Mark up

[badranman]

Here's another question I have. What kind of mark up do you guys normally put on a product. Let's say you had to go get it, like pipe for example. How about gravel that's delivered? Any thoughts?

[dozerman]

It depends,

T&M;
If its a good repeat customer and an isolated order, no markup.
Otherwise, 10% for anthing other than earth products.
I figure earth product, hauling, and markup and charge per yard.

Bids;
If its a good repeat customer-5%
Others-10% to 20%
Usually my estimates are 10% high so I net about 15% profit/overhead over cost.


If I had employees, accountants, office to support, I would raise all these cost by 10%.


These figures are in "normal" market conditions, ie; (there is work to bid on)

[DKinWA]

I aim for 10-20% markup over retail on most things like culverts, drain pipe, gravel, etc. I've also made it a point to work out discounts with suppliers on things I typically use so I'm actually making more than the 10-20% markup. I don't think this is unreasonable since chasing parts and materials is time consuming and I'm not about to work for free. I also try to keep extra materials/parts that I use regularly so I don't have to make special trips. Unfortunately, things don't always go as planned :(

[leadarrows]

On gravel 10% of say #8 stone which I pay $8.90 for would only be $6.23 for the seven tons that I can haul on my single axel.
Thats not enough IMO. I like to get at least my gas money back on the load so that my haul fee is profit. So I up the per ton price on all the stone prices by $3.00 a ton. That is $21.00 per load and that just about covers my fuel cost. I don't know about pipe thats not my thing.

[Oregon Rob]

Wow, the numbers that you guys are throwing out there seem surprisingly low to me. I take it that the margins are thin on excavation work?

[dozerman]

When you say mark up, I read that to say markup over cost.
Cost is labor and material.
IE;
10 yards 7/8" drain rock delivered
cost at pit-$15.00/yard
cost to haul-$7.00/yard
subtotal-$22.00/yard
profit (markup) $2.20------(10%)

Total cost delivered $24.20/yard

I know these costs are high, its because we are on an island.

But the math is the same for anywhere. Use the local pit/ hauling costs and add your "Markup".

Cheers....B

[leadarrows]

Originally posted by leadarrows
On gravel 10% of say #8 stone which I pay $8.90 for would only be $6.23 for the seven tons that I can haul on my single axel.
Thats not enough IMO. I like to get at least my gas money back on the load so that my haul fee is profit. So I up the per ton price on all the stone prices by $3.00 a ton. That is $21.00 per load and that just about covers my fuel cost. I don't know about pipe thats not my thing.
I don't think I made something clear. I still charge a haul fee that I wasn't going to post. But I guess I will. The $21.00 per load is just the mark up on materials. I still charge a haul fee of $50.00 on loads within the county I work out of. So Thats $71.00 per 7 ton load. I want to make the fifty so I mark up the material to cover my costs. Does that sound more like it?

[badranman]

Thanks for all the replies so far. I was basically wondering how much in percent do you mark something up. I think it would depend on what it was because some things may cost more for you to get than others (something 5 miles away vs something that is 25 miles away etc.). I know an electrician who marks all his stuff up 100 %. He pays $.49 for it he charges you $.98. I was just trying to get a ballpark if I even could on how much people were marking their stuff up , 10%, 20% etc. Is it just enough to cover your fuel plus a certain hourly wage you've worked out or do you just say to yourself " oh maybe 20 bucks on that , 10 on that etc. As far as the gravel thing, say I call the local pit and have them drop off a tandem load that cost $250.00. I gotta charge something extra for taking the time to call them and organizing it don't I? How much? A certain dollar amount or a percent? Keep the replies coming!

[DKinWA]

I didn't do a very good job explaining things either. With gravel, I charge roughly 20% over retail cost (I pay wholesale price) plus my hourly truck rate for hauling. So for instance, if the price is $10/ton (retail) and I pay $9/ton (wholesale), I charge $12/ton to the customer and I make $3 or 25% for materials. In addition to this, I also charge the customer the hourly truck rate for hauling.

For things like culvert, pipe, etc, it's much the same. If a customer wants 20' of culvert delivered, I charge them 10-20% over retail price for the culvert plus my hourly rate for delivery. When it comes to biding projects, I use the same method for calculating materials costs. Once I figure the materials costs, I calculate the labor and equipment costs to install them.

BTW, for some customers I'd like to add a pita surcharge, but I'd feel funny doing that :)