# Material Markup 20% Or 10%



## SPINA ELECTRIC

Hey everybody I am a newly licensed contractor in the state of NJ in the trade 15 non-union 15 union but I'm still learning about pricing can someone please tell me the markup on material is it 20% or 10% I would appreciate it.:001_huh:


Joseph Spina
SPINA ELECTRIC


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## JacksonburgFarmer

what ever you need it to be....:jester:
Depends on the item. Smaller is more, larger is less, % wise. Depends on how you price your jobs. I add 10% to my materials for buffer, then 20% for estimating purposes.


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## 10492

SPINA ELECTRIC said:


> Hey everybody I am a newly licensed contractor in the state of NJ in the trade 15 non-union 15 union but I'm still learning about pricing can someone please tell me the markup on material is it 20% or 10% I would appreciate it.:001_huh:
> 
> 
> Joseph Spina
> SPINA ELECTRIC


 
You tell me.

If you bought a recessed can for $20, why would you sell it for $24, if you could sell it for $120?

How much can YOU sell that can for?


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## RIVETER

I never was a large contractor, and I never got rich, but I always up'd the price of materials by 35%. Check the bill the next time you get auto work done; Chances are your parts price is pretty close to the labor.


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## 480sparky

Here's one school of thought: Base the mark-up on the wholesale cost of the item.

I know one of these MUn columns is MDShunks... I don't remember whose is the other one.


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## Bob Badger

10 to 40 depending on my cost.


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## jwjrw

On bids 25%. On service calls I mark up 35%.


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## petek57

The better question is..how much money do you want to make this year? This month? This week? Today?

Journal of Light Construction..Google "The Process".

Adjust according to your goals.


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## MDShunk

The second column multiplier in 480's chart contains the multipliers I use, based on the cost of each item. I don't have a hundred thousand to one million row, though. I've never sold an item that costs over a hundred grand.


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## SPINA ELECTRIC

Thanks MDShunk and everyone who gave their input


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## MDShunk

I don't hold it against anyone who wants to use a flat percent across the board, but I've found the sliding scale to be most useful. If I sell a 25 cent piece of hardware, it's going to bill out at a buck fifty. If I sell a 2-dollar receptacle, it will bill out at 10 bucks. 

Works for great items that I only use a few feet of. If I pay 100 bucks for 1000' of cat5e, and I use the whole box on a job, I bill it out for $225. On the other hand, if I carry that box around for months, selling 50 foot drops here and there, it bills out at ($5 true cost x 4.25) $21.25 per drop. Selling it that way, I get $425 off that box of cable selling it piecemeal, versus $225 selling the whole box outright. Gotta get paid for hauling this crap around every day.

Works for stuff like connectors too. If I use a whole box of connectors on a job, I make one price. If I sell them a few at a time, over many jobs, I make even more.


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## user4818

OK, question for those of you who use the sliding scale. Say you do a service call and have a standard service call rate of $99 (or whatever.) You do a service call for a broken receptacle. It's a $1 receptacle but you sell it for $8 and maybe you use a few wirenuts and some pigtails and sell them for $5. So your bill breaks down:

Service call $99
Material $8
Misc Hardware $5

Do you ever have a customer who says "$8 for a receptacle????" and the tirade begins.... How do you handle this?


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## MDShunk

Peter D said:


> OK, question for those of you who use the sliding scale. Say you do a service call and have a standard service call rate of $99 (or whatever.) You do a service call for a broken receptacle. It's a $1 receptacle but you sell it for $8 and maybe you use a few wirenuts and some pigtails and sell them for $5. So your bill breaks down:
> 
> Service call $99
> Material $8
> Misc Hardware $5
> 
> Do you ever have a customer who says "$8 for a receptacle????" and the tirade begins.... How do you handle this?


I might, if I chose to itemize the bill. When you itemize, you're begging to have your nits picked.


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## 480sparky

Peter D said:


> OK, question for those of you who use the sliding scale. Say you do a service call and have a standard service call rate of $99 (or whatever.) You do a service call for a broken receptacle. It's a $1 receptacle but you sell it for $8 and maybe you use a few wirenuts and some pigtails and sell them for $5. So your bill breaks down:
> 
> Service call $99
> Material $8
> Misc Hardware $5
> 
> Do you ever have a customer who says "$8 for a receptacle????" and the tirade begins.... How do you handle this?


 
Your wrote it up wrong. It should say, "Replace broken receptacle in living room. Corrected reverse polarity issue, checked final installation for proper & safe function. $112.00"


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## user4818

MDShunk said:


> I might, if I chose to itemize the bill. When you itemize, you're begging to have your nits picked.


Right, well I guess if you tell them the upfront cost of the service call they can probably figure out the balance for the material. How do you avoid this problem?


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## MDShunk

Peter D said:


> Right, well I guess if you tell them the upfront cost of the service call they can probably figure out the balance for the material. How do you avoid this problem?


It's not a problem, therefore it requires no solution. Sell end results, not material and labor. They don't really know what you used anyhow.


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## user4818

MDShunk said:


> It's not a problem, therefore it requires no solution. Sell end results, not material and labor. They don't really know what you used anyhow.


So nobody's every nitpicked a bill of yours before? I'm looking for strategies to explain it should someone ever question it, is all.


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## 480sparky

Peter D said:


> So nobody's every nitpicked a bill of yours before? I'm looking for strategies to explain it should someone ever question it, is all.


 
I'm still hoping for The Holy Grail of service calls. One where I simply turn a screw and get paid.

"Re-orient cover plate screw in living room to vertical position. Verify proper & safe function of receptacle. $100,000,000.00" :laughing:


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## Rudeboy

Peter D said:


> So nobody's every nitpicked a bill of yours before? I'm looking for strategies to explain it should someone ever question it, is all.


Did you purchase the material or did the customer? If the customer knew what to buy and fixed it themselves they wouldn't have called you. Explain that however you like... but they're paying for the fact that you have the knowledge that you know what to buy to make the job work.


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## Rudeboy

480sparky said:


> I'm still hoping for The Holy Grail of service calls. One where I simply turn a screw and get paid.
> 
> "Re-orient cover plate screw in living room to vertical position. Verify proper & safe function of receptacle. $100,000,000.00" :laughing:


Electrician's Lotto?

Go to Los Angeles, better chance it'll happen there than Iowa.


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## MDShunk

Peter D said:


> So nobody's every nitpicked a bill of yours before? I'm looking for strategies to explain it should someone ever question it, is all.


No, not for a very long time. If all the bill has is labor and materials listed on it, you're still begging for it. The bills I use for service work are printed in landscape format, and contain a lot of extra (unnecessary, really) information that adds to the "sizzle" of the overall sale. I've tweaked the actual invoice template quite a bit over these last few years, and I think I have a real winner. I'm not sure if I've posted it here yet or not. I know I posted an earlier version of it on ContractorTalk a few years back. I'm going to clean up my current template, and make it more generic for everyone's use, and post it here again very soon. I do mine from QuickBooks, so I need to figure out how to export it into something like Word so that it's more functional for anyone who wants to adapt it for their own use.


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## 480sparky

Rudeboy said:


> Electrician's Lotto?
> 
> Go to Los Angeles, better chance it'll happen there than Iowa.


 
I've heard you've got a lot of crack-heads out there.


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## user4818

MDShunk said:


> No, not for a very long time. If all the bill has is labor and materials listed on it, you're still begging for it.


Do you give up front prices?


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## MDShunk

Peter D said:


> Do you give up front prices?


Try to. Different people are comfortable with different methods. I'll bill 'em however they seem to be comfortable with. Try for flat rate first.


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## Rudeboy

480sparky said:


> I've heard you've got a lot of crack-heads out there.


In Oakland or Los Angeles?

In either case, you'd be correct sir.


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## blueheels2

Nothing like the medicinal healing powers of crack cocaine!!!!!!


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## 480sparky

blueheels2 said:


> Nothing like the medicinal healing powers of crack cocaine!!!!!!


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## user438

I used to bill out itemized with labor and materials, I would say at least 1 out of 10 would nit pick either the labor or materials.

I switched to giving them 1 price, here is an example 

"Troubleshoot breaker tripping for parking area lights. Found bad ballast in light pole and replaced it. Lights are now functioning ok.

Cost $364"

I have yet to have a complaint yet, in fact it seems as though people like the price better this way. I usually give the price up front for most things but there are some jobs where I will give a ballpark and write the bill up as above

I also mark up materials differently depending on what it is. The customer never sees the material price


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## Rudeboy

How about a little...


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## user438

those costumes are awesome. maybe I'll make that the new company uniform :thumbsup:


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## MisterCMK

Markup depends. Is the customer a good customer or no? Do they have any other option? Is it an after-hours service call or likely to be insurance? Is it service or a contract/bid job?


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## jwjrw

480sparky said:


> Your wrote it up wrong. It should say, "Replace broken receptacle in living room. Corrected reverse polarity issue, checked final installation for proper & safe function. $112.00"


 
I worked for a guy who charged 89.00 hour for 1 guy 129.00 for 2 guys. Listed every wirenut, screw staple used. .50 per wirenut, .10 a staple, 6.00 a single pole switch, 6.00 a cut in box, 3.00 a plate etc. 
Never had a customer complain about materials....Just the labor which was almost always T/M. Thats when I knew it was time to get out on my own.


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## jwjrw

MDShunk said:


> No, not for a very long time. If all the bill has is labor and materials listed on it, you're still begging for it. The bills I use for service work are printed in landscape format, and contain a lot of extra (unnecessary, really) information that adds to the "sizzle" of the overall sale. I've tweaked the actual invoice template quite a bit over these last few years, and I think I have a real winner. I'm not sure if I've posted it here yet or not. I know I posted an earlier version of it on ContractorTalk a few years back. I'm going to clean up my current template, and make it more generic for everyone's use, and post it here again very soon. I do mine from QuickBooks, so I need to figure out how to export it into something like Word so that it's more functional for anyone who wants to adapt it for their own use.


 
Its funny some customers rich or middle class will try to beat you up no matter what your price is... Others just want a quality job and someone to show up on time and fix it...and will pay without complaint. Most of my customers are in big nice neighborhoods and dont question the bill. Some do but know even sears appliance techs charge more per hour.


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## excellencee

I went to McDonald's this morning. I bought a hashbrown. I didnot ask what the hourly rate was nor the markup on materials. The sign said $1. How much can an ounce of potatoes cost? I can buy 12 hashbrowns at Wal-mart for $2 frozen. The bottom line is the customer doesn't need to know my costs for anything. All they need to know is it's $480 to change the light bulb over the kitchen sink.


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## 480sparky

excellencee said:


> I went to McDonald's this morning. I bought a hashbrown. I didnot ask what the hourly rate was nor the markup on materials. The sign said $1. How much can an ounce of potatoes cost? I can buy 12 hashbrowns at Wal-mart for $2 frozen. The bottom line is the customer doesn't need to know my costs for anything. All they need to know is it's $480 to change the light bulb over the kitchen sink.


 
You forgot to ask how much it would be if you bought the hashbrowns at WalMart in and they cook it for you.


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## zappy

480sparky said:


> Here's one school of thought: Base the mark-up on the wholesale cost of the item.
> 
> I know one of these MUn columns is MDShunks... I don't remember whose is the other one.


Do you this anytime you give a estimate, or is this for a service call and you grab a breaker etc. from your van?


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## 480sparky

zappy said:


> Do you this anytime you give a estimate, or is this for a service call and you grab a breaker etc. from your van?



Service calls. Bid work is priced separately.


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## Zog

MDShunk said:


> The second column multiplier in 480's chart contains the multipliers I use, based on the cost of each item.


I think that chart is a good reference to use for materials. 



MDShunk said:


> I don't have a hundred thousand to one million row, though. I've never sold an item that costs over a hundred grand.


It sure makes your day when you do. Requires buying cold beers.


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## Voltech

Peter D said:


> OK, question for those of you who use the sliding scale. Say you do a service call and have a standard service call rate of $99 (or whatever.) You do a service call for a broken receptacle. It's a $1 receptacle but you sell it for $8 and maybe you use a few wirenuts and some pigtails and sell them for $5. So your bill breaks down:
> 
> Service call $99
> Material $8
> Misc Hardware $5
> 
> Do you ever have a customer who says "$8 for a receptacle????" and the tirade begins.... How do you handle this?


I agree with the other posters who said sell the end result. Besides 8 bucks for a recep off the truck is cheaper than what it would cost for me to go get one, or wait on you to return with it.


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## leland

*Service-service-service*

Let the others install for peanuts. what 10-15% total, money tied up for months.

Come in after, maintain-repair etc. parts and labor,strong mark ups. Someone else has done the hard work.
Most Install folks can't be bothered for the return calls.Their guys are tied up on the next fast paced project. unless it is for final payment.

Batting clean up is very good.

Low over head and high mark up.

Commercial/industrial- sometimes resi.


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## LAElectrician

Material Mark up 
Under $5 - 100	%
$5-$10 - 100	%
$10-$20 - 50	%
$20-$50 - 35	%
$50-$100 - 25	%
Over $100 - 25	%

Common Material Mark Up ( what customers can easily find at HD) 
Light Fixtures (not recessed) 50	%
Recessed Lights 50	%
GFCI 50	%
Dimmers 50	%


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## MF Dagger

Do you guys mark up each item on a service call separately? For example say you change out a bedroom worth of outlets and a switch. Do you mark up and use each column separately or as an end total of the material price. Say 6 receps and the switch ring out at 7 dollars your cost do you use the 7.00-7.99 column or do you use the 1.00-1.49 column 7 times?
I agree with not itemizing. My work has invoices that contain itemizing and when i have to itemize I make it so vague and non-laymen so as to be completely unreadable to the customer. Going so far as to use blueprint symbols and catalog numbers. When I worked for my Dad there were a few times where a screwdriver got dropped down a wall or something of that nature. It's very easy to bury a catalog number in a bill for a screwdriver but much harder to explain why you charged them for a screwdriver.


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## Mr. Sparkle

MF Dagger said:


> Do you guys mark up each item on a service call separately? For example say you change out a bedroom worth of outlets and a switch. Do you mark up and use each column separately or as an end total of the material price. Say 6 receps and the switch ring out at 7 dollars your cost do you use the 7.00-7.99 column or do you use the 1.00-1.49 column 7 times?
> I agree with not itemizing. My work has invoices that contain itemizing and when i have to itemize I make it so vague and non-laymen so as to be completely unreadable to the customer. Going so far as to use blueprint symbols and catalog numbers. When I worked for my Dad there were a few times where a screwdriver got dropped down a wall or something of that nature. It's very easy to bury a catalog number in a bill for a screwdriver but much harder to explain why you charged them for a screwdriver.


So if I'm clumsy and drop my screwgun off my ladder I charge that customer for a $300.00 drill? :001_huh:

It should come out of your overhead.


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## LAElectrician

MF Dagger said:


> Do you guys mark up each item on a service call separately? For example say you change out a bedroom worth of outlets and a switch. Do you mark up and use each column separately or as an end total of the material price. Say 6 receps and the switch ring out at 7 dollars your cost do you use the 7.00-7.99 column or do you use the 1.00-1.49 column 7 times?


The 1.00-1.49 column 7 times. And we never charge customers anything for our mistakes, such as breaking or losing our own tools. As Mr. Sparkle says, it should come out of your overhead.


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## MF Dagger

Mr. Sparkle said:


> So if I'm clumsy and drop my screwgun off my ladder I charge that customer for a $300.00 drill? :001_huh:
> 
> It should come out of your overhead.


When the hack before you buries a junction box in the wall and you have to get the screws out of the back to get it up into the attic and you lose your screwdriver. That's when you charge for it. If you want to be high and mighty and eat the cost on that situation that's all you. I have purchased special tools for jobs and charged them to the job plenty of times. Just like if you purchase special material you charge all of it because you don't know when you're using it next.


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## MF Dagger

So if you needed exactly 76' of wire but you cut 80' you'll charge them for 76'?


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## Mr. Sparkle

MF Dagger said:


> So if you needed exactly 76' of wire but you cut 80' you'll charge them for 76'?


No, that is an entirely different business matter then losing, breaking or needing a tool on a job and charging the customer for it. In that case you should be using a small percentage multiplier for waste and theft of material on every job, 1%, 2%, 5%....whatever you think.

And yes on some jobs you will need specific tools to accomplish a task, and if the job is large enough you just might be able to cover the purchase of the tool in the price of the job. However if I am cutting four cans in an inaccessible ceiling in a kitchen I am not going to hide the cost of a see snake because I think their might be plumbing in there.

Once again your hourly or percent per job overhead is what should cover the cost of your tools, pretty much every one of them. I did not make this up, and I am not trying to ruffle feathers, it is the standard and common business practice.


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## MF Dagger

I don't bill every screwdriver used to a job. But if the situation warrants it I will bill for it. If I lose a tool in an attic, that's my problem. I eat that cost. If how I broke or lost the tool saved the customer time and money they can darn well pay for it. The specific situation I talked about I could have billed 8 screwdrivers and still not hit the cost it would have taken them to patch the plaster and wallpaper to open up the other side. I probably should have made it clearer but I charge if the situation warrants it. And for that matter I can think of a few situations where I would not feel one bit bad about billing a seesnake to a job. 4 cans probably not, but a portion of a seesnake, or a "tool rental" could certainly be in order depending on how comfortable you are with what you need to do.


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## MF Dagger

And this is all a very good example for why you don't itemize a bill. If it comes in economical and good for the customer they can be happy knowing you did what it took to give them what they want.


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## Mr. Sparkle

I almost never itemize a bill, it causes nothing but headaches.


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## BuzzKill

MF Dagger said:


> I agree with not itemizing. My work has invoices that contain itemizing and when i have to itemize I make it so vague and non-laymen so as to be completely unreadable to the customer.


That's hilarious and a good idea. Itemization s*cks. I have no set markup, although typically it is 50-100%


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## Tyha

when they ask why you charge $8 for receptacle tell them as far as you know that receptacle didn't magically appear in your truck - it does take time which equals money to procure each item and what happens if the receptacle is faulty in your warranty period. The vendor should replace it no charge but does he think you should come out and replace it for free.


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## IrishRugger

when marking up material has anyone here heard of or even use a mark up method similar to dividing cost by an amount like .65 ? You can use different decimil amounts such as .70, .60, .55

example

Material cost $ 100.00 / .65 = $153.85

I know a plumber and HVAC guy that does this

I personally like MD Shunk's multiplier list and have both of the lists printed out laminated and pinned on the wall next to my desk. I use both and sometimes a combination of both depending on the job. Also I have been trying to figure out a great way to incorporate this into my Quick Books.

Any comments? It's raining here and I waiting for my Kitchen Remodel to get painted and cabinets hung so I can trim it out. In other words I'm a little bored


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## knowshorts

IrishRugger said:


> when marking up material has anyone here heard of or even use a mark up method similar to dividing cost by an amount like .65 ? You can use different decimil amounts such as .70, .60, .55
> 
> example
> 
> Material cost $ 100.00 / .65 = $153.85
> 
> I know a plumber and HVAC guy that does this


If your gonna have a fixed markup percent like 35% this is the ONLY way to properly do it without losing money.


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## Electric_Light

Dnkldorf said:


> You tell me.
> 
> If you bought a recessed can for $20, why would you sell it for $24, if you could sell it for $120?
> 
> How much can YOU sell that can for?


Are you an electrician or parts salesman? There is a point where it becomes ethically objectionable. What would you tell your friends if you had your oil changed at a place that advertised $20* and got charged $20/gal "disposal fee" after markup raising your bill to $40? 
*disposal cost extra

Do realize that many customers don't even know the actual cost and exploiting this is ethically objectionable and I think its harmful to the success of your business in the long run. Also, do take into consideration that you're not the only player, so if you consistently bid the highest price, you'll consistently get turned down.


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## MDShunk

Electric_Light said:


> Are you an electrician or parts salesman?


Both! 



> There is a point where it becomes ethically objectionable. What would you tell your friends if you had your oil changed at a place that advertised $20* and got charged $20/gal "disposal fee" after markup raising your bill to $40?
> *disposal cost extra
> 
> Do realize that many customers don't even know the actual cost and exploiting this is ethically objectionable and I think its harmful to the success of your business in the long run.


You're talking like a homeowner, and I think that is incredibly bad advice. The cost of parts on the truck that I can install NOW has an actual cost associated with it that has a very defined value. There is nothing unethical about charging whatever the customer finds agreeable.


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## 480sparky

Electric_Light said:


> Are you an electrician or parts salesman? There is a point where it becomes ethically objectionable. What would you tell your friends if you had your oil changed at a place that advertised $20* and got charged $20/gal "disposal fee" after markup raising your bill to $40?
> *disposal cost extra
> 
> Do realize that many customers don't even know the actual cost and exploiting this is ethically objectionable and I think its harmful to the success of your business in the long run. Also, do take into consideration that you're not the only player, so if you consistently bid the highest price, you'll consistently get turned down.



I have yet to buy tires from any place that advertises how much it will cost me to dispose of my old tires.


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## robnj772

Electric_Light said:


> Are you an electrician or parts salesman? There is a point where it becomes ethically objectionable. What would you tell your friends if you had your oil changed at a place that advertised $20* and got charged $20/gal "disposal fee" after markup raising your bill to $40?
> *disposal cost extra
> 
> Do realize that many customers don't even know the actual cost and exploiting this is ethically objectionable and I think its harmful to the success of your business in the long run. Also, do take into consideration that you're not the only player, so if you consistently bid the highest price, you'll consistently get turned down.


I think the only thing "objectional" is your involment with the electrical business or any other business at that matter.

That is the worst statment I have EVER seen on a forum. Some parts are marked up 100 % and that really still isn't enough.


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## Electric_Light

480sparky said:


> I have yet to buy tires from any place that advertises how much it will cost me to dispose of my old tires.


So, you won't object if they were to charge $100/tire just because?.... 



MDShunk said:


> Both!
> 
> You're talking like a homeowner, and I think that is incredibly bad advice. The cost of parts on the truck that I can install NOW has an actual cost associated with it that has a very defined value.


Who said you should have to sell AT COST. I'm saying its objectionable to charge "whatever you can get away with". Are you telling me its not questionable to bill $100/ft for Romex?


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## MDShunk

Electric_Light said:


> So, you won't object if they were to charge $100/tire just because?....


That's a straw man argument, because no one charges 100 bucks a tire to get rid of a normal car or light truck tire. 

Let's talk about realities here, okay?


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## robnj772

Electric_Light said:


> So, you won't object if they were to charge $100/tire just because?....


 
A tire company charges a disposal fee based on WHAT IT COSTS THEM TO GET RID OF THE TIRES!!!!!

An electrical contractor uses mark up to compensate his company for the costs involved in purchasing,storing,handling ,warrantying items he sells and installs for his customer.


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## Bob Badger

Electric_Light said:


> I'm saying its objectionable to charge "whatever you can get away with". Are you telling me its not questionable to bill $100/ft for Romex?


Why is it wrong to charge high prices?

Nike sells sneakers for many times what they are worth.

Here is a pen for $2500.00. Are they wrong to ask that much?


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## MDShunk

Electric_Light said:


> Are you telling me its not questionable to bill $100/ft for Romex?


Objectionable to who? The guy who can run to Home Depot any time of the day or night and get it, or the guy that needs it at Midnight on Sunday in the middle of the Yukon Territory?

FWIW, my markups are high, but I've never charged anyone over 1.94 a foot for 12-2 romex.


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## drsparky

MDShunk said:


> Objectionable to who? The guy who can run to Home Depot any time of the day or night and get it, or the guy that needs it at Midnight on Sunday in the middle of the Yukon Territory?
> 
> FWIW, my markups are high, but I've never charged anyone over 1.94 a foot for 12-2 romex.


It is referred to as *Yukon*, not Yukon Territory.


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## MDShunk

drsparky said:


> It is referred to as *Yukon*, not Yukon Territory.


Being's how I'm not Canadian, don't hold it against me if I didn't know they changed their name a few years back. It's been Yukon Territory a heck of a lot longer than it was just Yukon.


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## Bob Badger

I thought it was common knowledge that The federal government's most recent update of the Yukon Act in 2003 confirmed "Yukon", rather than "Yukon Territory", as the current usage standard. 

If you don't know that how do you even tie your shoes? :jester:


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## drsparky

I'm not Canadian but I listen to the CBC more than the American radio stations, no commercials! Guess it helps when you live near the border.


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## 480sparky

Electric_Light said:


> So, you won't object if they were to charge $100/tire just because?....


If that's the price I agreed to, I could care less if I paid $0.01 for the tire and $99.99 for disposing of my old one, or $95 for the tire and $5 for disposal. Makes no difference to me. If $100 gets me on the road to making money again, I'm happy.


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## Electric_Light

480sparky said:


> If that's the price I agreed to, I could care less if I paid $0.01 for the tire and $99.99 for disposing of my old one, or $95 for the tire and $5 for disposal. Makes no difference to me. If $100 gets me on the road to making money again, I'm happy.


Only if you knew the total cost upfront.


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## 480sparky

Electric_Light said:


> Only if you knew the total cost upfront.



And like I stated, I've never seen a tire advertisement that stated "$xx.xx for tire disposal."

BTW, ever look at your phone bill lately? Check out all those fees and charges and line items that even the phone company can't explain!


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## Electric_Light

480sparky said:


> And like I stated, I've never seen a tire advertisement that stated "$xx.xx for tire disposal."
> 
> BTW, ever look at your phone bill lately? Check out all those fees and charges and line items that even the phone company can't explain!


Much of those fees are government mandated. 

I suppose as for tire disposal, if it isn't advertised, the expectation is that such cost would be reasonable and customary. If most places are charging $2/ea, then I find out AFTER installation that the one place I thought was cheap charged me $20/ea, I'm going to squeal about it and never return there.


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## robnj772

Electric_Light said:


> Much of those fees are government mandated.
> 
> I suppose as for tire disposal, if it isn't advertised, the expectation is that such cost would be reasonable and customary. If most places are charging $2/ea, then I find out AFTER installation that the one place I thought was cheap charged me $20/ea, I'm going to squeal about it and never return there.


Just WTF does any of this have to do with material markup?


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## Voltech

480sparky said:


> And like I stated, I've never seen a tire advertisement that stated "$xx.xx for tire disposal."
> 
> BTW, ever look at your phone bill lately? Check out all those fees and charges and line items that even the phone company can't explain!


I think they charge you even if you take the tires with you.

Im looking to apply this to our trade some how. :icon_wink:

Imagine if say Direct TV over billed their 10 million customers. How many people would catch it, and how many people would ask for it back.


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## Mr. Sparkle

Take one look at your next cell phone bill and tell me if you think it's fair.


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## Voltech

Mr. Sparkle said:


> Take one look at your next cell phone bill and tell me if you think it's fair.


I dont get a bill for my phone, but I buy the mins. Our CO uses straight talk. We buy the phone and they pay $45 a month for unlimited. Only the reg tax applies. Its really a good deal from walmart.


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## Mr. Sparkle

I will never voluntarily spend any of my money at Walmart, ever. 

YMMV.


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## NolaTigaBait

Mr. Sparkle said:


> I will never voluntarily spend any of my money at Walmart, ever.
> 
> YMMV.


I tend to agree with this....I try not to shop there. Don't hate but, I was forced to get my .45's from there b/c everyone else was out!


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## NolaTigaBait

480sparky said:


> If that's the price I agreed to, I could care less if I paid $0.01 for the tire and $99.99 for disposing of my old one, or $95 for the tire and $5 for disposal. Makes no difference to me. If $100 gets me on the road to making money again, I'm happy.


I had a lady tell me just today that , " since you finished faster than you thought, are going to charge less?"...I felt like giving her the , "if it takes me longer , will you pay more?".........she paid.


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## 480sparky

NolaTigaBait said:


> I had a lady tell me just today that , " since you finished faster than you thought, are going to charge less?"...I felt like giving her the , "if it takes me longer , will you pay more?".........she paid.



That's the line I always use.... "Well, if it took longer than I had figured, would you pony up some more money for me?"


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## sparky970

480sparky said:


> And like I stated, I've never seen a tire advertisement that stated "$xx.xx for tire disposal."
> 
> BTW, ever look at your phone bill lately? Check out all those fees and charges and line items that even the phone company can't explain!


Look at it carefully, I've had to have charges removed twice from a service company that piggybacks on Qwest's bill. This was for a service that was not requested, used, or even needed, and Qwest allowed it.


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## electricmanscott




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## Cletis

I charge from 5% to 500% Depending on item


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## sparky970

We add 7% for material.


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## brian john

Peter D said:


> So nobody's every nitpicked a bill of yours before? I'm looking for strategies to explain it should someone ever question it, is all.


 
Maybe 1 in a 100 for commercial, I am sure HO's are a bit tighter.


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## brian john

sparky970 said:


> We add 7% for material.


 
7% of what?

When I first went in business another contractor told me, "Screw employees, I just want to selll material at my markups, that is where your money is friend."


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## brian john

Electric_Light said:


> Do realize that many customers don't even know the actual cost and exploiting this is ethically objectionable and I think its harmful to the success of your business in the long run. Also, do take into consideration that you're not the only player, so if you consistently bid the highest price, you'll consistently get turned down.


 
Exploiting them.

You been with the Occupy Wall Street crowd the last few weeks?


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## sparky970

:no:


brian john said:


> 7% of what?
> 
> When I first went in business another contractor told me, "Screw employees, I just want to selll material at my markups, that is where your money is friend."


7% mark up on material.


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## jza

I mark everything up 800%. If a customer doesn't like it they can answer to my EDC Calico M100.


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## Wireman191

jza said:


> I mark everything up 800%. If a customer doesn't like it they can answer to my EDC Calico M100.


 Thats awesome advice coming from an apprentice.:001_huh:


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## wistech

480sparky said:


> Here's one school of thought: Base the mark-up on the wholesale cost of the item.
> 
> I know one of these MUn columns is MDShunks... I don't remember whose is the other one.


This post is old but I manually entered this table into MySQL and exported it as an sql and csv file if anyone needs it.


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## Southeast Power

For me, 30% works best.

Materials plus tax /.7 as a rule of thumb.

100 X 1.06 =106

106 / .7 = 151.42

Math check

151.42 -30% = 106

Perfect

If you mark up 10% for some strange reason

100x 1.06 = 106

106/ .9 = 118

Math check
118-10% = 106

Perfect.


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## Pearce Services

I think the distinction needs to be made between parts purchased for a job and parts that are stocked on a service vehicle. 

I have parts that may have 10,000 miles on them in the back of a service van waiting to be needed. You can be sure that my cost for that part has increased 5 times or more in carrying cost, fuel use, storage space value, and a fair return on investment for materials paid for months ago. 

The value to the customer is much higher than the hard cost as it solves a problem on the first trip. No added trip charges, no freight costs or security/safety/productivity costs to my customer incurred as they wait for a return trip.

What is a bottle of water worth?


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## John Peters

On contracts and large parts I find my customer are happy with wholesale + tax +15% overhead and 10% profit. This boils down to wholesale +1/3 approximately. They hardly ever ask, but if they do I just explain the above. On contracts part of the small type explaines the above. 

Most of you are charging too little. Think how much time it would take for the customer to go buy the part. And they don't have the knowledge of what to buy anyway. Usually.

On service calls - just guess high - and don't worry about it. I recently charged $60 for 3 two pole 20 amp circuit breaker 20 bucks each = $60. 1 GFI $55 as an add-on to a service call that was invoiced at $254.00 for the first hour. ($100 travel and $150 per hour.) Flat rate would probably be higher, but I had only been there a half an hour so far.

You're right, those two numbers don't add up to 254, but I just like odd numbers. Odd numbers are harder for the customer to remember and when it's time for the check and the customer ask you again. "What was the price" you know they're not worried about money.

I never tell the customer the service call price either on the phone (a no no) - (A.Q.) or in person. (Don't call it labor - You are a professional, not a laborer.) I always point to the price with my finger ($254) on an invoice.

Something typed on an invoice is much harder to debate or ask about, and they don't ask anyway. If they do ask the above price for labor is high enough or I can easily give a discount for single mother with kids or whatever the situation is. 

You are a professional and you should charge professional prices. Your dentist doesn't tell you how much an hour he bills out. He just gives you a number to come in and tell you what's wrong and another number to fix it and you're happy. 

Just my 2 cents (48 years in the trade) but I'm glad to hear your 4 cents of sensible comments.


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## Kaffeene

I charge anywhere from 10 - 30% on average depending on the item and type of work.
On service calls I may charge more. 
I don't count wirenuts, staples or screws. I just include that into the cost of another item such as NM cable or boxes. 

I also sell AV equipment and I usually sell those at retail costs and sometimes with discounts. My margin on some of those products, but not all, can exceed 30% and up to 50%. Sometimes the margin is peanuts. 
However, I may take in to account an exceptional margin on a job when I am pricing out my labor or installation time and may reduce my install costs based on equipment and products sold.


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## sparkitup619

MDShunk said:


> The second column multiplier in 480's chart contains the multipliers I use, based on the cost of each item. I don't have a hundred thousand to one million row, though. I've never sold an item that costs over a hundred grand.


This sheet is per item? Not total material cost?
Can you use it for total material cost?


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## sparkitup619

480sparky said:


> Here's one school of thought: Base the mark-up on the wholesale cost of the item.
> 
> I know one of these MUn columns is MDShunks... I don't remember whose is the other one.


What column do you use? MU1? MU2? What does each column mean?


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## CAUSA

sparkitup619 said:


> What column do you use? MU1? MU2? What does each column mean?


Client who at within 30 days column 1
Client who plays the 120 day game column 2

the column, are for parts, materials markup factors.

I use a similar matrix but keep it simple. Depending on job/trade billing.

and add a shop supplies line as a percentage to the total bill to cover consumables that are a pain to try and track but gets used in the repair/install


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## CAUSA

CAUSA said:


> Client who pays within 30 days column 1
> Client who plays the 120 day game column 2
> 
> the column, are for parts, materials markup factors.
> 
> I use a similar matrix but keep it simple. Depending on job/trade billing.
> 
> and add a shop supplies line as a percentage to the total bill to cover consumables that are a pain to try and track but gets used in the repair/install


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