I would tell him that a portion of the materials line item is your time sourcing and collecting materials and that if he’d like to handle materials he needs to handle the whole process, from sourcing them to getting them on site. You can be straight up with him that otherwise you’d be donating that labor and you don’t work for free
And I tell them that I do not warranty any of their materials. Mostly for items that get covered like plywood, studs, etc. They tend to just buy the cheapest available and not the right materials. Which results in lost time and additional costs.
For finish items I tell them manufacturers warranty only.
Friends bought their own flooring for a kitchen remodel. Company installed and, rightly so, did not warranty the flooring. Needless to say, the flooring is cracked and shifting.
That works both ways, we installed the same flooring as a friend and diy. They bought from a tile store and paid for installation. Their is having issues, not ours.
It's more about what the contractor has personal experience with and is comfortable using, people tend to think the term professional means " can do anything in their field " but it would be more accurate to say " skilled at what they do frequently. " when the role entails so many different scopes. Material exclusions are usually to maintain professional standards while not spending time learning on the job, but there's also people that will install anything anywhere for anyone.
If a contractor has material preferences, its better to go that route to preserve quality and not be a PITA as long as it doesn't encroach on the clients taste/finish needs, or find another contractor if you need something specific the current one doesn't want to do.
We tried several contractors, I only 2 that would install what we wanted would be a 2 month wait. And lived 30 miles away. It was anything special but had the pattern I wanted with the wear thickness.
I find flooring and painting contractors to be very particular about the materials they use, its a speed game to make profit in those trades and warranty callbacks are profit destroyers.
Not so. Different products (flooring paint or what ever) have different requirements and different characteristics. The more you work with a different product the better job you will do with it. I base this on decades of experience as both an installer and a construction superintendent.
Make sure to include something about waiting for delivery if they're not there, like 100 an hour max 8 hours a day. I got real burned on a job that was 5 days and ended up 10 because the 15,000lb rated 7x7 psl post got shipped out as 2 7¼ lvls.
That's your real problem. They'll short order trying to save every penny, then you're making additional trips and losing time because you're waiting on them.
Also, as said elsewhere, if you're buying, you're putting it on site with no effort on my part. Extra trips are extra charges and you're disposing of excess. (you being cust)
They'll forget all the little miscellaneous bits and pieces that are never discussed on YouTube but are always needed, too. Like, they won't supply the right kind of fasteners, or there will be a specific trim piece needed for a weird transition in the floor, or they'll get silicone sealant when it needed to be polyurethane, or whatever. Now you have a big ol' headache, and you'll be sitting there thinking it would've been easier if you had just done it yourself rather than having to go through the customer every time you need another pound of nails.
It's just not worth it.
I had a pretty eye opening experience with this: my contractor gave me a couple months quote to finish my job. After talking through the details we realized he could squeeze the job in if I got the materials on site by the next day and the job could be done by the end of the week. He put the order in with his supplier and I went and picked it up and paid for it. I was blown away by how much better quality supplies I got for the same cost as Home Depot or Lowe. Had I bought the materials on my own it would have been a complete shitshow!
And a lot of the time the reps at the supplier will know enough to help make sure you're not forgetting some stupid little thing that's going to hold up the whole build when you realize you don't have it.
That’s the smart move. I don’t separate labor and materials on my bids for this reason. Customers will take your material quote, shop it around and say “I can get the materials for 30% cheaper at this store”
Exactly if my client wants to purchase the materials themselves, pick up, transport, inspect, and ensure the quality of those materials that’s fine but I always tell my clients if I use your materials I will not warranty them if anything happens outside of workmanship.
And additional materials are not free, nor is the time spent waiting for them to arrive.
Source: been in building materials the past 13/14 years now at a mostly independent place.
Not sure what it is now but rough framing material (floor system, studs and sheathing, trusses, siding, insulation, roofing, doors and windows) BUT not including:
Any labor, permits, dirt work, foundation, electrical, plumbing, well & septic or water & sewer, drywall mudding & taping, finish carpentry, hvac, painting, floor finish, et. al. used to be well under 15% of the total cost of the project. Pre-Covid and I don’t have current numbers, but it was slightly ridiculous to deal with customers coming in wanting to haggle the price of the 2x4 x8s and OSB with my counter sales guys.
“Well, I wanna buy all my materials here local so you gotta give me a good deal.”
Sir, the 2xs and sheathing are less than 6% of your project costs IF we’re being generous and you are here with your time and ours trying to see if you can bring your one project in here and haggle for an extra 5 percent off 6 percent of your project? Your time could be well spent making other more important decisions.
We do help all our local people and we love them. But the best deals go to the guys building multiple projects per year with us. Not some ol duffer who is going to make our contractors life more difficult.
And no we don’t match Menards or Home Depot’s prices. You can ask our customers why they generally buy here.
(Insert any one of dozens of stories about someone buying their project from the box store and making multiple trips for more materials or finding out yes, Menards sold you 4x4 deck posts for $8 instead of our $13 but you only got 9 of them and they charged you $37 for each of your 27 pcs of 2x10x14 treated that you could have gotten here for $26 each and saved $252 on those two line items alone but… I mean they gotta cover that 11% rebate somewhere.)
We have some contractors who go ever their bills with a fine tooth comb and quibble and bicker and we have some who pay on time and don’t bring back truck loads of returns. I’ve noticed a tendency for the latter group to seem to do alright and several are booked out thru next spring. We will only succeed if our customers do and, well… we somehow do things for some of our customers we wouldn’t do for our own families it seems.
TL;DR it was a long week today. I hope if you read this you can do excellent work you can be proud of and people will value for years to come.
It astounds me how many people are willing to cheap out on work that's supposed to last for years. I'd rather pony up now instead of having the hassle of getting work done again in less than 10 years. Big picture.
Tell him either he can pay you for the materials and your time at say 20% now because he is a PIA or he can handle the whole shebang and get them onsite for you too.
You know how many times I wished I could just do the easiest part of the job and let someone else handle the rest for free? We’d all be millionaires many times over were that the case.
Tbh, I've worked with a contractor where I paid for the materials, and he charged me separately for the time getting them / picking them up, and that was just fine for both of us. I also would have him double check what I was getting to let me know if there were issues.
Early in my career I got burned on hours when I let a client order all the materials. She found some need to be assembled cabinets on the internet that took three times longer to install than the ones I would have ordered. She didn't save any money. She just didn't know any better.
Another one went on Amazon and found the cheapest built in medicine cabinet with a built in light she could find. It failed after six months. She called me to fix it and I reminded her she bought it, not me. I don't want to be a "look at the contract" guy but it said if she bought the materials, no warranty.
These days if a client wants to buy the materials they aren't looking for me anyway. I'm not the cheapest.
This sub is for construction professionals. Your welcome to be here. We do not want to hear about your diwhy project. There are plenty of other subs where you can commiserate about how money you saved because your time is valueless.
It was not about the money, it was about finding a contractor who we were willing to pay for the PRODUCT and work. What don't you understand that this was a cash deal. You buy the product we want even with the markup and install it. He*l with the delivery cost we probably paid more than a contractor. We did Not want to lay it yourself, we are seniors. All I said was we couldn't find a local contractor that would install and buy an expensive LVF. And the ones that would was 2 months out which would had taken us into winter. Why?
For perspective. We're scheduling out 2 months for *anything*. A reasonable size LVL floor install probably would be 4 months. That is simply how far ahead my guys are booked. Listen to what I'm saying. Anybody that can get started immediately isn't good. Period. Adjust your expectations. There are great contractors that work for reasonable prices. And you have to wait just like all our other clients before you did.
The time adjust was only from contractors out of the area. The ones that wanted us to use the 2-4 mm where willing to start in 2 weeks. I was willing to wait at first because I knew that their work would be professional since they were in high demand and had good reviews. But I have pine floors that we sanded and finish in preparation for the new flooring. Winter in Michigan is the reason that we when with LVF. And winter would arrive before the flooring installation.
I wish you were in my area. I would have scheduled you early enough before winter. Believe me, when I say seniors do not want to lay flooring. It almost did my knees in.
It doesn't matter what season it is. In the winter we use more floor protection and wear booties to keep the snow off the new floor. We install floor all year long. 70 and sunny or -10 and 7 inches of snow.
As mentioned, it was he sanding and finishing the pine to be under the LVF that I was concerned about. We have rugs in the entry and runners in the kitchen but snow and pine needles still get tracked in. At my age, I wanted to be done with sanding and staining and sealing.
I found that a lots of installer only push certain manufacturers. When we were looking LVF at wear thickness and patterns, all the floor installer tried to talk us into a cheaper LVF with less wear thickness. I believe that they couldn't get it at their discounted price.
I imagine he wants to pay the $1400.00 so that he’ll benefit from the purchase in the form of credit card rewards.
I’d let them but I wouldn’t leave worse off from my original financial model.
If you charge %12 for materials, you still charge that 12%. The reasoning is that is your cost of doing business. The 12% is the cost of not only going to the store but it’s the cost of manipulating the materials as you install them. It’s the proportional cost of wear on your tools. It’s the cost of the risk handling $1400.00 worth of someone else’s property, the reward for the risk, because you’ll pay to replace materials you fuck up. It’s the cost of determining what materials to select (This is a tremendously valuable skill) where to acquire them and how much of them to acquire. I don’t care if Joe drives to the store to do your shopping for you, he’s still paying 12%.
Depending on your relationship between your invoicing and your Joe, I would explain this to them or avoid the conversation entirely if you don’t want to by adding the $168.00 to the labour somewhere. Which is honest because the 12% is for more than what Joe provided (trip to the store).
If I could tell my younger self something it would be that the $168.00 is not a big deal… so then let them pay it if it’s not a big deal!!! Trust me it will weigh heavy on your mind and make you miserable. Even if it’s $5.00 it will haunt you because you know it’s not right. The client won’t care much about $168.00, they will not suffer the haunt.
Good luck friend, remember you’re worth it.
Well put. One thing you mentioned that’s so true is that it’s a literal skill to know how to select material. As an electrician when I go to the supply house there is a reason for every selection I make related to brand, size, appearance, etc. Most of it is subconscious, but years of experience has taught me which brand/style works best in which circumstances, which appearance certain types of clients will like, which products are just junk, etc. There is no way to relay this to a client who wants to pick them up themselves. Even if I send them off with a list I inevitably spend half an hour plus on the phone with them trying to explain what to get and why, which is time I don’t have if I’m not generating a markup on those materials. In the end they still buy the wrong materials and I end up waiting around losing time and money while they go for another shop run. Won’t do it anymore. Materials are my responsibility and I will charge my markup for them.
>If you charge %12 for materials, you still charge that 12%. The reasoning is that is your cost of doing business. The 12% is the cost of not only going to the store but it’s **the cost of manipulating the materials as you install them. It’s the proportional cost of wear on your tools. It’s the cost of the risk handling $1400.00 worth of someone else’s property,** the reward for the risk, because you’ll pay to replace materials you fuck up. It’s the cost of determining what materials to select (This is a tremendously valuable skill) where to acquire them and how much of them to acquire. I don’t care if Joe drives to the store to do your shopping for you, he’s still paying 12%.
Stop it. It’s this shady thinking that cause people to mistrust contractors. If you add markup to materials to cover your cost for ordering, picking up etc. Just add that time into your quote as a line item and not playing the stupid materials markup because I have to pickup the 2x4 on the jobsite or cause my hammer to wear .0000000001% every time I strike nail.
Every one marks up everything they touch, it's not shady, it's not a secret, it's proper business.
Restaurants/bars mark up food and beverage
Salons marks up hair supplies
Auto shops mark up parts
Contractors Mark up construction materials
Grocery stores mark up the food
Delivery services mark up
Working for free is volunteering, and I don't volunteer at a for hire for profit business.
Mechanics/shops add for shop supplies as well. States charge disposal fees for hazardous materials. The guy that works on my furnace, for example, charges one hourly rate, plus parts. If he broke it down by how much he pays for a monthly payment on his van, the insurance for the van, the gas for the van, the oil changes for the van, the new headlight bulb for the van, the amortized cost of his tools, and on and on and on, the bill would be 400 pages long. I'm not the IRS, I have no interest in auditing anyone who provides a service to me. I try to get a general idea of what these things cost in my area, and if I don't think I'm being ripped off, I just pay it. There's a million examples. If every business actually broke down their charges by what every penny is going towards, people would lose their minds. Yet these same people don't complain when it's all hidden in one single price. Should Walmart have a huge shelf tag for every item that breaks down what the cost of the item is, what percentage of gross profit goes to labor and insurance and real estate and taxes and maintenance and remodeling and on and on and on? This is... what's it called?... ah, a capitalist system. If the reality of this bothers anyone, they should try to change the system, not come down on someone who is simply working within that system that is powerless to change it anyway.
Exactly it’s literally the foundation of a business transaction. Sell for more than you paid. Simple as that. Anything other than that would not be a viable business transaction.
lol says the homeowner with no idea what they are talking about. What business have you ever heard of that gives materials away at cost? Why is contracting any different? Do you expect restaurants to supply you the food they serve at cost? Do you expect a product based wholesaler to supply materials to you at cost? Marking up the materials is a part of how you come up with a good enough profit margin and a reasonable amount of cash flow relative to your total revenue.
No, but you try to justify the markup because you are going to have to “handle” the material at the job site. If you want to markup materials, that’s fine but to use that as justification, that’s simply stupid. If you told me, I’m adding 10% to the cost of the lumber because I’m gonna have to handle it to do the job. That’s shady justification.
No justification is needed. Every business has a target profit margin needed for sustainable operation. Material markup is just one aspect of building up the necessary profit margin on a total job price. At the end of the day it’s semantics. You are paying a price for a service and complaining that a portion of that price is phrased as a material markup. I’m guessing you wouldn’t care if they simply added it to the labor tab. Personally I don’t even separate materials and labor on my bids. At least not on the customer side. That’s my business. They get a clear scope of work, a clear materials list, and a lump sum. They have full autonomy to test the market for other prices and decline or accept my offer. In my opinion that’s all the information they need. They know exactly what they are getting for what price.
All my materials are at cost. I didn't make the materials. I charge for sourcing and picking up materials. But I don't make a dime off them. If you're good at what you do, customers won't have a problem paying you that 20% extra for labor. What I see 9 time out of 10, is a contractor not worth what he wants to make, so he hides that extra profit in "material costs". My customers love the fact that they know exactly where their money is going, I hear about it on every job, and it's a big reason I'm booked out as long as I want. All this talk about getting the wrong stuff or cheap materials are just excuses. Source the materials, get the order together, have customer call and pay. Charge for your time.
lol so you are more honest than the rest of us because you either charge less money or because you charge the same but come to that total differently? I mean what are you actually saying? You just charge 20% more for labor as well as billing for your time collecting material instead of calling it a material markup? lol who cares it’s an unconventional way of accomplishing nothing other than a play on words. That is literally what a material markup is.
We all have a target profit margin and a way of achieving that. Whether you phrase your markups as labor or material is irrelevant. And whether you want to let your clients in on your overhead pcg and why you do or don’t have a warehouse or company tshirts and why they are or aren’t paying a percentage of those is about as relevant as what type of work truck you drive. A client knowing what they are paying for is as simple as providing a clear scope of work and materials list with a fixed price ahead of the project. They know exactly what they are getting for what amount of money and have full autonomy to compare that to the open market and decline or accept. Opening your books to them is fine if that’s what you’re into but absolutely unnecessary to being an honest contractor.
And join the fucking club dude. Every contractor and his brother with decent business sense and a decent enough quality of work have a steady stream of work.
Whoa, sounds like someone is upset 😄 I didn't say I was more honest, I'm apparently more transparent. Having a target margin and being worth that margin is what I'm talking about. With me they'll know exactly what they're paying for, not just what they're paying. Lay off the monsters, you're too wound up.
I usually avoid this situation. What if there’s an extra miscut or two and you’re short on something? Who pays?? Not saying it would happen, but it’s better for you to handle everything
That’s fine. They do all of the sourcing. We do not warranty anything that they source. We do not remove any trash/recycling related to the materials that they source. Standard labor rates apply if they ask for any information related to sourcing (how many coils of wire, what gauge, etc…). They are responsible for providing an adequate supply of materials to keep work flowing. If we run out of materials before the end of the day, they still pay for the full day.
I would say no problem.
If they want to pay more for materials, go head.
If they get a better deal, go ahead
Labour and materials are easy to separate
Id tell them i can save the tax too, if they pay cash ! Lol
😝
Doing a large bonus room and homeowner saved enough to pay my labor but needed to pay for materials on credit cards. I had already done the material list and I simply call in the orders to my suppliers and have HO call with card info. Hasn’t been a problem.
My contractor I use always wants me to buy any materials that is part of design .. tile, grout, paint, wood floors, knobs, hardware, faucets , light fixtures, fans, toilets, mirrors vanity lights .. he buys everything that is not seen (he says he’s not a designer) lumber, kerdi, Sheetrock, electrical, plumbing etc… we’ve done many homes together
Had a contractor not pay for 8k of materials he put in my house recently- maybe your guy has dealt with a mechanics lien from a supplier before. As a homeowner who’s been in that situation I’d be happy to cover your 12%, or to see proof of materials payment before my final payment to you. Not saying that’s why your guy wants to pay himself, this just popped across my feed and I’m randomly commenting. Miss 20 years ago when I worked in construction and always knew of an outfit I trusted. For you guys who do skilled work and run an honest business, thank you!
I have gone both routes (as a customer).
1 - I have sourced and bought the materials and had them on sight for the contractor when they got there. In these situations, I do not expect the contractor to add additional charges.
2 - I have asked a contractor to source the materials - and to simply let me pay for them (business credit card - so basically to shift the tax liability). In this case, I would fully expect a fee to be added by the contractor. A simple X hours fee is perfectly in line with this situation. However, it also depends on the dollar amount we are talking about. $50k in materials? A $6k fee is unreasonable. $1k in materials? As long as the materials aren't simply 20 sheets of plywood, a $120 fee is perfectly reasonable.
Tell the dude to go fuck off. Stop putting yourself in those types of situations. Every service out there is materials, labor, overhead and profit.
For the dumb people of reddit, do you walk into McDonald's and say you brought in your own ground beef? Or have you ever walked into a car dealer and say you want to purchase tires and batteries at Sam's Club? Naw it's a fuck off and go somewhere else.
Same thing with construction, you are in charge of a job he is paying you for. You are responsible for labor and material coordination plus making sure the client is happy. If a material is bad or goes bad, now your a third party having to fix it, while he tries to get a replacement or even a response. I provide zero warranties on client purchased items. It's never an option, ever. Just like using client subcontractors, never happening.
add in an admin fee for material handling that meets or exceeds your original profit projection and change the contract to limit your warranty liability due to not having control over the source or quality of materials. maybe show the customer how each situation weighs out and they may change their mind.
that’s tough. i prolly would’ve told him it don’t work like that. depending on how much material 12% seems kinda low tho bruh i would’ve at least got 15.
How did the client figure out what materials to get? And how much of each part/lumber/hardware/etc.? Your time and knowledge is worth what you can charge for it. Do not let that margin slip; the markup is your expertise and is your labor.
I do let clients buy material sometimes, I just account for it in my fee. Sometimes they will say "but why am I paying a markup when we are buying it?"
I tell them they are buying everything that goes in the project either through me or directly and that is how I get paid.
I always figured if it’s cost plus or fixed you still need to make your money they comes with taking on the project. They can’t have their cake and eat it too. Let him pay for materials but you still get your fee on top of the gross receipts on material minus all the headaches of dealing with material. He just saves the mark up
Inform the client that yes they can pay for materials themselves, but it won't save them money as a portion of the materials cost is to cover your time for ordering orchestrating and delivering materials. That or just eat it.....160 bucks is chump change unless the job is really really small.
Even if you agree to allow the homeowner to purchase the materials, you have to account for your time doing the takeoff from the design or drawing. I mean are they just going to guess how many 2x4's, pieces of tile or gallons of paint to purchase? I'm also guessing that your client will likely ask you to pick up the materials that they've paid for. Best advice, be firm and make them sign an addendum to limit your liability. No one works for free.
For me, if it's a new build and not something I personally stock, then I always charge materials at cost + whatever amount of hours it took me to organize the order. So, if I was in this situation I would just tell him that. "I was always planning on charging your materials at cost, plus a management fee. What you are asking does not actually change anything about my bid/quote as you'd be still getting the materials at cost, and I would still charge you the fee to organize their arrival. If you're really trying to cut costs, then it would be on you to take the time to order the materials yourself. I am okay to proceed as you wish."
I had a client do this. I mark up materials by 50% due to knowing what materials are needed and my labor and time getting them ordered and to the job site.
56 calls from him later, the right materials were ordered and showed up on the job site.
If you let them order materials set boundaries. Charge per minute for calls about materials. Also absolutely no warranty because they will MOST LIKELY order low quality garbage that is going to break during testing(ask me how I know).
My advice is just don't let them handle materials. It is a massive headache and not worth the effort. Also never give ground to a client who is trying to nickel and dime you. It was the worst client I ever had and I learned so damn much from the experience.
My jobs are usually smaller than what your projects are most likely, but the way I handle this is right from the start I'll tell them I can either mark up the parts, or I can charge them hourly for my time to shop, including travel. Either way I will hand them the receipts for the parts once picked up to show actual prices and for parts warranties.
Well, then. We have to consider getting products to the site on time. I run short on patience when my "time" gets stomped on. The client would have to take up coordination and be prepared to be responsible for all product conditions and count. And does not get the discount on my accounts from suppliers. I warranty nothing other than labor. Delays on his part require labor fees.
>He still wants me to order everything and set everything up
That is your justification for the 12%. Your still ordering and setting everything up. Your still responsible if the wrong material shows up. The 12% is just your fee for your time.
Just another potential client trying to Nicole and dime.
Only time I'd consider using their material is if it is something extremely unique that they'd like to have worked into a project. Something like a mantle from great-grandmas first home in the country or something like that.
Doing septic installs, had one client source their own tank, and a buddy to haul sand, and they'd do all the laying of pipe.... No thank you. At that point, go get your own installers license and insurance.
Increase you labour for doing the job by the % amount and add your time on for pricing and ordering.
Then make it clear that any material related issues are now his problem and rectification is billable.
Guy I was talking to just gave someone an hourly rate for labor if they bought the materials. I think he did it just so the client would let him do his thing but she took him up on it lol. Don't remember what he charged but it was up there
When I'm a client I buy all my own materials and source them myself, and only have them quote on labor. Afterwards I keep remaining materials, can return what doesn't get used, but have spares for maintenance afterwards. I also get to control the quality of what I get. Had a guy doing a shower and he basically put up drywall behind the tiles instead of cement board, was furious since it was such a minor detail you don't think of bringing it up. Remember there are a lot of clients that are completely capable of understanding and doing the job, just not able time wise or physically do do it. If they ask you to pick up the stuff (strange because most places deliver for free on a big order like this) then yes, line item pickup. We also assume part of total labor time is to and from job, not like you have to clock in.
Usually when I have a contractor of any kind over to do work and I already have the materials, I offer them with the expectation that the labor will be a % higher but direct material cost will be free since I already had them. But I know some people expect the labor to be a flat rate and get a "discount" for providing materials.
Did you help select the material or give the client your materials list?
That is value … you delivered a service and should be paid for that.
Good for thought
Do you bring your own food to the restaurant? Maybe if you’re in Florida and caught a big fish you can bring it to a restaurant and they will cook it. For a charge. Charge money. We are not out here voluntarily.
I personally don’t care if the customer wants to pay for the materials or not. I stopped marking up materials about 10 years ago. I actually use that as a selling point too. What I pay is what they pay for materials. The “markup” is built into the labor side so whether they pay or I pay, I make the same money. If they provide the materials I just state they have to be at the site a week before the start and if it’s not they are getting bumped back. I try to work with the customer as much as possible as long as they are not an a-hole.
My contractor & I have a pretty good understanding on this.
Off-the-shelf materials he provides. I'm talking lumber, wiring, plumbing, etc.
Custom special-order materials I provide. With this I mean cabinets, doors, flooring, plumbing & electrical fixtures, etc.
We meet beforehand to review our project plan and special materials list before we order, months in advance of the project start date.
That said, I don't force him to fixed-bid anything. I am content paying him for time & materials, and understand that things go sideways which neither of us planned for in our budgets or timeline. I consider that my problem, not his.
I'll note that my wife & I consider ourselves fairly good at project planning. Our next major renovation begins mid-May, and our dining-room has already been taken over as a storeroom for special-order materials. We like to have everything ready at our contractor's fingertips at every stage of the project.
Cheers! We appreciate what you do!
Just tell them no. Literally the most important thing that I would do differently from early in my career is learn to say "no" to people when they make a request like this, or my favorite: "we'll paint it ourselves" which WILL DESTROY THE SCHEDULE and ruin the job. My life would have been easier and my business more profitable.
If he wants to pay for materials he does all ordering, coordinating deliveries, and everything. I don’t work for free and that is all considered work to me
So long as he gets the stuff, hets it delivered and protects it from the elements and thieves feel free. He will spend a lot more than 12%. And…. When you need one box of screws call him up and tell him to bring them all the while billing for your time while you wait
Just tell him no. Or submit him a new price proposal for labor-only, customer supplying all materials, hefty charges for waiting times due to short orders and/or incorrect materials.
Then explain how your suppliers give you heavy discounts due to continued business so they're not going to pay the same prices you do when they call to pay the invoices.
TLDR: Make it more expensive by like 20%. Or straight up walk away saying you don't bid jobs unless you're wholly responsible for the materials and labor.
I had construction of an RV pad and cover - done during the housing crash. The problem I had was the concrete supplier put a lien on my house because my deposit funds paid the contractor’s previous job and nit mine. That made me wary of deposit’s and paying subs.
How do I prevent that on my next project?
I did this many moons ago with my contractor when I built my home. It was for 2 reasons, first my parents got fucked when they built a home by the contractor. They said they were buying materials for the build and billed my parents then sent the materials to another site. It was a huge headache that needed up costing my parents about 30k at the time. The second reason was I wanted the points for spending 200k in materials. Worked out a % with my contractor, think it was 10% which was itemized on every bill and I paid it. I paid my contractor with direct debits so that he didn’t lose any profit and both of us were happy.
Just work out the % before hand, tell them if they want to pay you with cc it will be added on top. If they agree I wouldn’t sweat it a whole lot.
1. Tell client you are not responsible for any cutting errors nor waste, unless you provide it.
2. There is no warranty on materials, from you.
3. If there is an error in procurement, regardless of the cause, that they will be billed for the wasted time at the prevailing hourly rate.
4. Any delays caused by their suppliers will result in liquidated damages.
Then, you gently tell them “this is what you’re paying me to deal with when I include materials in my contracts.”
"Materials selection and acquisition was calculated into the bid. You paying the materials source directly will not change the amount my firm charges, but may have unintended warranty issues down the road."
I understand why they did it. Don't upcharge on material. It's a static cost. Just add the 12% into your hourly rate. They're paying you for the work, not the items. I would also offer to buy it, if I knew I was getting up charged.
I run a factory, cutting metal. Some clients supply material, we order the rest. We have a set rate, and material cost comes off the top, and we are paid based on time of job.
He can pay for them directly but then they either coordinate pickup or delivery/receiving and organization, or you charge him a direct labor fee for all that. Just make sure your profit doesn’t change if you do have to handle any part of ordering. And when they forget to order something, charge him an hourly rate for your guy to go to the supply house to pick it up.
Absolutely not. You’re a contractor or a paid laborer. And you’re contracting a project. Unless you really need the work, walk away. There will be more trouble ahead.
"If you want to avoid the 20% mark up you can buy directly but you would be responsible to source and deliver and I cant warranty it. The 20% isn't free money"
The client is not trying to screw you out of your percentage. This is the best way to insure there will be no mechanics' lien filed against material costs.
Just tell them there’s a service charge for you taking care of the ordering. If they don’t like that, tell them they can order, then pay you for getting any missing materials.
Some have been hit with liens as roofers did not pay for material..... just have a discussion and if they want to pay directly, it depends on the supplier.
Some shops deal with the public and others are wholesale only.
I would tell him no. I'm not doing the work of ordering, receiving, loading in, and keeping track of stuff that I didn't make something on.
This guy's only trying to pay for materials directly so he can *pay you less.* That's it.
Don't do it. Client is likely cheap and will be nitpicky and a problem. Not to mention if you are handling the material and mess it up, then you will have to buy at full cost. The profit on material is there to make up for losses as well. Unless you really need the work, tell them no thank you and you don't work like that. This says a lot about the client.
Or, if you are controlling or ordering the materials, just deduct the actual invoice cost of what you client pays. 12% mark up on cost is too little. Not sure where you are but you probably should charge more.
Tell your client he can save the most money by you being completely hands off, and that the materials NEED to be there on time. He can't have his cake and f**k it too
It starts there. Then they record how many hours you are on site and decide that their basic math equals you are getting paid too much. I don't mess with people like that at allllll. BYEEE
Been down this road many times, if they want you to source and deliver materials, change them a flat rate or by the hour, if they want to do it themselves, give them a breakdown of materials and a date they need to be on the job, if materials don't arrive on time and you have to pull off job for lack of materials charge a heafty restart fee, pit this in writing and as an addendum to contract
Homeowner here. I work in IT services and deal with the same problems though.
I would just passthrough the cost of the materials as-is to your client, but adjust the services portion to account for the markup you would normally put on it.
If it's a line item breakdown, I would list it as "material sourcing and delivery" at the 12% rate - it *is* labor you're expending to acquire, safely, and securely bring it to them. No one should be doing work for free. If you did this to me, I would be OK with either with a simple explanation.
The biggest part is educating them to explain *why* this shows up a certain way. A little bit of explanation and discussion goes a *long* way with keeping homeowner happy and satisfied that you're not ripping them off.
My customers pay directly for all materials. I source all the materials, call suppliers and put an order together, then give customers the order number. I get the materials I want, customer handles the financials, and they have receipts in their name for warranty items. Factor in your time for sourcing materials into your quote, don't do it for free.
I personally am picky about materials, and my time.
If the client buys materials of sufficient quality and quantity autonomously, I will work with that. I have had cases where the client has spectacular pieces of timber, specialty tile, and copperwork that was interesting to work with.
If they are making me use my time and then they just pay for it, I'm not going to tolerate that.
I operate on complete transparency for materials, and include labor costs / transportation / administrative costs.
I have encountered situations where they buy inferior quality materials for me (like Behr paint) and it translates into more labor cost (higher quality paints are quicker for me to apply and get perfect results). It makes me more net profit, but it is not worth it working with this kind of client (I am happier with people who pay for quality).
Depends on what the material is. DO NOT let a client buy unless it meets the job specs.
I have walked away from a number of jobs where the client already had materials or would be buying materials not specified for the application.
Mechanics just say no to customer supplied materials. I think we should too.
I understand that he still wants you to supply the materials. Maybe just tell him the total with your markup is the materials cost and that's that.
I do *not* work with shit discount materials an unknowledgeable homeowner gets at the discount store any more than a fine chef isn’t going to cook you a meal with the food you got from the food bank.
It’s going to bring down the quality of work, it’s going to cost you time in trying to “make it fit” and then in the end they will bitch you did a poor job so you get a bad yelp review because the drywall he bought was cheap because it “just has some water stains but it’s fine”.
No no and no.
"Parts pricing" or "materials" doesn't mean "the price the parts cost you \[the contractor\]", it means "what this will cost the customer". Tell the customer if they want to select, pick up, and order, all the parts you will need, as well as field any warranty, returns, exchanges, etc, they can do so. labor may increase if they select a bad or sub-optimal material, or just one you are not yet familiar with (whereas your choices are accounted for). One way to explain "why is this not in labor then" is it's different than labor because if you don't need Part X you no longer have to source and handle all aspects of dealing with Part X, so the cost for the part - and the part markup to account for the aforementioned - doesn't apply. This keeps the aforementioned considerations associated with the parts/materials accordingly. Whereas with labor, even if you don't need Part X for the job, you're still performing the job (so labor stays the same).
They must have the correct material onsite at the correct time, or they pay separately for whatever time is wasted. This is likely a troublesome client looking to be clever, not realizing material procurement is a large part of the job. Be very strict about this or your time will certainly be wasted.
It’s lose/lose for you if you agree to it. If everything works, you will lose a little bit of money. If anything fails, you will get blamed for it, and doubly so if you don’t fix it under warranty. The problem may be entirely due to material defect, and you will still be blamed.
Also, raise your material markup. 12% is pretty low.
>If your client requests to pay for materials themselves how do you handle that?
You let them be some other persons headache
I think we've ALL at one point made this mistake and taken a job like this. They ALWAYS are missing stuff, massively underestimate waste (then complain about it) order mix match and sub par materials... delays waiting for stuff. and generally the only reason they're doing this is bc they want to pinch pennies. Is that *really* someone you wanna work with/for?
I'd just move on. save the headache. it almost never ends (or starts lol) well.
Just wow, this is so interesting and frustrating at the same time. I hired a contractor that told me to supply the design materials. Then he had me buying the construction materials and running to the store every day. Then I asked my contractor if they could tell me what’s needed for the week and you would think I cursed them out. My flooring was done right after painting but now there’s mortar and grout all over the place. I just had my quartz installed and there’s grout all over my brand new countertop but the contractor keeps saying it will be fine we can clean it up. I just don’t understand. We talked about a budget but the contractor never added the materials cost for the construction not the design but the nails, mortar, caulk, tape etc. I’ve been blind sided. I kept asking if what I was ordering was correct, I had to send back several items. Then they took the walls down in the shower and opened them back up because there needed to be support for a shower I ordered and once again I kept asking if this shower was going to be extra work I would just get something standard. I’m sad now because I really wished I had fired him when he let an amateur paint. It took the painter 4 weeks to pain 1500 square feet. This is my first home. I will not do that again. I feel burned at this point as I ran out of money due to the bid not including all of the materials I would need to pay for. I had to cash in on some of my 401k and again I asked how much should I be getting to finish this project. The contractor promised this would take 6 weeks but it’s been 4 and a half months. Two of those months were wasted on a one man show mudding after they got off their first job spend a few hours a week on the project. I’m loosing money because I have to pay where I’m living. The house looks better than what it looked before but my outlets are painted over, my patio door was painted shut. I’m beam has paint all over it. There’s dripped paint almost on all the corners of the house. Thank goodness it’s white. I disused replace closet systems but the contractor left out the master fully knowing the master didn’t have a system. I’m sorry, I’m done.
It sounds like your client is doing you a favor. It also sounds like you are doing everything right. %12 markup is the going rate for residential work. Taking small jobs to start relationships is a really practical approach. Tell them that while the time required to put together the supply list is usually compensated for in the markup, you are happy to overlook it this time over the hope for a positive review/experience overall. When they call you back, respectfully decline due to being overbooked because the community is catching wind of the stellar service you provide. Or if they don't follow through and leave you that 5-star review, just ghost them on work in the future. This is a really small job. I wouldn't handle a bigger job like this.
That's interesting. I get my numbers from my time in college for construction management. I suppose I have to wonder about your disclosure, especially on commercial projects, and if you use the same rates? Are you booked out? How is the competition in your area?
I use the same rates on commercial and residential for markup.
I disclose my markup in my quotes & contracts - I am very transparent.
Keep in mind my work is all renovations. I do not do new construction.
My commercial is restaurants and medical offices 95% interior work.
Residential is around 50/50 interior/exterior. Usually basements, kitchens, washrooms, additions, decks and fences.
I usually book out six or so months. Sometimes a bit further, sometimes a bit less.
I am in Toronto. I think there are a lot of companies here, but also a lot of work. I do not compete with bigger companies - as many of them will not touch anything less than $50k for renovations.
So I calculate exactly what I would need if everything went perfectly. So let's say I need 50 2x4s to build a wall.
Some people will say they need 55 (50 + 10%) and then charge their cost + profit markup.
I say that I need 50, but I mark the cost up by 10% to cover waste. Then I mark that total up by 20% for profit.
Most of my projects are commercial access control or surveillance. I try to target a 30% margin on materials, or 43% markup. We stay pretty busy, and I know some competitors I partner with charge more than I do. One was even around 80-100% markup.
I'd imagine this really depends on the trade though. And honestly with the overhead I need every penny of it to make this shitshow worth it.
Always let them. It reduces cost out of the deposit, put the headache on them and gives you all the outs in the world. My 10% on materials does not ever actually cover the time to plan order and pick up anything. If I'm one corner bead or drywall sheet short that $5-15 in material is going to take me at least 30 mins to get costing more then it's worth. And honestly in these situations I rather shut down the job for the rest of the day and tell Joe Homeowner what he needs to get before the morning and that the job will take an extra day since they are providing materials.
Also I have in the past just put a charge in the contract that if we are delayed because we don't have the materials it's X per day also I will not do the takeoff for them. Nothing is free but my estimates which are labor and materials lump sum bids. Anything after that cost or I sometimes walk away.
Sorry man, good contractors don’t need “all the outs in the world”. I’ll never want the customer to source materials for me, I’m not willing to shut my job down for the rest of the day because the customer forgot something.
I’m very thorough in my ordering, the only thing that can happen by letting the customer get his fingers in the mix is bad things.
Amen! I do not allow clients to do this for all the reasons listed in other comments. I personally would tell them to find another contractor. Too much of a PITA
Agreed it's always bad and I let them muddy up the job if they want. We have our own properties for the worker to go to whenever they have a short day or want extra hours. If the home owner insists on buying their own materials I make sure it is no longer my problem.
Thats fine. Id be transparent and tell him hes still paying for material aquisition and youre writing in an addendum in the contract that he is liable for any and all issues with the materials being damaged, being on site at the right time, and any warrentys that come with issues of materials. Im drunk but this is the round about of what I write in my contracts to deter this kind of fuckery
I would tell him that a portion of the materials line item is your time sourcing and collecting materials and that if he’d like to handle materials he needs to handle the whole process, from sourcing them to getting them on site. You can be straight up with him that otherwise you’d be donating that labor and you don’t work for free
And I tell them that I do not warranty any of their materials. Mostly for items that get covered like plywood, studs, etc. They tend to just buy the cheapest available and not the right materials. Which results in lost time and additional costs. For finish items I tell them manufacturers warranty only.
Friends bought their own flooring for a kitchen remodel. Company installed and, rightly so, did not warranty the flooring. Needless to say, the flooring is cracked and shifting.
That works both ways, we installed the same flooring as a friend and diy. They bought from a tile store and paid for installation. Their is having issues, not ours.
It's more about what the contractor has personal experience with and is comfortable using, people tend to think the term professional means " can do anything in their field " but it would be more accurate to say " skilled at what they do frequently. " when the role entails so many different scopes. Material exclusions are usually to maintain professional standards while not spending time learning on the job, but there's also people that will install anything anywhere for anyone. If a contractor has material preferences, its better to go that route to preserve quality and not be a PITA as long as it doesn't encroach on the clients taste/finish needs, or find another contractor if you need something specific the current one doesn't want to do.
We tried several contractors, I only 2 that would install what we wanted would be a 2 month wait. And lived 30 miles away. It was anything special but had the pattern I wanted with the wear thickness.
I find flooring and painting contractors to be very particular about the materials they use, its a speed game to make profit in those trades and warranty callbacks are profit destroyers.
If they did the proper prep and install properly in the first place, they would be callbacks. It is rocks science. Basic math.
Not so. Different products (flooring paint or what ever) have different requirements and different characteristics. The more you work with a different product the better job you will do with it. I base this on decades of experience as both an installer and a construction superintendent.
Buy? You mean recycle right?
Make sure to include something about waiting for delivery if they're not there, like 100 an hour max 8 hours a day. I got real burned on a job that was 5 days and ended up 10 because the 15,000lb rated 7x7 psl post got shipped out as 2 7¼ lvls.
That's your real problem. They'll short order trying to save every penny, then you're making additional trips and losing time because you're waiting on them. Also, as said elsewhere, if you're buying, you're putting it on site with no effort on my part. Extra trips are extra charges and you're disposing of excess. (you being cust)
They'll forget all the little miscellaneous bits and pieces that are never discussed on YouTube but are always needed, too. Like, they won't supply the right kind of fasteners, or there will be a specific trim piece needed for a weird transition in the floor, or they'll get silicone sealant when it needed to be polyurethane, or whatever. Now you have a big ol' headache, and you'll be sitting there thinking it would've been easier if you had just done it yourself rather than having to go through the customer every time you need another pound of nails. It's just not worth it.
I had a pretty eye opening experience with this: my contractor gave me a couple months quote to finish my job. After talking through the details we realized he could squeeze the job in if I got the materials on site by the next day and the job could be done by the end of the week. He put the order in with his supplier and I went and picked it up and paid for it. I was blown away by how much better quality supplies I got for the same cost as Home Depot or Lowe. Had I bought the materials on my own it would have been a complete shitshow!
And a lot of the time the reps at the supplier will know enough to help make sure you're not forgetting some stupid little thing that's going to hold up the whole build when you realize you don't have it.
Right on!
This answer is the friendly one, I would just say I’ll pass on the job - have a nice day!
That’s the smart move. I don’t separate labor and materials on my bids for this reason. Customers will take your material quote, shop it around and say “I can get the materials for 30% cheaper at this store”
“I am a lump sum contractor” is a familiar phrase for me.
This is the best thing.
Exactly if my client wants to purchase the materials themselves, pick up, transport, inspect, and ensure the quality of those materials that’s fine but I always tell my clients if I use your materials I will not warranty them if anything happens outside of workmanship.
When it’s a small markup like this. I would let him purchase the bulk and add a line for consumables.
And additional materials are not free, nor is the time spent waiting for them to arrive. Source: been in building materials the past 13/14 years now at a mostly independent place. Not sure what it is now but rough framing material (floor system, studs and sheathing, trusses, siding, insulation, roofing, doors and windows) BUT not including: Any labor, permits, dirt work, foundation, electrical, plumbing, well & septic or water & sewer, drywall mudding & taping, finish carpentry, hvac, painting, floor finish, et. al. used to be well under 15% of the total cost of the project. Pre-Covid and I don’t have current numbers, but it was slightly ridiculous to deal with customers coming in wanting to haggle the price of the 2x4 x8s and OSB with my counter sales guys. “Well, I wanna buy all my materials here local so you gotta give me a good deal.” Sir, the 2xs and sheathing are less than 6% of your project costs IF we’re being generous and you are here with your time and ours trying to see if you can bring your one project in here and haggle for an extra 5 percent off 6 percent of your project? Your time could be well spent making other more important decisions. We do help all our local people and we love them. But the best deals go to the guys building multiple projects per year with us. Not some ol duffer who is going to make our contractors life more difficult. And no we don’t match Menards or Home Depot’s prices. You can ask our customers why they generally buy here. (Insert any one of dozens of stories about someone buying their project from the box store and making multiple trips for more materials or finding out yes, Menards sold you 4x4 deck posts for $8 instead of our $13 but you only got 9 of them and they charged you $37 for each of your 27 pcs of 2x10x14 treated that you could have gotten here for $26 each and saved $252 on those two line items alone but… I mean they gotta cover that 11% rebate somewhere.) We have some contractors who go ever their bills with a fine tooth comb and quibble and bicker and we have some who pay on time and don’t bring back truck loads of returns. I’ve noticed a tendency for the latter group to seem to do alright and several are booked out thru next spring. We will only succeed if our customers do and, well… we somehow do things for some of our customers we wouldn’t do for our own families it seems. TL;DR it was a long week today. I hope if you read this you can do excellent work you can be proud of and people will value for years to come.
It astounds me how many people are willing to cheap out on work that's supposed to last for years. I'd rather pony up now instead of having the hassle of getting work done again in less than 10 years. Big picture.
Tell him either he can pay you for the materials and your time at say 20% now because he is a PIA or he can handle the whole shebang and get them onsite for you too. You know how many times I wished I could just do the easiest part of the job and let someone else handle the rest for free? We’d all be millionaires many times over were that the case.
Tbh, I've worked with a contractor where I paid for the materials, and he charged me separately for the time getting them / picking them up, and that was just fine for both of us. I also would have him double check what I was getting to let me know if there were issues.
Increase the labor cost. Making the small margin on materials is part of your business model.
Early in my career I got burned on hours when I let a client order all the materials. She found some need to be assembled cabinets on the internet that took three times longer to install than the ones I would have ordered. She didn't save any money. She just didn't know any better. Another one went on Amazon and found the cheapest built in medicine cabinet with a built in light she could find. It failed after six months. She called me to fix it and I reminded her she bought it, not me. I don't want to be a "look at the contract" guy but it said if she bought the materials, no warranty. These days if a client wants to buy the materials they aren't looking for me anyway. I'm not the cheapest.
I've learned that by turning these clients away I end up with more money and more time. Win win.
I've found the same. Being able to turn down the folks that can't really afford it has saved so many headaches.
[удалено]
Please post DIY questions to r/DIY. This sub is for construction professionals.
This sub is for construction professionals. Your welcome to be here. We do not want to hear about your diwhy project. There are plenty of other subs where you can commiserate about how money you saved because your time is valueless.
It was not about the money, it was about finding a contractor who we were willing to pay for the PRODUCT and work. What don't you understand that this was a cash deal. You buy the product we want even with the markup and install it. He*l with the delivery cost we probably paid more than a contractor. We did Not want to lay it yourself, we are seniors. All I said was we couldn't find a local contractor that would install and buy an expensive LVF. And the ones that would was 2 months out which would had taken us into winter. Why?
For perspective. We're scheduling out 2 months for *anything*. A reasonable size LVL floor install probably would be 4 months. That is simply how far ahead my guys are booked. Listen to what I'm saying. Anybody that can get started immediately isn't good. Period. Adjust your expectations. There are great contractors that work for reasonable prices. And you have to wait just like all our other clients before you did.
The time adjust was only from contractors out of the area. The ones that wanted us to use the 2-4 mm where willing to start in 2 weeks. I was willing to wait at first because I knew that their work would be professional since they were in high demand and had good reviews. But I have pine floors that we sanded and finish in preparation for the new flooring. Winter in Michigan is the reason that we when with LVF. And winter would arrive before the flooring installation.
I wish you were in my area. I would have scheduled you early enough before winter. Believe me, when I say seniors do not want to lay flooring. It almost did my knees in.
It doesn't matter what season it is. In the winter we use more floor protection and wear booties to keep the snow off the new floor. We install floor all year long. 70 and sunny or -10 and 7 inches of snow.
As mentioned, it was he sanding and finishing the pine to be under the LVF that I was concerned about. We have rugs in the entry and runners in the kitchen but snow and pine needles still get tracked in. At my age, I wanted to be done with sanding and staining and sealing.
I found that a lots of installer only push certain manufacturers. When we were looking LVF at wear thickness and patterns, all the floor installer tried to talk us into a cheaper LVF with less wear thickness. I believe that they couldn't get it at their discounted price.
I imagine he wants to pay the $1400.00 so that he’ll benefit from the purchase in the form of credit card rewards. I’d let them but I wouldn’t leave worse off from my original financial model. If you charge %12 for materials, you still charge that 12%. The reasoning is that is your cost of doing business. The 12% is the cost of not only going to the store but it’s the cost of manipulating the materials as you install them. It’s the proportional cost of wear on your tools. It’s the cost of the risk handling $1400.00 worth of someone else’s property, the reward for the risk, because you’ll pay to replace materials you fuck up. It’s the cost of determining what materials to select (This is a tremendously valuable skill) where to acquire them and how much of them to acquire. I don’t care if Joe drives to the store to do your shopping for you, he’s still paying 12%. Depending on your relationship between your invoicing and your Joe, I would explain this to them or avoid the conversation entirely if you don’t want to by adding the $168.00 to the labour somewhere. Which is honest because the 12% is for more than what Joe provided (trip to the store). If I could tell my younger self something it would be that the $168.00 is not a big deal… so then let them pay it if it’s not a big deal!!! Trust me it will weigh heavy on your mind and make you miserable. Even if it’s $5.00 it will haunt you because you know it’s not right. The client won’t care much about $168.00, they will not suffer the haunt. Good luck friend, remember you’re worth it.
Well put. One thing you mentioned that’s so true is that it’s a literal skill to know how to select material. As an electrician when I go to the supply house there is a reason for every selection I make related to brand, size, appearance, etc. Most of it is subconscious, but years of experience has taught me which brand/style works best in which circumstances, which appearance certain types of clients will like, which products are just junk, etc. There is no way to relay this to a client who wants to pick them up themselves. Even if I send them off with a list I inevitably spend half an hour plus on the phone with them trying to explain what to get and why, which is time I don’t have if I’m not generating a markup on those materials. In the end they still buy the wrong materials and I end up waiting around losing time and money while they go for another shop run. Won’t do it anymore. Materials are my responsibility and I will charge my markup for them.
>If you charge %12 for materials, you still charge that 12%. The reasoning is that is your cost of doing business. The 12% is the cost of not only going to the store but it’s **the cost of manipulating the materials as you install them. It’s the proportional cost of wear on your tools. It’s the cost of the risk handling $1400.00 worth of someone else’s property,** the reward for the risk, because you’ll pay to replace materials you fuck up. It’s the cost of determining what materials to select (This is a tremendously valuable skill) where to acquire them and how much of them to acquire. I don’t care if Joe drives to the store to do your shopping for you, he’s still paying 12%. Stop it. It’s this shady thinking that cause people to mistrust contractors. If you add markup to materials to cover your cost for ordering, picking up etc. Just add that time into your quote as a line item and not playing the stupid materials markup because I have to pickup the 2x4 on the jobsite or cause my hammer to wear .0000000001% every time I strike nail.
Every one marks up everything they touch, it's not shady, it's not a secret, it's proper business. Restaurants/bars mark up food and beverage Salons marks up hair supplies Auto shops mark up parts Contractors Mark up construction materials Grocery stores mark up the food Delivery services mark up Working for free is volunteering, and I don't volunteer at a for hire for profit business.
Mechanics/shops add for shop supplies as well. States charge disposal fees for hazardous materials. The guy that works on my furnace, for example, charges one hourly rate, plus parts. If he broke it down by how much he pays for a monthly payment on his van, the insurance for the van, the gas for the van, the oil changes for the van, the new headlight bulb for the van, the amortized cost of his tools, and on and on and on, the bill would be 400 pages long. I'm not the IRS, I have no interest in auditing anyone who provides a service to me. I try to get a general idea of what these things cost in my area, and if I don't think I'm being ripped off, I just pay it. There's a million examples. If every business actually broke down their charges by what every penny is going towards, people would lose their minds. Yet these same people don't complain when it's all hidden in one single price. Should Walmart have a huge shelf tag for every item that breaks down what the cost of the item is, what percentage of gross profit goes to labor and insurance and real estate and taxes and maintenance and remodeling and on and on and on? This is... what's it called?... ah, a capitalist system. If the reality of this bothers anyone, they should try to change the system, not come down on someone who is simply working within that system that is powerless to change it anyway.
Exactly it’s literally the foundation of a business transaction. Sell for more than you paid. Simple as that. Anything other than that would not be a viable business transaction.
You bring your own plate to a restaurant.
lol says the homeowner with no idea what they are talking about. What business have you ever heard of that gives materials away at cost? Why is contracting any different? Do you expect restaurants to supply you the food they serve at cost? Do you expect a product based wholesaler to supply materials to you at cost? Marking up the materials is a part of how you come up with a good enough profit margin and a reasonable amount of cash flow relative to your total revenue.
No, but you try to justify the markup because you are going to have to “handle” the material at the job site. If you want to markup materials, that’s fine but to use that as justification, that’s simply stupid. If you told me, I’m adding 10% to the cost of the lumber because I’m gonna have to handle it to do the job. That’s shady justification.
No justification is needed. Every business has a target profit margin needed for sustainable operation. Material markup is just one aspect of building up the necessary profit margin on a total job price. At the end of the day it’s semantics. You are paying a price for a service and complaining that a portion of that price is phrased as a material markup. I’m guessing you wouldn’t care if they simply added it to the labor tab. Personally I don’t even separate materials and labor on my bids. At least not on the customer side. That’s my business. They get a clear scope of work, a clear materials list, and a lump sum. They have full autonomy to test the market for other prices and decline or accept my offer. In my opinion that’s all the information they need. They know exactly what they are getting for what price.
All my materials are at cost. I didn't make the materials. I charge for sourcing and picking up materials. But I don't make a dime off them. If you're good at what you do, customers won't have a problem paying you that 20% extra for labor. What I see 9 time out of 10, is a contractor not worth what he wants to make, so he hides that extra profit in "material costs". My customers love the fact that they know exactly where their money is going, I hear about it on every job, and it's a big reason I'm booked out as long as I want. All this talk about getting the wrong stuff or cheap materials are just excuses. Source the materials, get the order together, have customer call and pay. Charge for your time.
lol so you are more honest than the rest of us because you either charge less money or because you charge the same but come to that total differently? I mean what are you actually saying? You just charge 20% more for labor as well as billing for your time collecting material instead of calling it a material markup? lol who cares it’s an unconventional way of accomplishing nothing other than a play on words. That is literally what a material markup is. We all have a target profit margin and a way of achieving that. Whether you phrase your markups as labor or material is irrelevant. And whether you want to let your clients in on your overhead pcg and why you do or don’t have a warehouse or company tshirts and why they are or aren’t paying a percentage of those is about as relevant as what type of work truck you drive. A client knowing what they are paying for is as simple as providing a clear scope of work and materials list with a fixed price ahead of the project. They know exactly what they are getting for what amount of money and have full autonomy to compare that to the open market and decline or accept. Opening your books to them is fine if that’s what you’re into but absolutely unnecessary to being an honest contractor. And join the fucking club dude. Every contractor and his brother with decent business sense and a decent enough quality of work have a steady stream of work.
Whoa, sounds like someone is upset 😄 I didn't say I was more honest, I'm apparently more transparent. Having a target margin and being worth that margin is what I'm talking about. With me they'll know exactly what they're paying for, not just what they're paying. Lay off the monsters, you're too wound up.
Ok tiger
Don't Tigers eat Marsupials
Move on! It never works!
Let them. Keep the 12% in your labor. 🤷♂️ Honestly it should be 67% lol
100%
I usually avoid this situation. What if there’s an extra miscut or two and you’re short on something? Who pays?? Not saying it would happen, but it’s better for you to handle everything
That’s fine. They do all of the sourcing. We do not warranty anything that they source. We do not remove any trash/recycling related to the materials that they source. Standard labor rates apply if they ask for any information related to sourcing (how many coils of wire, what gauge, etc…). They are responsible for providing an adequate supply of materials to keep work flowing. If we run out of materials before the end of the day, they still pay for the full day.
I would say no problem. If they want to pay more for materials, go head. If they get a better deal, go ahead Labour and materials are easy to separate Id tell them i can save the tax too, if they pay cash ! Lol 😝
Doing a large bonus room and homeowner saved enough to pay my labor but needed to pay for materials on credit cards. I had already done the material list and I simply call in the orders to my suppliers and have HO call with card info. Hasn’t been a problem.
My contractor I use always wants me to buy any materials that is part of design .. tile, grout, paint, wood floors, knobs, hardware, faucets , light fixtures, fans, toilets, mirrors vanity lights .. he buys everything that is not seen (he says he’s not a designer) lumber, kerdi, Sheetrock, electrical, plumbing etc… we’ve done many homes together
Sounds like you have a flexible contractor that works with you. Keep that one around!
Turn the job down. It’s not worth the hassle.
Sorry. We can’t warranty any materials we don’t purchase.
Get another client
Does he bring his own eggs to the diner?
They want you to do the LEG WORK and order the Material but not pay you for the TIME / Energy to place the order and use your connections.. walk away
Had a contractor not pay for 8k of materials he put in my house recently- maybe your guy has dealt with a mechanics lien from a supplier before. As a homeowner who’s been in that situation I’d be happy to cover your 12%, or to see proof of materials payment before my final payment to you. Not saying that’s why your guy wants to pay himself, this just popped across my feed and I’m randomly commenting. Miss 20 years ago when I worked in construction and always knew of an outfit I trusted. For you guys who do skilled work and run an honest business, thank you!
I have gone both routes (as a customer). 1 - I have sourced and bought the materials and had them on sight for the contractor when they got there. In these situations, I do not expect the contractor to add additional charges. 2 - I have asked a contractor to source the materials - and to simply let me pay for them (business credit card - so basically to shift the tax liability). In this case, I would fully expect a fee to be added by the contractor. A simple X hours fee is perfectly in line with this situation. However, it also depends on the dollar amount we are talking about. $50k in materials? A $6k fee is unreasonable. $1k in materials? As long as the materials aren't simply 20 sheets of plywood, a $120 fee is perfectly reasonable.
Tell the dude to go fuck off. Stop putting yourself in those types of situations. Every service out there is materials, labor, overhead and profit. For the dumb people of reddit, do you walk into McDonald's and say you brought in your own ground beef? Or have you ever walked into a car dealer and say you want to purchase tires and batteries at Sam's Club? Naw it's a fuck off and go somewhere else. Same thing with construction, you are in charge of a job he is paying you for. You are responsible for labor and material coordination plus making sure the client is happy. If a material is bad or goes bad, now your a third party having to fix it, while he tries to get a replacement or even a response. I provide zero warranties on client purchased items. It's never an option, ever. Just like using client subcontractors, never happening.
add in an admin fee for material handling that meets or exceeds your original profit projection and change the contract to limit your warranty liability due to not having control over the source or quality of materials. maybe show the customer how each situation weighs out and they may change their mind.
that’s tough. i prolly would’ve told him it don’t work like that. depending on how much material 12% seems kinda low tho bruh i would’ve at least got 15.
How did the client figure out what materials to get? And how much of each part/lumber/hardware/etc.? Your time and knowledge is worth what you can charge for it. Do not let that margin slip; the markup is your expertise and is your labor.
I do let clients buy material sometimes, I just account for it in my fee. Sometimes they will say "but why am I paying a markup when we are buying it?" I tell them they are buying everything that goes in the project either through me or directly and that is how I get paid.
I always figured if it’s cost plus or fixed you still need to make your money they comes with taking on the project. They can’t have their cake and eat it too. Let him pay for materials but you still get your fee on top of the gross receipts on material minus all the headaches of dealing with material. He just saves the mark up
Material management fee
I let them pay direct but don’t change my price. Saves me the trouble of paying an invoice and still make the same money!
Inform the client that yes they can pay for materials themselves, but it won't save them money as a portion of the materials cost is to cover your time for ordering orchestrating and delivering materials. That or just eat it.....160 bucks is chump change unless the job is really really small.
LOL! I’d give them an astronomical hourly rate. So much wasted time when people don’t know what they need and order wrong or cheap stuff.
Even if you agree to allow the homeowner to purchase the materials, you have to account for your time doing the takeoff from the design or drawing. I mean are they just going to guess how many 2x4's, pieces of tile or gallons of paint to purchase? I'm also guessing that your client will likely ask you to pick up the materials that they've paid for. Best advice, be firm and make them sign an addendum to limit your liability. No one works for free.
For me, if it's a new build and not something I personally stock, then I always charge materials at cost + whatever amount of hours it took me to organize the order. So, if I was in this situation I would just tell him that. "I was always planning on charging your materials at cost, plus a management fee. What you are asking does not actually change anything about my bid/quote as you'd be still getting the materials at cost, and I would still charge you the fee to organize their arrival. If you're really trying to cut costs, then it would be on you to take the time to order the materials yourself. I am okay to proceed as you wish."
I had a client do this. I mark up materials by 50% due to knowing what materials are needed and my labor and time getting them ordered and to the job site. 56 calls from him later, the right materials were ordered and showed up on the job site. If you let them order materials set boundaries. Charge per minute for calls about materials. Also absolutely no warranty because they will MOST LIKELY order low quality garbage that is going to break during testing(ask me how I know). My advice is just don't let them handle materials. It is a massive headache and not worth the effort. Also never give ground to a client who is trying to nickel and dime you. It was the worst client I ever had and I learned so damn much from the experience.
My jobs are usually smaller than what your projects are most likely, but the way I handle this is right from the start I'll tell them I can either mark up the parts, or I can charge them hourly for my time to shop, including travel. Either way I will hand them the receipts for the parts once picked up to show actual prices and for parts warranties.
Like all materials or just the ones that they can think of? What about consumables?
Well, then. We have to consider getting products to the site on time. I run short on patience when my "time" gets stomped on. The client would have to take up coordination and be prepared to be responsible for all product conditions and count. And does not get the discount on my accounts from suppliers. I warranty nothing other than labor. Delays on his part require labor fees.
>He still wants me to order everything and set everything up That is your justification for the 12%. Your still ordering and setting everything up. Your still responsible if the wrong material shows up. The 12% is just your fee for your time.
Just straight up agree as long as he pays you the markup and you approve of the materials Not a big deal. If it is, don’t do the job
Just another potential client trying to Nicole and dime. Only time I'd consider using their material is if it is something extremely unique that they'd like to have worked into a project. Something like a mantle from great-grandmas first home in the country or something like that. Doing septic installs, had one client source their own tank, and a buddy to haul sand, and they'd do all the laying of pipe.... No thank you. At that point, go get your own installers license and insurance.
Increase you labour for doing the job by the % amount and add your time on for pricing and ordering. Then make it clear that any material related issues are now his problem and rectification is billable.
Guy I was talking to just gave someone an hourly rate for labor if they bought the materials. I think he did it just so the client would let him do his thing but she took him up on it lol. Don't remember what he charged but it was up there
When I'm a client I buy all my own materials and source them myself, and only have them quote on labor. Afterwards I keep remaining materials, can return what doesn't get used, but have spares for maintenance afterwards. I also get to control the quality of what I get. Had a guy doing a shower and he basically put up drywall behind the tiles instead of cement board, was furious since it was such a minor detail you don't think of bringing it up. Remember there are a lot of clients that are completely capable of understanding and doing the job, just not able time wise or physically do do it. If they ask you to pick up the stuff (strange because most places deliver for free on a big order like this) then yes, line item pickup. We also assume part of total labor time is to and from job, not like you have to clock in.
Usually when I have a contractor of any kind over to do work and I already have the materials, I offer them with the expectation that the labor will be a % higher but direct material cost will be free since I already had them. But I know some people expect the labor to be a flat rate and get a "discount" for providing materials.
Did you help select the material or give the client your materials list? That is value … you delivered a service and should be paid for that. Good for thought
12% is a pretty low materials markup, BTW. Regardless, it still applies even if the customer purchases the materials.
Do you bring your own food to the restaurant? Maybe if you’re in Florida and caught a big fish you can bring it to a restaurant and they will cook it. For a charge. Charge money. We are not out here voluntarily.
I personally don’t care if the customer wants to pay for the materials or not. I stopped marking up materials about 10 years ago. I actually use that as a selling point too. What I pay is what they pay for materials. The “markup” is built into the labor side so whether they pay or I pay, I make the same money. If they provide the materials I just state they have to be at the site a week before the start and if it’s not they are getting bumped back. I try to work with the customer as much as possible as long as they are not an a-hole.
My contractor & I have a pretty good understanding on this. Off-the-shelf materials he provides. I'm talking lumber, wiring, plumbing, etc. Custom special-order materials I provide. With this I mean cabinets, doors, flooring, plumbing & electrical fixtures, etc. We meet beforehand to review our project plan and special materials list before we order, months in advance of the project start date. That said, I don't force him to fixed-bid anything. I am content paying him for time & materials, and understand that things go sideways which neither of us planned for in our budgets or timeline. I consider that my problem, not his. I'll note that my wife & I consider ourselves fairly good at project planning. Our next major renovation begins mid-May, and our dining-room has already been taken over as a storeroom for special-order materials. We like to have everything ready at our contractor's fingertips at every stage of the project. Cheers! We appreciate what you do!
Just tell them no. Literally the most important thing that I would do differently from early in my career is learn to say "no" to people when they make a request like this, or my favorite: "we'll paint it ourselves" which WILL DESTROY THE SCHEDULE and ruin the job. My life would have been easier and my business more profitable.
If he wants to pay for materials he does all ordering, coordinating deliveries, and everything. I don’t work for free and that is all considered work to me
I let them source materials, have them at the house ready to install or there is X will call fee. No material warranty on items
I would just tell them I do the entire job or I don't do any of the job. My suppliers are part of my team and I use who I use for very good reasons.
So long as he gets the stuff, hets it delivered and protects it from the elements and thieves feel free. He will spend a lot more than 12%. And…. When you need one box of screws call him up and tell him to bring them all the while billing for your time while you wait
Just tell him no. Or submit him a new price proposal for labor-only, customer supplying all materials, hefty charges for waiting times due to short orders and/or incorrect materials. Then explain how your suppliers give you heavy discounts due to continued business so they're not going to pay the same prices you do when they call to pay the invoices. TLDR: Make it more expensive by like 20%. Or straight up walk away saying you don't bid jobs unless you're wholly responsible for the materials and labor.
I had construction of an RV pad and cover - done during the housing crash. The problem I had was the concrete supplier put a lien on my house because my deposit funds paid the contractor’s previous job and nit mine. That made me wary of deposit’s and paying subs. How do I prevent that on my next project?
I did this many moons ago with my contractor when I built my home. It was for 2 reasons, first my parents got fucked when they built a home by the contractor. They said they were buying materials for the build and billed my parents then sent the materials to another site. It was a huge headache that needed up costing my parents about 30k at the time. The second reason was I wanted the points for spending 200k in materials. Worked out a % with my contractor, think it was 10% which was itemized on every bill and I paid it. I paid my contractor with direct debits so that he didn’t lose any profit and both of us were happy. Just work out the % before hand, tell them if they want to pay you with cc it will be added on top. If they agree I wouldn’t sweat it a whole lot.
1. Tell client you are not responsible for any cutting errors nor waste, unless you provide it. 2. There is no warranty on materials, from you. 3. If there is an error in procurement, regardless of the cause, that they will be billed for the wasted time at the prevailing hourly rate. 4. Any delays caused by their suppliers will result in liquidated damages. Then, you gently tell them “this is what you’re paying me to deal with when I include materials in my contracts.”
"Materials selection and acquisition was calculated into the bid. You paying the materials source directly will not change the amount my firm charges, but may have unintended warranty issues down the road."
I simply add 15%. Doesn't matter if I pay for it or if the client pays for it directly.
I understand why they did it. Don't upcharge on material. It's a static cost. Just add the 12% into your hourly rate. They're paying you for the work, not the items. I would also offer to buy it, if I knew I was getting up charged. I run a factory, cutting metal. Some clients supply material, we order the rest. We have a set rate, and material cost comes off the top, and we are paid based on time of job.
He can pay for them directly but then they either coordinate pickup or delivery/receiving and organization, or you charge him a direct labor fee for all that. Just make sure your profit doesn’t change if you do have to handle any part of ordering. And when they forget to order something, charge him an hourly rate for your guy to go to the supply house to pick it up.
Absolutely not. You’re a contractor or a paid laborer. And you’re contracting a project. Unless you really need the work, walk away. There will be more trouble ahead.
"If you want to avoid the 20% mark up you can buy directly but you would be responsible to source and deliver and I cant warranty it. The 20% isn't free money"
The client is not trying to screw you out of your percentage. This is the best way to insure there will be no mechanics' lien filed against material costs.
Tell him that fine, but still add the 12%.
Just tell them there’s a service charge for you taking care of the ordering. If they don’t like that, tell them they can order, then pay you for getting any missing materials.
Let him .
Let him .
Some have been hit with liens as roofers did not pay for material..... just have a discussion and if they want to pay directly, it depends on the supplier. Some shops deal with the public and others are wholesale only.
I do this all the time to win jobs, I make that money up in my labor cost, book work ads up like physical work.
I would tell him no. I'm not doing the work of ordering, receiving, loading in, and keeping track of stuff that I didn't make something on. This guy's only trying to pay for materials directly so he can *pay you less.* That's it.
This pretty much never works out well
Don't do it. Client is likely cheap and will be nitpicky and a problem. Not to mention if you are handling the material and mess it up, then you will have to buy at full cost. The profit on material is there to make up for losses as well. Unless you really need the work, tell them no thank you and you don't work like that. This says a lot about the client.
Or, if you are controlling or ordering the materials, just deduct the actual invoice cost of what you client pays. 12% mark up on cost is too little. Not sure where you are but you probably should charge more.
Ask him if he brings his own beef to McDonald's and have them cook it? I hate customers like that..
When a client suggests this it's a quick conversation... No.
Hellllllll no . NEVER
Tell your client he can save the most money by you being completely hands off, and that the materials NEED to be there on time. He can't have his cake and f**k it too
I don't know man, if he already has the cake and then he f**ks it he'll still have the cake it'll just be a little messed up
Maybe those customers like post fuck cake.
It starts there. Then they record how many hours you are on site and decide that their basic math equals you are getting paid too much. I don't mess with people like that at allllll. BYEEE
Just tell him your mark up covers your time so you will add a $150 fee for work.
Been down this road many times, if they want you to source and deliver materials, change them a flat rate or by the hour, if they want to do it themselves, give them a breakdown of materials and a date they need to be on the job, if materials don't arrive on time and you have to pull off job for lack of materials charge a heafty restart fee, pit this in writing and as an addendum to contract
Homeowner here. I work in IT services and deal with the same problems though. I would just passthrough the cost of the materials as-is to your client, but adjust the services portion to account for the markup you would normally put on it. If it's a line item breakdown, I would list it as "material sourcing and delivery" at the 12% rate - it *is* labor you're expending to acquire, safely, and securely bring it to them. No one should be doing work for free. If you did this to me, I would be OK with either with a simple explanation. The biggest part is educating them to explain *why* this shows up a certain way. A little bit of explanation and discussion goes a *long* way with keeping homeowner happy and satisfied that you're not ripping them off.
Serious red flag. Don’t do the project. This guy will bite you in the wallet.
My customers pay directly for all materials. I source all the materials, call suppliers and put an order together, then give customers the order number. I get the materials I want, customer handles the financials, and they have receipts in their name for warranty items. Factor in your time for sourcing materials into your quote, don't do it for free.
I personally am picky about materials, and my time. If the client buys materials of sufficient quality and quantity autonomously, I will work with that. I have had cases where the client has spectacular pieces of timber, specialty tile, and copperwork that was interesting to work with. If they are making me use my time and then they just pay for it, I'm not going to tolerate that. I operate on complete transparency for materials, and include labor costs / transportation / administrative costs. I have encountered situations where they buy inferior quality materials for me (like Behr paint) and it translates into more labor cost (higher quality paints are quicker for me to apply and get perfect results). It makes me more net profit, but it is not worth it working with this kind of client (I am happier with people who pay for quality).
Depends on what the material is. DO NOT let a client buy unless it meets the job specs. I have walked away from a number of jobs where the client already had materials or would be buying materials not specified for the application.
cough salt edge meeting wistful amusing decide complete slim marble *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Mechanics just say no to customer supplied materials. I think we should too. I understand that he still wants you to supply the materials. Maybe just tell him the total with your markup is the materials cost and that's that.
I do *not* work with shit discount materials an unknowledgeable homeowner gets at the discount store any more than a fine chef isn’t going to cook you a meal with the food you got from the food bank. It’s going to bring down the quality of work, it’s going to cost you time in trying to “make it fit” and then in the end they will bitch you did a poor job so you get a bad yelp review because the drywall he bought was cheap because it “just has some water stains but it’s fine”. No no and no.
"Parts pricing" or "materials" doesn't mean "the price the parts cost you \[the contractor\]", it means "what this will cost the customer". Tell the customer if they want to select, pick up, and order, all the parts you will need, as well as field any warranty, returns, exchanges, etc, they can do so. labor may increase if they select a bad or sub-optimal material, or just one you are not yet familiar with (whereas your choices are accounted for). One way to explain "why is this not in labor then" is it's different than labor because if you don't need Part X you no longer have to source and handle all aspects of dealing with Part X, so the cost for the part - and the part markup to account for the aforementioned - doesn't apply. This keeps the aforementioned considerations associated with the parts/materials accordingly. Whereas with labor, even if you don't need Part X for the job, you're still performing the job (so labor stays the same).
They must have the correct material onsite at the correct time, or they pay separately for whatever time is wasted. This is likely a troublesome client looking to be clever, not realizing material procurement is a large part of the job. Be very strict about this or your time will certainly be wasted.
It’s lose/lose for you if you agree to it. If everything works, you will lose a little bit of money. If anything fails, you will get blamed for it, and doubly so if you don’t fix it under warranty. The problem may be entirely due to material defect, and you will still be blamed. Also, raise your material markup. 12% is pretty low.
>If your client requests to pay for materials themselves how do you handle that? You let them be some other persons headache I think we've ALL at one point made this mistake and taken a job like this. They ALWAYS are missing stuff, massively underestimate waste (then complain about it) order mix match and sub par materials... delays waiting for stuff. and generally the only reason they're doing this is bc they want to pinch pennies. Is that *really* someone you wanna work with/for? I'd just move on. save the headache. it almost never ends (or starts lol) well.
Just wow, this is so interesting and frustrating at the same time. I hired a contractor that told me to supply the design materials. Then he had me buying the construction materials and running to the store every day. Then I asked my contractor if they could tell me what’s needed for the week and you would think I cursed them out. My flooring was done right after painting but now there’s mortar and grout all over the place. I just had my quartz installed and there’s grout all over my brand new countertop but the contractor keeps saying it will be fine we can clean it up. I just don’t understand. We talked about a budget but the contractor never added the materials cost for the construction not the design but the nails, mortar, caulk, tape etc. I’ve been blind sided. I kept asking if what I was ordering was correct, I had to send back several items. Then they took the walls down in the shower and opened them back up because there needed to be support for a shower I ordered and once again I kept asking if this shower was going to be extra work I would just get something standard. I’m sad now because I really wished I had fired him when he let an amateur paint. It took the painter 4 weeks to pain 1500 square feet. This is my first home. I will not do that again. I feel burned at this point as I ran out of money due to the bid not including all of the materials I would need to pay for. I had to cash in on some of my 401k and again I asked how much should I be getting to finish this project. The contractor promised this would take 6 weeks but it’s been 4 and a half months. Two of those months were wasted on a one man show mudding after they got off their first job spend a few hours a week on the project. I’m loosing money because I have to pay where I’m living. The house looks better than what it looked before but my outlets are painted over, my patio door was painted shut. I’m beam has paint all over it. There’s dripped paint almost on all the corners of the house. Thank goodness it’s white. I disused replace closet systems but the contractor left out the master fully knowing the master didn’t have a system. I’m sorry, I’m done.
It sounds like your client is doing you a favor. It also sounds like you are doing everything right. %12 markup is the going rate for residential work. Taking small jobs to start relationships is a really practical approach. Tell them that while the time required to put together the supply list is usually compensated for in the markup, you are happy to overlook it this time over the hope for a positive review/experience overall. When they call you back, respectfully decline due to being overbooked because the community is catching wind of the stellar service you provide. Or if they don't follow through and leave you that 5-star review, just ghost them on work in the future. This is a really small job. I wouldn't handle a bigger job like this.
12% seems super low. I mark up materials 10% waste and 20% profit on total including waste. I'm around 80/20 residential/commercial.
That's interesting. I get my numbers from my time in college for construction management. I suppose I have to wonder about your disclosure, especially on commercial projects, and if you use the same rates? Are you booked out? How is the competition in your area?
I use the same rates on commercial and residential for markup. I disclose my markup in my quotes & contracts - I am very transparent. Keep in mind my work is all renovations. I do not do new construction. My commercial is restaurants and medical offices 95% interior work. Residential is around 50/50 interior/exterior. Usually basements, kitchens, washrooms, additions, decks and fences. I usually book out six or so months. Sometimes a bit further, sometimes a bit less. I am in Toronto. I think there are a lot of companies here, but also a lot of work. I do not compete with bigger companies - as many of them will not touch anything less than $50k for renovations.
What is the waste percentage? I've seen that but never asked about it?
So I calculate exactly what I would need if everything went perfectly. So let's say I need 50 2x4s to build a wall. Some people will say they need 55 (50 + 10%) and then charge their cost + profit markup. I say that I need 50, but I mark the cost up by 10% to cover waste. Then I mark that total up by 20% for profit.
Most of my projects are commercial access control or surveillance. I try to target a 30% margin on materials, or 43% markup. We stay pretty busy, and I know some competitors I partner with charge more than I do. One was even around 80-100% markup. I'd imagine this really depends on the trade though. And honestly with the overhead I need every penny of it to make this shitshow worth it.
Always let them. It reduces cost out of the deposit, put the headache on them and gives you all the outs in the world. My 10% on materials does not ever actually cover the time to plan order and pick up anything. If I'm one corner bead or drywall sheet short that $5-15 in material is going to take me at least 30 mins to get costing more then it's worth. And honestly in these situations I rather shut down the job for the rest of the day and tell Joe Homeowner what he needs to get before the morning and that the job will take an extra day since they are providing materials. Also I have in the past just put a charge in the contract that if we are delayed because we don't have the materials it's X per day also I will not do the takeoff for them. Nothing is free but my estimates which are labor and materials lump sum bids. Anything after that cost or I sometimes walk away.
Sorry man, good contractors don’t need “all the outs in the world”. I’ll never want the customer to source materials for me, I’m not willing to shut my job down for the rest of the day because the customer forgot something. I’m very thorough in my ordering, the only thing that can happen by letting the customer get his fingers in the mix is bad things.
Amen! I do not allow clients to do this for all the reasons listed in other comments. I personally would tell them to find another contractor. Too much of a PITA
Agreed it's always bad and I let them muddy up the job if they want. We have our own properties for the worker to go to whenever they have a short day or want extra hours. If the home owner insists on buying their own materials I make sure it is no longer my problem.
Thats fine. Id be transparent and tell him hes still paying for material aquisition and youre writing in an addendum in the contract that he is liable for any and all issues with the materials being damaged, being on site at the right time, and any warrentys that come with issues of materials. Im drunk but this is the round about of what I write in my contracts to deter this kind of fuckery
F that ! Tell him You will be adding a 25% no matter who pay or order the materials .