Is my price to low???

Discussion in 'Landscape Architecture and Design' started by southtx, Nov 22, 2007.

  1. Grass Happens

    Grass Happens LawnSite Senior Member
    Posts: 682

    I thought the mark-up is to cover transit and shipping, hence the 50% margin.
     
  2. nemow

    nemow LawnSite Senior Member
    Posts: 253

    Hoyboy I was told by my acountant that it was illegal to charge someone $40 for mulch if it only cost me $22. I can charge a fee of $18 for delivery or a fuel charge but I cant just resell someone elses product and lump it together and recharge and tax a customer for the same product. That is why I was asking. Maybe it is just a Taxachusetts thing. So last time you checked maybe you didn't check in Mass. Southtx that seems like a decent hours wage. We need to make $60 min. just to survive up here.
     
  3. southtx

    southtx LawnSite Member
    Posts: 156

    So can anyone see where I
     
  4. southtx

    southtx LawnSite Member
    Posts: 156

    Sorry about that...anyways what I was going to say was...is there anything or some where I can improve on what Im doing??? I have a job that Im getting numbers for and I want to make sure I get it. Its just a bed cleanup and mulch job but like I said I want to make sure I sale the job and also get it. As of right now Im looking at about 320.00 not include tax with about 93.20 worth of material....so I should be looking at 316 left over...this include 1.1/2 yards of mulch,4 bags dirt,4 flats of plant,4 of labor. Does this sound good or should I charge more...????
     
  5. The Right Tone

    The Right Tone LawnSite Member
    Posts: 9

    I think you're on the right track with your pricing. I think you needed to add some for the time to pick up the stuff and waiting in line. An A/C guy's minimum charge here in Nashville is $70 an hour with out freon then its $20 a lb for the freon, when my competition will go to someones house with more invested in his business than the A/C guy and only charge a pittance. I think your price was good but could have been better. Our industry needs to catch up to reality, try living on nothing. I am not going to. If I make out good on one job then I feel that justifies me spending countless hours doing my marketing, bidding against people with half or less than my knowledge, and people who bid low just to steal the business. You are doing right, Keep up the good work.
    www.LandscapeNashville.com
     
  6. PaperCutter

    PaperCutter LawnSite Bronze Member
    Posts: 1,938

    nemow, I'd get clarification from your accountant. I used to operate in MA and I've never heard that before. Basically, you're saying the gov't wants to tell you how to set your pricing- even for MA, that seems overly intrusive.
     
  7. LawnVet

    LawnVet LawnSite Member
    from SE MI
    Posts: 220

    I would look for a new accountant. When I first started in this business I went through a tax class. Granted, this is for the state of Michigan but the philosophy of double taxation and government price-setting is the same. You can charge whatever price you want for a product before or after tax. I pay tax to my suppliers - cuts down on my time spent on paperwork and finances and is easier to tell when I'm in compliance. If you already pay tax on the product it is illegal for you to charge tax to the customer...but you can increase the price of the product as much as you want and not add tax burden to yourself or your customer as long as you install the product. You are technically considered the end-user. I clarified that directly with our state's tax nazis. That should hold true in any state but you may want to call your Department of Treasury to be certain. I wouldn't take the accountant's word for it, though he should know I've found that they often assume things like that rather than know.

    southtex - the basic price-setting guidlines for us work this way:
    1. figure the total cost to you
    2. figure the time spent estimating, dealing with the client, picking up supplies
    3. figure the estimated time to complete (add 10-25% depending on potential hangups)
    4. multiply the total time spent by the $ amount you need per man hour to consider this a profitable venture.
    5. add the $/mhr total to the total cost to you (with your markup on costs - don't forget fuel and milage)
    This should give you a good number. I often bump the number up or down based on local market conditions. For instance, MI's economy is in the crapper so if I think a $ amount that is normal won't get me the job because the client can't afford it I may bump it down. Later, when I know I can get another job and charge a bit more I bump up. Some folks think this is "dirty business", but it is necessary when things are tough to pay your bills.

    Hope that ramble helps some folks out a bit.

    We got snow last night - wish I was still planting peonies! :usflag:
     
  8. huntemup

    huntemup LawnSite Member
    Posts: 35

    Whoa on that bean counter! No one has said that there is a diffrence between you buying your plants at wholesale and the selling them at retail.Flowers are about x2.Shrubs are x3.At least that what it works out around here.
     
  9. southtx

    southtx LawnSite Member
    Posts: 156

    thank yall for the information....
     
  10. KeystoneLawn&Landscaping

    KeystoneLawn&Landscaping LawnSite Senior Member
    Posts: 774

    LawnVet....here in PA if you increase the price of the product to a customer then you are not the end user! The customer is the end user. I know many contractors pay sales tax to their suppliers and then mark up the price and just include it in the cost of labor. I have a tax license, so I pay no tax to my suppliers. Then I mark up the materials and charge sales tax to the end user, the customer, based on that price. Yes, this does create more paper work for me, but its the correct way to handle the sales of merchandise.
     

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