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Joined: Feb 2002
Posts: 840
Mister home electrican shouldnt be able to buy a breaker for the same price or cheaper than we can buy it at the "WHOLESALE" house.

I'm not sure I agree with this. I have only seen one supply house that won't sell to the general public. Furthermore, why do most suppliers stay open from 8-12 on a Saturday? Yeah, I know, a lot of electricians work on Saturdays now, but quite a few of the guys in there on the weekends are "Harry Homeowner."

The majority of the supply stores I have shopped at will sell their products for the same price that contractors pay. Money talks.

Joined: Apr 2001
Posts: 54
I agree with Eagle, you need to geet a markup of a min 20 %. I personally use the 1.5 x mat which most agree that that is 50 %. i look at i at 33 1/3 % myself.
for hight dollar items I lean more to the 20 and 25 % margin.
anyone else care to take a stab at it aout the mark up ect.

Joined: Apr 2001
Posts: 449
I have some commercial customers who prefer to purchase all of the materials. I let them know up front that my hourly labor rate is $45.00 per hour when I supply all materials and $55.00 per hour when I do not. I haven't had anyone argue with this arrangement.
Residential customers would probably throw a fit over something like this but commercial/industrial customers are more apt to understand that my hourly rate is much more than wages. It covers the cost of wear and tear on tools and equipment, insurance, fuel, vehicle costs, taxes and lost time. It's hard to get 8 billable hours in a 12 hour day. When I work for a commercial account who is supplying materials I start the clock when I get there and stop it when I leave for the day and subtract what time I took for lunch if I took any. I had this arrangement at a small manufacturing company where I worked every day for 21 months. They said that $55.00 per hour was a bargain. They figured it would have cost them $72.00 per hour for wages, benefits, their half of SS, tools and equipment and safety training. Then they would have to worry about retaining that employee. They also limit their employees to a maximum of 54 hours a week. I had to work many 60-70 hour weeks to meet construction schedules. It was a good gig for me and a real cost effective solution for them.

Joined: Jan 2002
Posts: 1,457
Did someone say Harry homeowner? I though he lived near me! I have one guy (J-man) who helps me occasionally but I then find myself more concerned with keeping him working than getting thigs done. And when he puts my stuff away in my truck....agghhh!

Joined: May 2002
Posts: 68
Why not just use the list price that's what it's there for as most other type of service companys do. and it has a built in markup that's fair

Be Fair, Be Safe
Just don't be Fairly Safe
Joined: Feb 2002
Posts: 375
Markups on material are sort of silly.

If I hire a person to shop for food for me, they charge the cost of the food plus the cost of their time.

If I hire an electrictian to shop for materials for me, he should charge the cost of the materials plus the cost of his time.

You can keep the quantity discounts for combining my job with other jobs.

You can keep the 10% or more dicount theat many businees apply the end of each month.

You can keep the leftover parts (wirenuts and such).

If you have a cost plus contract and you add a markup to your costs, you may have legal problems one day.

Joined: Jun 2002
Posts: 186
mj Offline OP
roger that,george . i agree with you, sell the material for what i paid for it, any other cost with be labor.

Joined: Jan 2002
Posts: 1,457
George and MJ, would you run over to Best Buy and pick me up a t.v? Oh and make sure you only pay what they paid for it. Not going to happen. Guys I assume you are not in business because you need a little economics lesson. The markup covers the time spent to procure the items, (trip to supply house, phone calls searching for oddball items, etc)It also gives a bit of cussion for warranty work if needed. The most important reason for the markup is to make a little profit which is the reason I am in business. Quantity discounts? 10% discounts at the end of the month? Where do these things happen?

Joined: Oct 2000
Posts: 5,392
Contractors need to pay sales taxes, so you must add this to your markup for quarterly's & year end totals.

Of course here, all one need do is cross the state line to NH, and whala!, no sales tax
(applicable to the DIY'ers, as any running account takes in your biz residence)

Another issue is in the contractor 'backing' materials used.

There will allways be a % of failure to be addressed, especially as the level of quality slips ( many factors...)

If I hire a person to shop for food for me

and if you get food posioning....... [Linked Image]

Joined: Apr 2002
Posts: 914
>>>If you have a cost plus contract and you add a markup to your costs, you may have legal problems one day.<<<

George, adding a markup to your cost is the definition of "cost plus".

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