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DiSantolandscaping
08-20-2011, 03:43 PM
hey I mark my mulch and loam up by like 30% but i was told thats not enough. My trees i get 100% mark up just because you know how that works. but ive been hearing that people are marking up like mulch and loam by 45 to 50 % what are you guys doing. and i also just found a new guy to get loam from which would give me a 119 % mark up from where i normally get it. I normally pay 25 and charge 32.50 per yrd well this guy will sell it to me for 15 per yrd or deliver 19 a yrd.

tajn84
08-21-2011, 10:25 PM
i get mulch for $20/yd and deliver and install for $60/yd and that is cheap for my area

THEGOLDPRO
08-22-2011, 08:50 PM
I don't mark up materials because i'm not a scum bag. If i get mulch for $20per yard the customer gets it for $20per yard.

I make my money on the install not the materials. If you price a job correctly you don't have to mark materials up like a scum bag to make extra money that you didn't earn.

In my opinion people who mark materials up are thieves, And scum bags, That's just my opinion tho. i'm sure the scum bags will come on here and defend them selves for marking up materials for no good reason other then to rob people.

Gilmore.Landscaping
08-22-2011, 09:00 PM
You bet I mark up materials. And you know what no one has ever complained. I usually figure out what the my trade price is and then what they charge retail and keep my markup just under retail.

Let say soil is $18/yard and retail is $24 I will provide pricing to the client based on $22.

I don't understand how people can put on huge mark ups on items.... why wouldn't the homeowner just buy it themselves and have you install it?

THEGOLDPRO
08-22-2011, 09:07 PM
I don't understand how people can put on huge mark ups on items.... why wouldn't the homeowner just buy it themselves and have you install it?

Thats what im getting at. If your just marking the price up a few bucks above your cost thats whatever but when people say they mark materials up 40-50% it makes me believe they are scumbags and thieves.

Do they really believe the homeowners are that dumb that they cant figure out what materials cost??? You really think homeowners think mulch costs $50per yard?

I find that when i'm honest with the homeowners and give them the same price i pay on materials they appreciate knowing im not robbing them and giving them a good deal. This in turn keeps them coming back year after year after year, and also referring more people to me because they know im not a scum bag.

tajn84
08-22-2011, 09:35 PM
I don't mark up my materials i get mulch for $20/yd and deliver and install for $40/yd for a total of $60/yd. I try to keep my prices around the retail prices as best as I can.

ny scaper
08-24-2011, 10:27 AM
I find that when i'm honest with the homeowners and give them the same price i pay on materials they appreciate knowing im not robbing them and giving them a good deal. This in turn keeps them coming back year after year after year, and also referring more people to me because they know im not a scum bag.

I agree 100%. I get mulch extremely cheap. Its not the greatest stuff, but its clean and I've never had a customer complain. I physically show them what I can get them for cheap if they want. It costs 1/4 of what most places are selling mulch for. I am upfront with the customer and dont mark it up at all. I still get mine in the end and they think they are getting a deal on the mulch which they are. WIN -WIN

masonenterprises
08-24-2011, 04:45 PM
I won't mark up materials either, but to think anyone who does is a dirtbag? Electricians, automotive mechanics, auto body, plumbers, irrigation installers. All of these trades mark up materials usually somewhere between 20 and 40%. So why would it be so scandolous for a LCO to do the same? Customers can go to home depot and buy light fixtures, plumbing fixtures, sprinkler heads, whatever they need. Yet when calling the professionals to install them, they will pay whatever is asked and it is almost always marked up. Automotive field is the worse. Marking parts up to 40% and then some! If you have a mower or truck repaired, you must know your getting "robbed" on parts cost.

ArenaLandscaping
08-24-2011, 05:49 PM
I agree , to disagree with marking up material. I have been going and doing business with the same nursery for the last 12 years and not only do I get my "wholesale" discount, I also get an additional 20% off anything I purchase.

If a homeowner goes to the same nursery, they will pay "retail" for the plant. I do not see what the problem is with charging the retail price.

The nursery tells me what the retail is. They even encourage charging the retail price. They told me it would be stupid and a loss not to.

Also, if you are picking up any kind of material for free and not marking it up a little. Your losing money!! Wear and tear, labor costs, fuel, time, time, time !!!!!

Most of my customers know that there is a small mark up with the materials for the job. Anybody who is in business marks up materials. That is why your getting it at wholesale.

AI Inc
08-24-2011, 06:02 PM
Wow, thats all I can say is Wow. Let me guess , you gentleman are also of the school of thought that you dont need to get paid to do the estimates on jobs you dont get either right?

ArenaLandscaping
08-24-2011, 06:14 PM
I AGREE with marking up material. I have been going and doing business with the same nursery for the last 12 years and not only do I get my "wholesale" discount, I also get an additional 20% off anything I purchase.

If a homeowner goes to the same nursery, they will pay "retail" for the plant. I do not see what the problem is with charging the retail price.

The nursery tells me what the retail is. They even encourage charging the retail price. They told me it would be stupid and a loss not to.

Also, if you are picking up any kind of material for free and not marking it up a little. Your losing money!! Wear and tear, labor costs, fuel, time, time, time !!!!!

Most of my customers know that there is a small mark up with the materials for the job. Anybody who is in business marks up materials. That is why your getting it at wholesale.

McG_Landscaping
08-24-2011, 06:22 PM
I don't mark up mulch too much. I know a supplier and he cuts me a great deal for our area. I charge customers what they could buy it for and I make money. I charge a delivery fee if I just deliver or I charge deliver and install fee if I actually install it.

masonenterprises
08-24-2011, 06:46 PM
I AGREE with marking up material. I have been going and doing business with the same nursery for the last 12 years and not only do I get my "wholesale" discount, I also get an additional 20% off anything I purchase.

If a homeowner goes to the same nursery, they will pay "retail" for the plant. I do not see what the problem is with charging the retail price.

The nursery tells me what the retail is. They even encourage charging the retail price. They told me it would be stupid and a loss not to.

Also, if you are picking up any kind of material for free and not marking it up a little. Your losing money!! Wear and tear, labor costs, fuel, time, time, time !!!!!

Most of my customers know that there is a small mark up with the materials for the job. Anybody who is in business marks up materials. That is why your getting it at wholesale.


I agree as well. Around here most nurseries arent even open to the public. Its for industry professionals only. And plants are typically less expensive than home depot or lowes, just without the fancy one year warranty the billion dollar companies can offer. So I don't think its out of the question to sell that plant for what someone would pay at home depot or other public nurseries.

vencops
08-25-2011, 12:37 AM
Holy cow....

Everyone doesn't mark up materials? Really?

So, those who don't.....have the costs associated with securing these materials included in their hourly rate or labor charge?

For example....Let's say it takes 30minutes to get to your material supplier. It takes another 30 minutes to mill around and get loaded. It takes another 30minutes to get to your customer's home.

If you don't mark up materials, do you charge your hourly rate for that time? How do you recover these COSTS? Is your time worth nothing? Your fuel expense? Your vehicle wear and tear?

I actually don't care how you do it. Just remember, Profit is not a dirty word. I mark up all materials 20% on principle. I should probably mark them up, more. My supplier's 40minutes from here.

Stillwater
08-25-2011, 01:54 AM
Holy cow....

Everyone doesn't mark up materials? Really?

So, those who don't.....have the costs associated with securing these materials included in their hourly rate or labor charge?

For example....Let's say it takes 30minutes to get to your material supplier. It takes another 30 minutes to mill around and get loaded. It takes another 30minutes to get to your customer's home.

If you don't mark up materials, do you charge your hourly rate for that time? How do you recover these COSTS? Is your time worth nothing? Your fuel expense? Your vehicle wear and tear?

I actually don't care how you do it. Just remember, Profit is not a dirty word. I mark up all materials 20% on principle. I should probably mark them up, more. My supplier's 40minutes from here.

does your 20% cover what you outlined above?

vencops
08-25-2011, 08:37 AM
HELL no. But, it's better than NOTHING!

I have a $777 aerate/over-seed coming up. Materials mark-up won't cover my time to secure them. It'll pay for my fuel, easily enough. And, my hourly rate for the job is good.

But, I'll spend 1:40 securing these materials (for the above). My mark-up on the materials is around $60.00.

lawnkingforever
08-25-2011, 09:01 AM
I don't mark up materials because i'm not a scum bag. If i get mulch for $20per yard the customer gets it for $20per yard.

I make my money on the install not the materials. If you price a job correctly you don't have to mark materials up like a scum bag to make extra money that you didn't earn.

In my opinion people who mark materials up are thieves, And scum bags, That's just my opinion tho. i'm sure the scum bags will come on here and defend them selves for marking up materials for no good reason other then to rob people.


I agree, I never mark up materials. Getting materials only involves a quick call to my supplier who delivers everything I may need. He also bills me and gives me 7 days to pay. The customer pays exactly what the materials cost and the delivery fee. I do not need to do a mark up for a 2 minute phone call. But if I was picking up materials, I don't see nothing wrong with charging the customer a small delivery fee for your fuel and time.

ron mexico75
08-25-2011, 10:03 AM
http://en.wikipedia.org/wiki/Pricing

http://en.wikipedia.org/wiki/Markup_(business)


And here is an exerpt from the 2nd link that I feel explains it very well.


--------------------------------------------------------------------------------

From contributor B:
First of all, your website shows some beautiful work. You should be more than proud of your woodworking skills. Secondly, as others have said, you are very likely not charging enough to make your business viable. Most of us that have been around for a while started at a pretty low hourly rate by throwing a dart at a board (something like a desired wage) but then realized that hourly rate couldn't sustain a business, regardless of how low the actual overhead is or is perceived to be.
I have a hunch you are spending lots more than 40 hours per week running your business and doing your projects and have not many more dollars in the bank account on Friday than what you started with on Monday. I also have a hunch that you are not billing for every single hour you work at $35/hr. That would mean, assuming a 40 hour week, you would be adding a minimum of $1400 per week to that bank account, plus the reimbursement and whatever profit percentage you added to your material costs.

There are at least four components in determining pricing on a job - labor, overhead, materials, and profit. Although the exact items to include under each of these categories will vary from shop to shop, using the L.O.M.P. formula on every job will help you develop a business, rather than a hobby.

Labor includes the cost of wages, benefits, taxes, insurance, etc. Labor cost is pretty easy to break down to an hourly rate. Materials are your actual cost of materials, taxes, and delivery charges - pretty simple stuff so far.

Here is where it starts to get a bit more complex, and where I see many shop owners fail. Overhead is pretty much everything else. Insurance, rent, vehicle costs, advertising and marketing, dues and licenses, travel and entertainment, education, bookkeeping, sales and administrative time and costs, office machines and software, telephone, heat, electricity, machinery and tools, taxes, depreciation on hard assets, shop supplies not for specific jobs, machinery repairs and maintenance. If you add all those costs together for a specific time period, like a month or a year, then divide them by the working hours in that same period, you will have another factor to add to your hourly labor costs to begin to make up your shop rate. In other words, your shop rate is the sum of your hourly labor and overhead costs. If you are not charging enough to cover your overhead costs in your rate, it comes directly out of your pocket.

As a reality check for a going shop rate, you can do a couple of quick things. Call your local electrician or plumber and ask them what they currently charge for their rate. Realize that these guys probably don't have as sizable investment in tools and equipment as many woodworking shops do, as they primarily work out of their trucks and maybe a storage building with a small office. I have yet to meet a long standing electrician or plumber that doesn't buy materials and supplies at wholesale and sell them at retail. Another one to easily check is a local new car dealer's shop rate. You'll probably find out you are half or less than what they get every day from every customer.

The final factor is your profit. Profit is the reward, over and above your personal wages, that we all strive for by taking the risk to be in business. If you don't add profit, where do the costs for rework or mistakes come from? How about the costs for unexpected additional time on a job? If you don't add a sufficient percentage on top of all the L.O.M. costs, your are relegated to work far more than 40 hours every week forever just to try to stay open at starvation earnings. Maybe you'd be better off selling everything, getting a job, and putting the money in a money market account.

While everyone figures their profits differently, you should start with at least a reasonable margin over and above the total of LOM. 5-10% is way too low to be much of an incentive for me to stay in business. I can do at least that good in money market funds or bank CD’s. You'll hear from some that you should charge what the market will bear. Most successful shop owners I know are somewhere north of 20% in their profit figures. There is one very important point that is not to be forgotten. It isn't always low bidder that gets the job. Conversely, the high bidder doesn't always lose the job. I don't know how many times I have bid double or more on a job and still have won it.

In my opinion, I'd rather work on fewer jobs and earn higher profits than to bid so low on a job that all I do is run about as much money into the bank account as I spend on a project. One little time and/or cost hiccup on those kinds of jobs can sink you. There will always be someone who will cut corners to underbid you.

LoweJ82
08-25-2011, 11:06 AM
I don't mark up above retail however I do use my discounts and charge what the retailer charges and sometimes if needed I can drop the price just below retail to get a job. Some places I get 30% off what the typical HO can get it for even if its already marked down to 50% off. If I really like the HO and the aren't cheap ppl who will pay the proper price of a install I will pass along the discount but not very often does this happen.

masonenterprises
08-25-2011, 01:08 PM
I think this guy is a legit business with ins. and license and what not, but I think he must not do much install work. He must be mowing like 40 hours a week so theres no materials involved. If he were doing install and design work all week long, there would be lots of materials traveling from place to place. You have to make a profit to cover your employees pay and fuel for sure. Diesel isn't free, not in this part of Connecticut anyway. I dont know about where he is.

THEGOLDPRO
08-25-2011, 02:18 PM
I think this guy is a legit business with ins. and license and what not, but I think he must not do much install work. He must be mowing like 40 hours a week so theres no materials involved. If he were doing install and design work all week long, there would be lots of materials traveling from place to place. You have to make a profit to cover your employees pay and fuel for sure. Diesel isn't free, not in this part of Connecticut anyway. I dont know about where he is.

I do plenty of install work throughout the year i just don't see the need to mark up materials, Its true 90% of my business is mowing based but that does not change the fact, i dont believe in robbing people. I have been doing this for 10 years and it has worked out pretty good for me so far. And im not going to change now.

For the people who cry and say how do you pay for the phone,gas,insurance,time,etc, Thats all part of doing business. you need to drive around,burn some gas,use the phone to secure work. You make your money on the job not marking up materials.

And i live and work in Southbury CT mason.

ny scaper
08-25-2011, 02:20 PM
So, those who don't.....have the costs associated with securing these materials included in their hourly rate or labor charge?

For example....Let's say it takes 30minutes to get to your material supplier. It takes another 30 minutes to mill around and get loaded. It takes another 30minutes to get to your customer's home.

If you don't mark up materials, do you charge your hourly rate for that time? How do you recover these COSTS? Is your time worth nothing? Your fuel expense? Your vehicle wear and tear?


I charge hourly rate rather than mark up. works for me to cover my expenses.

Cam.at.Heritage
08-25-2011, 04:37 PM
Yes I think charging a delivery fee is the way to go rather then just marking things up 50%. And if you can't pick it up yourself then at least you have covered the cost of having someone else deliver it for you.

vencops
08-25-2011, 05:26 PM
I charge hourly rate rather than mark up. works for me to cover my expenses.


If you're getting your hourly rate, while you're securing materials....good for you. You're probably making more than I am (with my mark-up on materials).

If you're not getting your hourly rate (while securing materials), your hourly rate just went down.

A "fair" price for goods and services is = what I charge my customers and what they're willing to pay. Market and customer service sets prices.

masonenterprises
08-25-2011, 06:12 PM
I do plenty of install work throughout the year i just don't see the need to mark up materials, Its true 90% of my business is mowing based but that does not change the fact, i dont believe in robbing people. I have been doing this for 10 years and it has worked out pretty good for me so far. And im not going to change now.

For the people who cry and say how do you pay for the phone,gas,insurance,time,etc, Thats all part of doing business. you need to drive around,burn some gas,use the phone to secure work. You make your money on the job not marking up materials.

And i live and work in Southbury CT mason.



Thats cool. Sometimes i wish i could mow that much itd be less stressful. Im on the opposite side of that spectrum, probably 90% install and 10% mowing. If your system works good for you then keep it up. CT is a tough market. Anyway, do you think that the other tradesmen are robbing people? Its just crazy because EVERY other field marks up parts. Electricians, HVAC, plumbers, automotive, etc. They buy the stuff at wholesale prices. Its a given fact.

THEGOLDPRO
08-25-2011, 06:45 PM
Oh i know, I do believe all of the other trades are robbing people, My mechanic used to mark parts up so high i would almost puke in my mouth when he told me the prices. Before i ditched him and went with a less shady/less scumbag-ish mechanic i would find out what was wrong with the truck and order the parts myself and drop them off for the mechanic to change. It used to piss him off because he knew he wasn't making all the money on the mark ups.

2 weeks ago i had an electrical short in one of my trucks and it kept popping the brake light fuse, they found the short and repaired it, When i showed up to pay for it i noticed they tried to charge me 15 bucks for a 20 amp fuse, I took a new 50 cent fuse out of my truck handed it to him and told him to take the 15 bucks off the bill.

masonenterprises
08-26-2011, 09:22 AM
Oh i know, I do believe all of the other trades are robbing people, My mechanic used to mark parts up so high i would almost puke in my mouth when he told me the prices. Before i ditched him and went with a less shady/less scumbag-ish mechanic i would find out what was wrong with the truck and order the parts myself and drop them off for the mechanic to change. It used to piss him off because he knew he wasn't making all the money on the mark ups.

2 weeks ago i had an electrical short in one of my trucks and it kept popping the brake light fuse, they found the short and repaired it, When i showed up to pay for it i noticed they tried to charge me 15 bucks for a 20 amp fuse, I took a new 50 cent fuse out of my truck handed it to him and told him to take the 15 bucks off the bill.

Haha man you are living in the wrong state! CT is hands down the most marked up and expensive state in the US. EVERYTHING is marked up. Quite a bit. Food, clothes, lawnmowers, parts, gas. Its crazy to think all these thieves robbing us to make a profit! It would be awesome if we could buy everything at cost. How much easier the world would be, not to mention affordable!

ny scaper
08-26-2011, 09:39 AM
If you're getting your hourly rate, while you're securing materials....good for you. You're probably making more than I am (with my mark-up on materials).

If you're not getting your hourly rate (while securing materials), your hourly rate just went down.

A "fair" price for goods and services is = what I charge my customers and what they're willing to pay. Market and customer service sets prices.

My overhead is not what most's is so my hourly rate may be a little lower, although not "lowballing" by any means. It all evens out in the end. It costs me more securing materials in gas, etc... than at the actual site working with my own two hands. So when I explain this to the HO, they usually understand where I'm coming from.

AI Inc
08-26-2011, 11:07 AM
Sorry boys, but if your not marking up material, you dont have a business , you have a job.

MMADDUX
08-26-2011, 11:47 AM
I don't mark up materials because i'm not a scum bag. If i get mulch for $20per yard the customer gets it for $20per yard.

I make my money on the install not the materials. If you price a job correctly you don't have to mark materials up like a scum bag to make extra money that you didn't earn.

In my opinion people who mark materials up are thieves, And scum bags, That's just my opinion tho. i'm sure the scum bags will come on here and defend them selves for marking up materials for no good reason other then to rob people.


Great post. What I think also.



Anyway, I charge to pick up supplies and materials. Don't think that is just a cost of business. It doesn't work that way.:nono:

MDLawn
08-26-2011, 03:44 PM
A "fair" price for goods and services is = what I charge my customers and what they're willing to pay. Market and customer service sets prices.

Sorry boys, but if your not marking up material, you dont have a business , you have a job.

These two statements are the things that have been on my mind recently and I completely agree with them. Some may know already that I plan on leaving my part time business for more family time but these statements got the blood boiling. I always get tired of hearing about "ripping off" customers. If they are willing to pay it then how is it ripping them off? Many auto repair shops get a bad rap because people NEED their cars for everyday life. When it breaks they need it fixed now so they can get back to their lives. If you dont want to pay what a repair shop wants then go learn and fix your cars yourself. Don't have the first clue on auto repair, no time to do it, or just to lazy to do it? Then you are paying a professional for the convenience of having them get dirty, use expensive tools, and use their knowledge to get you back on the road. Just like someone pays for the "want" of having a lawn mowed and landscaping done. But it all comes down to people need their cars. Cars breakdown and need repair, the bill is high, people whine because they HAVE TO pay it for the convenience of being able to drive their car again because if they dont they cannot get back on the road. Same thing with home impovement projects. Many people can't and shouldn't do it themselves, don't have the time, or are just too lazy. Lucky contractors make a good buck to give people what they want. Basic Lawn and Landscaping tasks can be done by most any consumer hence they feel "ripped off" when they get a bill.

For lawn care and landscaping there is no book that says you are ripping people off if you charge $XXXX. If you complete quality work in an efficient manner and charge whatever you can get then good!. A few of the more successful people on this site that I have privately communicated with always tell me how they keep raising prices year after year without complaint. They do high quality work and are getting paid for it. Why not make some money?? Ripping off is doing garbage work and taking the money. Everyone seems so afraid to charge what they can get and just follow what the "other landscaper" charges. If someone thinks you are a rip off they will find a cheaper alternative and as long as you keep getting work then you are doing it right and making more than the other guy. If you cannot get work then you are too high for your market. Plus this work isnt in any form easy on the body. Young guys can go night and day, with age that just isnt the case.

Lawn and Landscaping used to be a luxury/convenience service which would demand high pricing. Now all my joe schmoe neighbors with 40'x100' lots, with a house on that square footage, get their lawns mowed?!? Why?, its so cheap now why not. For $50-70/month you can have your lawn mowed. I'm ready to call these guys to mow my lawn, well not really.

Also when I ever gave a landscaping estimate I would list the work to be completed for just a single price. No splits with this costs this and that costs that and labor is this. Especially for residential. I had a few ask me to break it down and I did, some walked others stayed with it. Too many guys/gals on here have good intentions but let customers just beat on them until they fold and give such cheap prices instead of selling the service and if needed walking away.

Sorry for this BS rant but it is what it is.

masonenterprises
08-26-2011, 06:01 PM
Hahah I dont even understand why this is being debated. Do you grow your own food? Do you make your own shoes? Sew your own shirts? Manufacture your own parts? No. Someone else probably did. And chances are they made a profit off of you by marking it up. Free enterprise is what makes America great!

MDLawn
08-26-2011, 08:09 PM
Hahah I dont even understand why this is being debated. Do you grow your own food? Do you make your own shoes? Sew your own shirts? Manufacture your own parts? No. Someone else probably did. And chances are they made a profit off of you by marking it up. Free enterprise is what makes America great!

This was along what I was trying to get at in my post. I just said too much!
Posted via Mobile Device

ron mexico75
08-26-2011, 08:18 PM
These two statements are the things that have been on my mind recently and I completely agree with them. Some may know already that I plan on leaving my part time business for more family time but these statements got the blood boiling. I always get tired of hearing about "ripping off" customers. If they are willing to pay it then how is it ripping them off? Many auto repair shops get a bad rap because people NEED their cars for everyday life. When it breaks they need it fixed now so they can get back to their lives. If you dont want to pay what a repair shop wants then go learn and fix your cars yourself. Don't have the first clue on auto repair, no time to do it, or just to lazy to do it? Then you are paying a professional for the convenience of having them get dirty, use expensive tools, and use their knowledge to get you back on the road. Just like someone pays for the "want" of having a lawn mowed and landscaping done. But it all comes down to people need their cars. Cars breakdown and need repair, the bill is high, people whine because they HAVE TO pay it for the convenience of being able to drive their car again because if they dont they cannot get back on the road. Same thing with home impovement projects. Many people can't and shouldn't do it themselves, don't have the time, or are just too lazy. Lucky contractors make a good buck to give people what they want. Basic Lawn and Landscaping tasks can be done by most any consumer hence they feel "ripped off" when they get a bill.

For lawn care and landscaping there is no book that says you are ripping people off if you charge $XXXX. If you complete quality work in an efficient manner and charge whatever you can get then good!. A few of the more successful people on this site that I have privately communicated with always tell me how they keep raising prices year after year without complaint. They do high quality work and are getting paid for it. Why not make some money?? Ripping off is doing garbage work and taking the money. Everyone seems so afraid to charge what they can get and just follow what the "other landscaper" charges. If someone thinks you are a rip off they will find a cheaper alternative and as long as you keep getting work then you are doing it right and making more than the other guy. If you cannot get work then you are too high for your market. Plus this work isnt in any form easy on the body. Young guys can go night and day, with age that just isnt the case.

Lawn and Landscaping used to be a luxury/convenience service which would demand high pricing. Now all my joe schmoe neighbors with 40'x100' lots, with a house on that square footage, get their lawns mowed?!? Why?, its so cheap now why not. For $50-70/month you can have your lawn mowed. I'm ready to call these guys to mow my lawn, well not really.

Also when I ever gave a landscaping estimate I would list the work to be completed for just a single price. No splits with this costs this and that costs that and labor is this. Especially for residential. I had a few ask me to break it down and I did, some walked others stayed with it. Too many guys/gals on here have good intentions but let customers just beat on them until they fold and give such cheap prices instead of selling the service and if needed walking away.

Sorry for this BS rant but it is what it is.

VERY good post....you're a smart man.

MDLawn
08-26-2011, 11:37 PM
Ok here is another scenario with and without price markups. For EXAMPLE lets say 2 contractors came in with the same estimated job price for:

8 hour clean up job
5 yards mulch ($20 contractor, $40 consumer)


Contractor "A" estimates his job the following way

$100/hr labor
$20/yard mulch (contractor price)

Total Job = $900


Contractor "B" estimates his job the following way

$87.50/hr labor
$40/yard mulch (price mark up)

Total Job = $900


Um......I don't see much difference in the way the job was priced out. You can slice the pie anyway you like....it's still a pie.
But contractor "B" must be a crook :hammerhead:

Lets say both contractors labor rate was the same but contractor "B" still marked up materials but sold the job better and the customer agreed to the higher price because of the companies reputation, referral, better job selling, etc... The customer agreed so how would that be "ripping off"???

Ripping off would be not giving the customer all that was included in the estimated job and still charging them the entire price.

People only feel ripped off in a few ways

-They need to have the work done, as in the auto example, and must pay
-They find out the could have done it themselves
-They see the equipment (trucks, mowers, skidsteers, etc..) a contractor uses and thinks they are "rich" because they own all this stuff. (Envy)
-Someone else tells them what they paid with a different contractor, after the work is completed.

These have nothing to do with the contractor, the consumer made these choices or inferences.


You want a rip off story. There was a plowing company around my neck of the woods that took something like $100,000+ in yearly contract money from hundreds of residents and did not plow their driveways during the first few snow storms. I can't remember how it worked out but that is ripping off. Money paid and work not completed as promised.


Are certain cars or motorcycles "rip offs" because you pay for a brand name? Guess what, people pay for it because they like and want it. Until consumers are unwilling to pay a price, the stuff continues to sell.

If your company was in such high demand that you could keep upping your prices and still keep growing wouldn't you? Maybe it allows you to now pay your employees better wages, employ more people to reduce workloads on current employees, give them health care, give paid vacations, have better equipment to keep employees or yourself healthier. It's not always about the greedy contractor.

And why is it sooo shameful for someone reap the rewards for the risk and investment they made to start a business?

vencops
08-27-2011, 12:32 AM
If you're not marking up your materials (or, charging for your securing them), you remind me of these guys.......

http://www.hulu.com/watch/4253/saturday-night-live-first-citywide-change-bank-2

rywnygc
08-27-2011, 08:01 PM
You want a rip off story. There was a plowing company around my neck of the woods that took something like $100,000+ in yearly contract money from hundreds of residents and did not plow their driveways during the first few snow storms. I can't remember how it worked out but that is ripping off. Money paid and work not completed as promised.

Good ol' Extreme plowing. Too many customers, not enough trucks. I picked up 9 of their customers after that. I use them as an example every time I am selling plowing.

MDLawn
08-27-2011, 11:21 PM
Good ol' Extreme plowing. Too many customers, not enough trucks. I picked up 9 of their customers after that. I use them as an example every time I am selling plowing.

Whatever happened with them? How did it end up? Do you know?

rywnygc
08-28-2011, 09:09 AM
All I heard is that he used the money to buy like 6 brand new trucks. He was ordered to sell off everything and pay back the customers within like 90 days (don't quote me on the time frame) or he would be doing time.

MDLawn
08-28-2011, 09:30 AM
New trucks for plowing or personal?? Either way how dumb could you be thinking it would work out.
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rywnygc
08-28-2011, 09:50 AM
I think they were just trying to have a big boy fleet with shiny new trucks. They had over 400 customers that didn't get service, which means there were more who did get service. They advertised in valpack and got great response, so I bet they had 600+ customers. I don't care how good you are, you cant do that many accounts. The best guy I know does 60 drives and 4 medium size lots on his own. He has been plowing for like 40 years and has a great system.

rywnygc
08-28-2011, 09:58 AM
Back to the topic though. As far as mulch goes, I was charging retail and adding labor. Well that didn't work out, because I lost money if it took longer and a few people argued with me about the cost when I finished in less than quoted time. I now charge a set rate for mulch with a minimum of 75 per yard. This includes the cost, delivery, prep, trimming, edging and spreading. If there are a lot of weeds or the area is not easily accessible I charge more. The most I have charged is 90 per yard. TO MAKE IT CLEAR THOUGH, I don't charge labor on top of that.

My wife works in the office of a garage door company and they mark up 300% on all material and then add labor. She is always complaining about me not marking up material (plants, stone, boulders, etc...). I finally told her that I wont be doing it and that is that. She grumbles about it sometimes but doesn't argue anymore.

PerfectEarth
08-28-2011, 12:18 PM
Unreal. Am I reading some of this correctly?

I'd venture a guess and say 100% of my customers KNOW for a fact that I mark up materials. Hell, I"ll even tell them and they GET IT!!!!!! THIS IS BUSINESS! hahahahahahaha, wow, GoldPro... you have really thrown me for a loop in this thread. You must have found a way to purchase all your personal and business assets at manufacturer costs.

We (well, hopefully most of us) are professional landscape CONTRACTORS. Available to us, are these great suppliers called "wholesalers" where we can buy products and and in turn, SELL them to our customers. Do we need to explain these very basic economic principals?

It has absolutely ZERO to do with being a scumbag ripoff artist. Easy example- You obviously don't charge 45.00 for a KnockOut Rose that the customer can buy for 29.00. You buy it at 16.00 (and the nursery made some money off that too.....OMG!!! the horror!) and price it to the customer at, say 24.00... amazing! a win-win for everyone.

Customers like to see estimates and pricing with labor cost and material cost. Very simple. Keep it fair and competitive on both ends. Do you ask the restaurant what your steak cost off the truck??

If you are simply passing along exact costs for your materials purchased at wholesale cost, you are missing the boat. OR...... just charging too much labor to make up the difference? Sounds scumbaggish to me.

PerfectEarth
08-28-2011, 12:31 PM
I don't understand how people can put on huge mark ups on items.... why wouldn't the homeowner just buy it themselves and have you install it?

So the homeowner is going to spend their time tracking down, pricing, selecting, and arranging/picking up numerous shrubs, 400 lb trees, a couple tons of soil, yards of rock and stone, pallets of mulch...etc etc etc???? Sounds efficient.

This is why we do what we do with the resources (wholesalers) and equipment (big trucks and trailers) we have. To provide these services as a package and make money. And so Mr. and Mrs. Jones can take the kids to Disney while we work on their property. You guys must have the wrong customers!

lukemelo216
08-28-2011, 12:52 PM
agreed. We get our materials at wholesale cost and we mark them up enough so we are either at or maybe just below retail price, and were still making money. Then you charge a fair labor rate and your good to go. The reason whyt people feel there getting ripped off is becasue everyone believes they need to be charging 75-100/hr for labor. Thats where the ripoff is. Most business average operational rate is about 25-32/hr and they are charging something like 75/hr thats anywhere from 300-312% profit which is whats a rip off. Our average mu on materials is 20-30% and average mu on labor is 30-35% and we make a fine profit and never get complaints from our customers about the rates where charging.

if customers are saying there getting ripped off becasue of the amount of time, we explain to them that there is not only direct labor charges figured into the estimate, but theres also indirect for picking up mulch or nursery stock etc.

MDLawn
08-28-2011, 02:07 PM
Lukemelo- just for clarification. If you operate at $32/hr and mark up 30% its roughly $42/hr. Assuming this is a per man hour rate you would be at $126/hr with a job using 3 men or $84 with 2 men. Or are you charging $42/hr using unlimited workers? Correct me if I'm wrong but you would be in that range that's so devious. Unless you are saying people charge $100 per man.
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masonenterprises
08-28-2011, 02:17 PM
Unreal. Am I reading some of this correctly?

I'd venture a guess and say 100% of my customers KNOW for a fact that I mark up materials. Hell, I"ll even tell them and they GET IT!!!!!! THIS IS BUSINESS! hahahahahahaha, wow, GoldPro... you have really thrown me for a loop in this thread. You must have found a way to purchase all your personal and business assets at manufacturer costs.

We (well, hopefully most of us) are professional landscape CONTRACTORS. Available to us, are these great suppliers called "wholesalers" where we can buy products and and in turn, SELL them to our customers. Do we need to explain these very basic economic principals?

It has absolutely ZERO to do with being a scumbag ripoff artist. Easy example- You obviously don't charge 45.00 for a KnockOut Rose that the customer can buy for 29.00. You buy it at 16.00 (and the nursery made some money off that too.....OMG!!! the horror!) and price it to the customer at, say 24.00... amazing! a win-win for everyone.

Customers like to see estimates and pricing with labor cost and material cost. Very simple. Keep it fair and competitive on both ends. Do you ask the restaurant what your steak cost off the truck??

If you are simply passing along exact costs for your materials purchased at wholesale cost, you are missing the boat. OR...... just charging too much labor to make up the difference? Sounds scumbaggish to me.

Mowing is 90% of his business. So the only mark up he sees is on the parts and labor that goes into the mowers and blowers he uses. Obviously he would have a different opnion if he we're doing 90% install work.

lukemelo216
08-28-2011, 02:29 PM
im saying the people that are charging 100 per man. not to many on here are that high, maybe 1 or 2 somewhere, but i personally think they are bluffing. but there are a lot of people charging in the range of about 75/man hour.

Im not going to state my operational costs on here, but for example yes, if I was running my business at $32/hour and I am marking up 30% say, yes I would be charging more or less $42/man hour. I do everything based on man hours, not total hours. Yes a job that will take a 2 man crew 3 hours to complete is going to be billed $252 either way but in my experience people would rather see that 6 labor hours at $42/hr vs 3 labor hours at $84.00

Majoriy of landscaping work should fall in the range of about $35-45/hour. Suddenly becasue of a fall cleanup people need to charge $75-80/hour, doesnt make sense to me really. That sounds like a ripoff vs markign up materials you get at a wholesale cost.

MDLawn
08-28-2011, 02:35 PM
I'm in agreement with you (lukemelo) and I think we share some of the same ideas on this but a few different also. Makes the world go round.
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PerfectEarth
08-28-2011, 02:37 PM
Mowing is 90% of his business. So the only mark up he sees is on the parts and labor that goes into the mowers and blowers he uses. Obviously he would have a different opnion if he we're doing 90% install work.

True. But I think Ben still buys a lot of mulch in the Spring... If he buys it at 20, there is no harm in selling at 30-34 or something and making some material money (or including that in 'per yard installed' or whatever the pricing is) and in effect, still saving the customer on product they could obviously get themselves.

I look at it this way- a single 18-21" Boxwood, for example.

It starts as a simple cutting and through years of growth from liner production to field grower- to broker- to wholesaler- to contractor- to end customer... that one plant has changed hands a lot. It has been cared for, pruned, fertilized, shaped, dug, balled, transported, unloaded, watered, moved, delivered, installed, maintained, etc.... that's a lot of steps! And at each transfer, someone gets paid for their work and with the goal of making some money. From a 1.75 liner, to 15.00, to 32.00 to 45.00.... just like most ingredients, components, parts, and materials we use and see everyday.

It shouldn't stop at us. We are the last sale. And thru our informed and careful dealings with customers, we deserve to get paid for properly designing for that plant, selecting it based on good health, size, and structure, transporting it with care, and installing it properly. it's more than basic labor. You need to make fair money on materials.

masonenterprises
08-28-2011, 04:55 PM
True. But I think Ben still buys a lot of mulch in the Spring... If he buys it at 20, there is no harm in selling at 30-34 or something and making some material money (or including that in 'per yard installed' or whatever the pricing is) and in effect, still saving the customer on product they could obviously get themselves.

I look at it this way- a single 18-21" Boxwood, for example.

It starts as a simple cutting and through years of growth from liner production to field grower- to broker- to wholesaler- to contractor- to end customer... that one plant has changed hands a lot. It has been cared for, pruned, fertilized, shaped, dug, balled, transported, unloaded, watered, moved, delivered, installed, maintained, etc.... that's a lot of steps! And at each transfer, someone gets paid for their work and with the goal of making some money. From a 1.75 liner, to 15.00, to 32.00 to 45.00.... just like most ingredients, components, parts, and materials we use and see everyday.



It shouldn't stop at us. We are the last sale. And thru our informed and careful dealings with customers, we deserve to get paid for properly designing for that plant, selecting it based on good health, size, and structure, transporting it with care, and installing it properly. it's more than basic labor. You need to make fair money on materials.


I totally agree. Thats the point I was getting to with him. With my previous post about growing your own food and etc. Everybody is making a profit. Why should the buck stop at us.

AI Inc
08-29-2011, 07:30 AM
I totally agree. Thats the point I was getting to with him. With my previous post about growing your own food and etc. Everybody is making a profit. Why should the buck stop at us.

It shouldn't , and cant if ya want to stay in business.

Lawn Pawn
09-12-2011, 04:28 PM
Nothing makes a difference regarding marking up this that or not. There is no right or wrong if it works for you.

What do you need for profit, how do you get it and where will it come from. It's about marketing, and it's tough to figure out.

It is perceived value... as your customer decides what's in it for them, and to convince them to give their money to you.

If I had these answers I'd be rich.

Darryl G
09-24-2011, 08:34 PM
I don't mark up materials because i'm not a scum bag. If i get mulch for $20per yard the customer gets it for $20per yard.

I make my money on the install not the materials. If you price a job correctly you don't have to mark materials up like a scum bag to make extra money that you didn't earn.

In my opinion people who mark materials up are thieves, And scum bags, That's just my opinion tho. i'm sure the scum bags will come on here and defend them selves for marking up materials for no good reason other then to rob people.

LOL. I think people who don't mark up materials are idiots. You have to schedule the pickup, pick it up, pay for it and wait to get paid for it, typically. Unless you get an advance from your customer to cover it anyway. Think of it as a handling fee. If I get something at wholesale, I mark it up to retail. Why should the customer pay less than they would pay themselves?

Patriot Services
09-24-2011, 08:42 PM
Then you have to justify why you are making between 40~75 dollars a man hour to install these products you just gave them at cost. I stand by my time tested practice of one price all inclusive. I've never done a job on a per hour basis.
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Florida Gardener
09-24-2011, 09:00 PM
LOL. I think people who don't mark up materials are idiots. You have to schedule the pickup, pick it up, pay for it and wait to get paid for it, typically. Unless you get an advance from your customer to cover it anyway. Think of it as a handling fee. If I get something at wholesale, I mark it up to retail. Why should the customer pay less than they would pay themselves?

Yea, really. I charge the customer for plants what they would pay retail. Then I charge $35/MH for installation. I also add in delivery fees and what not. Nobody is getting ripped off. The consumer pays retail anyways.

vencops
09-24-2011, 09:47 PM
Whether your customer sees the breakdown or not, the costs charged are real to your books.

I give a breakdown, when asked to provide it. I don't as SOP. Either way, materials are marked up to cover my costs to secure them.

Darryl G
09-25-2011, 12:19 AM
Then you have to justify why you are making between 40~75 dollars a man hour to install these products you just gave them at cost. I stand by my time tested practice of one price all inclusive. I've never done a job on a per hour basis.
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But you're building a markup on materials into your lump sum pricing, right?

Patriot Services
09-25-2011, 06:10 AM
But you're building a markup on materials into your lump sum pricing, right?

Oh hell yes. As mentioned before a built in "handling and procurement charge".
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Florida Gardener
09-25-2011, 09:36 AM
The material markup is to cover the cost if you had to replace the plant which is giving the customer a warranty and to also make money which is why we are in business in the first place.
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RussellB
09-25-2011, 09:53 AM
One way or another you charge a mark up or higher hourly rate. Comes out the same if you want to stay in business. For the person calling fellow businessmen scumbags for the way they do business, ah shucks.....never mind.
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ArenaLandscaping
09-25-2011, 10:04 AM
One way or another you charge a mark up or higher hourly rate. Comes out the same if you want to stay in business. For the person calling fellow businessmen scumbags for the way they do business, ah shucks.....never mind.
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I think the problem is that person only cuts lawns.

To say that your in business and you do not mark up materials means that you have alot to learn about business. Your in business to make money not lose it.

http://en.wikipedia.org/wiki/Markup_(business)
http://books.google.com/books?id=iv6SKu85cIUC&pg=PA601&dq=#v=onepage&q&f=false

Patriot Services
09-25-2011, 10:09 AM
I don't get the scumbag part either. You are not holding a gun to anybodys head. You charge what you can make money on. If its too high the customer will say no thanks or start the negotiation process. I still think half the people on here have no clue what their true business costs are.
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AI Inc
09-25-2011, 10:15 AM
I don't get the scumbag part either. You are not holding a gun to anybodys head. You charge what you can make money on. If its too high the customer will say no thanks or start the negotiation process. I still think half the people on here have no clue what their true business costs are.
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I wonder how many of them are in the threads titled " is there any money is this buss" , " how come my buss is struggleing" , " cant seem to get out of the hole" , " was voting for obama a mistake"

DiSantolandscaping
09-25-2011, 11:39 AM
the whole point that i was asking all along is, if it cost me 20 bucks for a plant, i add 30 % to that. That makes it like 26 bucks, plus i charge 35 mhr to install plants. I just wanted to know if i was doing the right thing becasue half the people in here said i was wrong for doing it. but i also work at a auto parts store, and they mark all there parts up 30% that they sell to customers, same with mechanics, and even our local dealers for supplies, and tools. I havnt had a customer complain yet because i marked the plants up, they just look at it as they didnt have to take the time to go find the right plants, the right size, shape and color.

Patriot Services
09-25-2011, 11:50 AM
the whole point that i was asking all along is, if it cost me 20 bucks for a plant, i add 30 % to that. That makes it like 26 bucks, plus i charge 35 mhr to install plants. I just wanted to know if i was doing the right thing becasue half the people in here said i was wrong for doing it. but i also work at a auto parts store, and they mark all there parts up 30% that they sell to customers, same with mechanics, and even our local dealers for supplies, and tools. I havnt had a customer complain yet because i marked the plants up, they just look at it as they didnt have to take the time to go find the right plants, the right size, shape and color.

Yup you are doing it right. If you are turning a profit for YOU then its correct. Any industry that uses materials marks them up, whether it is admitted to or not.
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