Mark up on parts

Discussion in 'Plumbers' Talk' started by imran_, Mar 15, 2009.

  1. imran_

    imran_ New Member

    Guys,

    I got a bit of a response to a thread recently on my mark-up of parts, which I THINK are acceptable and fair - and way below the industry standard. The mark-up is also transparent excl. big ticket items so the customer knows they are not being mis-led or ripped off.

    1. 15% on all stock items (pipe, fittings, etc, etc)
    2. 15-30% on non-stock items
    3. Fixed mark up on big ticket items (boilers, baths, etc.) to take account of ordering/delivery costs
    4. 20% on all parts to cover wastage, consumables, etc.

    I don't have a problem with this. But then again I don't charge time if I need to get parts, nor do I try and always go in at retail cost. I'm just wondering why others have such a problem....?

    In business everything has a cost. At each step of the supply chain - including me - a margin is added. People are prepared to pay a margin to get advice in a shop (or not get advice); why am I different??

    Or to put it another way, what is the cost of fitting a 15mm end feed elbow?? Buy it, stock it, clean, deburr, flux, solder, clean off..... Every step is reducing your profit margin to an extent where if you just charged trade price for the elbow it will be costing YOU to fit it.

    Go get your van serviced. Then look at the bill. Then figure how different (and less profitable) your bills are.

    So I guess my question is why people want to give stuff away for free?
     
  2. mad.max

    mad.max New Member

    Spot on, Imran. The only point that anyone could argue with is the reference to deburring and cleaning etc. This would be accounted for in your labour charges. If anything, your mark ups are conservative, compared to the retail trade. HRPC etc dont include labour in their warranty, but we are efectively forced to.

    For inexpensive parts, we allow a 50% mark up, and reduce on a sliding scale as the parts get more expensive.
     
  3. Dick Puller

    Dick Puller New Member

    Very good thread Imran, and you've clearly given it a lot of thought. We take a more simple view on mark-ups, disregarding Labour costs, on materials, we add 100% on boiler parts as they are mostly small items, but requires a lot of admin(phone/fax/email ordering, handling & paper chain). For general Plumbing & Heating repairs(Eg; replacement TRV or syphon) we add 50%, as they are mostly available at most local merchants or post supplier etc.

    As for being transparent, it's not an issue, people rarely ask & there's no way we are telling them! They employ us as Plumbers, but that doesn't give them the right to know how our business operates.
     
  4. Dick Puller

    Dick Puller New Member

    Sorry, I forgot, on larger replacements items(new bath or boiler), most will ask for an estimate and estimating is a whole different thing, then you may be competing with others and winning work, that's a whole new ball game!!
     
  5. superfurryanimal

    superfurryanimal New Member

    Nice mark ups dp.......

    what if had to change a pcb costing u £200.. would u charge ur customer £400 ???

    Im not having a go, just want to know how you get away with it!
     
  6. Dick Puller

    Dick Puller New Member

    Yes(thems the rules), but of course we would let them know before ordering the part. Also, we are in the business of keeping customers & getting more, so if they are elderly or on a low income, we would review the mark-up.

    Business aint a Charity, if we don't cover our overheads & make a profit we don't survive!! While we'll do a freebie for old Mrs Jones at Number 21, she has family, friends & relatives - that we want as customers.
     
  7. doing a bit

    doing a bit New Member

    i keep a lot of van stock and it makes the job a lot easier, just a short trip to the van and not to the merchants, also use screwfix as they come to you ! when i am subbing i used to supply the parts but the guy now supplies them to me, he thinks it will be cheaper as there is no mark up BUT i charge by the item and now he has to buy in bags ( 25 s etc ) and is quite often doubling up so i have lost the mark but am gaining on lots of extra stock for my other jobs !!
     
  8. oliver1234

    oliver1234 New Member

    I agree, you have to mark materials up, if you supply them at cost why bother supplying them at all?

    When you supply a part your customer has a contract with you and even if you sold it at cost it would still be your resposibility to fix any problems that reult from a faulty part that you supplied.

    Unfortunately the internet and the proliferation of DIY sheds has made the end user more savvy about costs and some will inevitably question what they percieve as you profiteering but as long as you are prepared to stand your ground and explain the need to mark stuff up it shouldn't be a problem.
     
  9. Synchron Motor

    Synchron Motor New Member

    No problem at all with mark up, and Imran yours sound perfectly reasonable.
    It was just the way you worded it on the original thread (i.e. "I charge vat on vat"LOL!)
    Everyone charges what they charge, and we've all got to make a living. My prices for smaller jobs, such as changing the odd rad, or rad valves, I do at a very reasonable rate, with minimum mark up, as these jobs usually lead to bigger jobs,i.e complete systems or boiler replacements,where I can make good money.
    As I know that I do a very good, thorough job with quality materials, I'm not bothered at all about being undercut.
    By the way, what are the four most commonly used words in Ireland?
    Well, oil, beef and hooked!
    Happy St Patricks day!!
     
  10. tackleburger

    tackleburger New Member

    I charge isolation valves & fitting a little bit less than the local shed. So effectively make about 200%, I sometimes comment that they are dearer in B&Q but not often. On jobs where there is a lot of pipework i estimate what I need and mark up 20% then add a further 20% and state on the quote it is a maximum for pipework & fittings and usually I am able to knock 10% off which looks good.

    Bathrooms I tend to add 10-30% on depending on the size of the order but do shop around and play merchants off each other all done by E mail. Boilers are a straight 15% same rules apply.
     
  11. Dyke Pullover

    Dyke Pullover New Member

    I do a fixed price for tap changes, the rest of the time sit in the van look at what I paid X by 4 divide by 0.1 then plus 15% count number of items work out the average then times 1000 ;)
     
  12. Cornish Crofter

    Cornish Crofter New Member

    I tend to charge at just below shed prices.

    I don't always go for a fixed %age mark up. I charge what is reasonable.

    For example, if I used all those bits I bought for £32 from Jewsons the other day on a job, I wouldn't just add a percentage to that little lot. There's no point in me bagging a bargain if I'm not going to profit from it. I will charge it out as I use it at the going rate.

    On the other hand, I have nearly finished a job where I have been paying normal merchant prices for almost all the materials. I will add a small %age to my costs for the normal priced stuff to cover my sourcing them, then charge the equivalent to normal charged price for some materials that I bought at about 10% of normal cost.

    It's a question of what that part, material item would normally cost to replace, not what it actually cost because you were in the right place at the right time.
     
  13. plumb paul

    plumb paul Member

    Interesting thread - only this evening i went to quote for a bathroom and it turned out that the merchants had already given them a price - at full trade discount :(. It also happened to a friend of mine at a different merchants last week. It seems that as they are now getting a little quieter and having to compete with such as b&q's half price offers etc and are offereing trade prices to anyone that walks in!
     
  14. plugmyhole

    plugmyhole New Member

    The first rule of business is to make at least 33.3% on return accross the board irespective of whether you are a retailer or a service provider charging labour for your time.

    This means that as plumbers, ( i assume that some of you are, inspite of the twaddle sometimes spouted), you definately need to charge up on parts to cover costs of handling and to make up on underquoted jobs where the time taken to complete is longer than expected.
    If you dont charge a desent mark up, you wont go hungry, but you will wonder where all that lovely labour charge money has dribbled away too when you get some unexpected bills through like van maintenance to name one.
     
  15. Dick Puller

    Dick Puller New Member

    A very valid point 'upyerhole', if you do an estimate & think; Gawd, that looks high, it's not - it's just about right.

    'When the going gets tough, the tough get going' Business is tough, if work gets tight & the phone doesn't ring - get going!!
     
  16. tightenit

    tightenit New Member

    Think plumb paul has got it right. I've had similar conversations with my supplier - and yes they're competing too.
    Mark up is based on the actual likelihood of costs you have incurred, or indeed might incur if you're responsible for supplying any goods. Unfortunately some trades see this mark up as a revenue or profit stream.Some say that we should charge for our expertise in knowing what to buy - well maybe sometimes. When everything goes smoothly you're obviously quids in with your mark up. When porcelain or radiators are chipped, new boilers are goosed or even a a cylinder leaks from new it's your problem. You supplied - you replace. You even have to throw in your free labour to do the job again.
    Now - customer buys and supplies - no risk to you at all. No outlay, no worries. Just labour. Think about it?
     
  17. Dyke Pullover

    Dyke Pullover New Member

    Sorry gents, that's not you Puller, for messing around earlier. For parts I do a fixed price jobs, however if I need something in particular for a job I buy two of them. then I have increased my stock which started from nothing and the customer that I am doing a job for pays for it.
     
  18. tackleburger

    tackleburger New Member

    doesn't ring - get going!!

    Very true Dick and if it looks reasonable it is too cheap.
     
  19. Mary Poppins I Aint

    Mary Poppins I Aint New Member

    a job for pays for it.

    So basically, you screw your customers and then brag about it on a forum the public has access to - muppet
     
  20. Mary Poppins I Aint

    Mary Poppins I Aint New Member

    The original post did not display properly. My reply was only directed at standalone
     

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