Blog/ Materials
Markup on materials: why and how much
Many tradespeople sell materials to the client at the price they paid. It looks fair, but in fact you work for free every time you drive to the shop.
Materials do not get to the site by themselves. You choose them, go and get them, pay with your own money, keep them in the van and answer for them if they turn out faulty. If the invoice shows the purchase price, all that work is free.
Markup is not a trick. It is payment for the work with materials, just as your hourly rate is payment for the work with your hands.
What the markup pays for
When a client asks why the cable costs more on the invoice than in the shop, the answer is this:
- Time: choosing, the trip to the shop or the wholesaler, and loading.
- Money: you pay today, the client pays you in two weeks or a month.
- Risk: returns, faulty parts, leftovers that stay with you, and the warranty on what you installed.
What markup is reasonable depends on the material. On small parts and cheap materials it is usually higher, on expensive equipment lower, because the client can easily compare those prices. Many tradespeople start at 10 to 20 percent and adjust with experience.
If you sell materials at cost, every trip to the shop is work for free.
How to bring it in without arguments
There is no need to hide the markup, but no need to write percentages on every line either. Three things are enough:
- Enter the purchase price and the markup for each material, so the selling price works itself out.
- Put the selling price in the quote, so the client sees what the materials cost before the work starts.
- If the client asks, explain calmly: the price covers getting it there, the warranty and the fact that you pay for it, not them.
In the Kvedo catalogue every material has a purchase price, a markup and a selling price. When you add a material to a job or a quote, the selling price goes on the invoice, and you always see what the material cost you.
