's. Smith next door, marterial mark up is a must if you are to survive, much less make a decent profit.
*LRZ,I spent a long time not marking up material until one year I realized just how much of my money I was tying up by doing so. I could have put that money in a savings account and made money on it ( well, very little in a regular savings).If you use your money to buy material for someone else, you deserve to mark it up at least 10%. 20% is more like it. They are tying up your company funds. If your customers want to front you the money to buy materials, then they can save themselves the mark-up. Otherwise, you need to charge a markup on material or you may not be in business a year from now.Profit is not an ugly word.Ed. Williams
*For those of you that don't mark up material, you're nuts.In our business, there are several people invloved in the transfer of materials from the manufacturer to the final jobsite. Each and every one of them marks up the product. They do the markup to cover their overhead and expenses for handling the product. You are a part of this chain. If you do not mark up the material, then you are the only one.Don't miss an opprtunity here. You are not ripping anyone off, and you are not being a bad business person by doing so. You have expenses related to the handling of this material, so you should mark up the price to cover these expenses. You should also add some % to your markup as profit. You are in business to make profit, right?James DuHamel
*Hey LRZ! Did I see your truck drive through DesMoines, WA a week or so ago?
*Jim: Once upon a time,perhaps;but I've been sequestered here in the "Great Northeast" for at least a few years now. Lately,the local precipitation totals are reminiscent of the WA clime,however.Wow! As far as materials mark-up,I appreciate the replies; personally, I bill for the time to procure supplies and transport them-BUT, if I've forgotten anything, the trip-to-the-store is on my time. I do understand the point of profit,etc; I just feel that on a smaller scale,providing materials "at-cost" is basically good customer-relations;most of my business is repeat/referral. Keep the faith-LRZ.
*Material mark up? Let see car dealer ships never mark up the parts for the car repair either right? We go to the auto parts store and supply them our selves. Bolderdash! If it goes through my check book it is marked up just like other businesses. The hospital marks up at least five hundred percent. What about the kidney or liver they get for "free". They charge for it. This is one of the differences between working for wages and running a business. In most cases a client can get materials for the same price we can. There is no secret deep discount. Therefore we absolutely should mark up material especially since we must warranty the entire job. You want to give the material away, then quadruple your labor if you'll feel better. Nothing, incuding faxing or running copies, is "free" in my office.
*Ricks right about hospitals. As Director of Maintenance for a medical center, the Central Supply dept was under my charge.Larger, more expensive items likd durable medical equipment were marked up at only 200-250%. Medium priced items were marked up at 400% and small items like bandages, dressings, saline, etc. were marked up 600-1000%. That's why bandages cost $3.48 in a hospital and only $.38 in the drug store.
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Although I am primarily a Painter, I do occasionally perform carpentry/renovation projects. Though I haven't searched this site for a former thread,here goes: I provide materials at cost with no mark-up. My thinking here is that if I "sell" paint then I should own a paint store, not a painting service. Ditto lumber,etc. I do charge for the time to procure materials,however.
While I'm sure it makes sense for a large scale builder to utilize price mark-ups,for overhead expenses,etc; it doesn't seem right for the smaller,personalized services.Also,it would add substantial cost to the customer who,I figure, is counting on a material price a bit lower when hiring a professional.
I don't know, seems as though it comes down to a moro-ethical decision regarding middle man status. Any thoughts/comments?