Percentages on material you charge

Rulin · Nov 18, 2009

Hi Guys,

Had a meeting yesterday with a new client we got on to the subject of 'MCD' main contractors discount
Which they said they like to see from 1.5% to 5% I thought that’s fine some want more. Right getting to my point, iv all ways added monies on for material to cover things like MCD, time pricing ,meeting(s) ect, iv all way added on between 10-20% but they said to me they want me to give them the cost of material for what I get them for they thought that 10-20% was very very high..

Q, What do you guys put on top for material ..if any?

Thanks for any input
Rulin.

V · Nov 18, 2009

you must put money on

as you said time to get material etc

only thing is when clients think to get stuff themselfs thinking of saving money more often then not they get the cheap stuff that can sometimes be worst to fit, plus its normaly the wrong stuff

also if you have trade discount then that is part of the perks of being qualified

a few weeks ago a builder friend of mine tried to use my trade card but was told i had to order the stuff myself with my account number

15% mate for fuel time etc

drywax · Nov 18, 2009

50% then if they start arguing about it you can offer discount and make them feel happy about the fact they have just barted you down if they don't question it its more money in the sky rocket for yourself my son

Remember retail usually charge upto 100% on there items why do think they can offer silly discounts and still make a living.

UNG · Nov 18, 2009

Sounds like they want all the cake and not hand any round

It is usual to put 10 - 20% on the net material cost and 5 - 10% on the cost of any subbies you have to employ. Although one company I did a lot of installation work for a number of years ago managed to increase my price by 100% to the final customer on a number of occassions, yet wanted my lowest pared to the bone price, they got a bit embarassed when I found out

I have seen material supplied at list price to main contractors to avoid this issue of mark up before now

A couple of things to watch with main contractors is the 2.5% 12 month retention issue when the work is completed, some try to take this as a discount as well, and the payment terms can make a profit making job in a loss making one

drywax · Nov 18, 2009

You'll probably find that the wholesalers list price is just that and probablly get upto 40% off that.

The best way to do it is work out your normal costs add there % then when they get there bill show it less the discount but make it apparent you have discounted it.
in fact no add treble there discount lets says 7.5% because if they do use you there cretainly going to try and screw you down more in the future. They call it free enterprise I call it legal blackmail and unfortunatley thats the way business works its all about maximising profit for the share holders no matter at what cost. They don't take into consideration your family and living needs or any morality issues its all about the bank notes.

A good example would be how the dairy farmers get screwed and blackmailed by the big supermarkets with no consideration for the full sub-structure of the farm ie the people who supply the farm, the cafe the farmer visits in the morning, the electrician who wants to put a new light in the yard, etc etc

Apologies for the rant but big business has a lot to answer for the way the country is today and the government seem reluctant to do anything about it probably because the major share holders fund the parties.

Wow getting a bit deep there

ghost · Nov 18, 2009

Personally, I can't see what business it is of your client what you pay for materials. Tell them to open an account at a wholesale of their choice and give you a free reign of what you purchase, then charge them a premium day rate for your time. I'm sure they would go for that!!!!

Some people!!