Overheard a contractor at the supply house say he charges a flat 40% markup on materials

I was grabbing paint at the local supplier yesterday and this guy was talking to the counter guy about his pricing. He said he just adds a flat 40% to whatever the material cost is, no matter the job. That got me thinking, because I've always done a more detailed markup based on the project size and client. His way seems so simple, but I worry it could leave money on the table for big jobs or scare off smaller ones. I ran some numbers on a kitchen I just quoted, and his method would have made me about $300 less. Has anyone else settled on a set markup percentage that works across the board?

3 comments

3 Comments

sam_murphy3920d ago

That guy's flat markup is a great way to make less money on every single job.

bell.laura20d ago

Oh man, I totally get that. I used to think a flat markup was the safe way to go too, but @sam_murphy39 is right. You end up leaving so much money on the table, especially when material costs jump around.

jamesfox10d ago

But is it really that much money, like enough to stress over?