Mark-up on sub-contracting

Discussion in 'Lawn Mowing' started by redoak77, Nov 4, 2007.

  1. redoak77

    redoak77 LawnSite Senior Member
    Posts: 291

    How much do you guys mark up chemical services that you sub out?
     
  2. chuck bow

    chuck bow LawnSite Senior Member
    Posts: 701

    At least 15% sometimes more , my fert and squirt company gives me a great deal .Plus client doesnt have to deal with any part of scheduling to paying another bill .
     
  3. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    Subs are paid out at 80% of contract price. We never mark-up a contract due to subs, though. That isn't this best practice in my book. JMO.
     
  4. chuck bow

    chuck bow LawnSite Senior Member
    Posts: 701

    So are you saying you dont make any money subbing work out ( going thru the hassels of quoting scheduling ect) or are you saying you make 20% when yousay you pay at 80%
     
  5. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    I'm saying that we make 20% and pay out 80%. I used to take a subs bid and mark it up, but after a few years in business that practice caught up with me too many times, so now I set my own prices and pay a sub out at 80%. I will not allow a sub to bid a project that I will be putting my name on. My company...my bid. Then I'll call one of our subs and say "I got this job for you. It pays out $_____, do you want to go look at it?" There is a mutual understanding that the sub will never solicit the job and if he does, which hasn't happened in a while, we never deal with him again.
     
  6. gene gls

    gene gls LawnSite Gold Member
    Posts: 3,213

    I sub out all my fert and I get a 7% markup.
     
  7. DuraCutter

    DuraCutter LawnSite Senior Member
    Posts: 806

    Check your numbers, such a low markup may be costing you money. You may not realize that "you" or your company is responsible for the work that sub does and 7% is not even worth the risk.

    20% and up is the only way to go. That way, if something goes wrong and your sub bails, you have a cushion to fall on. We often charge 50% over subs for just that reason.

    It's a business and it needs real profits for risk management.

    :)
     
  8. JimLewis

    JimLewis LawnSite Fanatic
    Posts: 6,842

    You should almost always mark up work done by subs. I think 10%-30% is pretty standard for most services.

    The only time I don't mark up a sub-contractor's work is if I REALLY need his work in order to land a much larger job. For instance, I've given my concrete subcontractor 100% of the $900 I charged for installing a 8' x 8' hot tub pad because it allowed me to land the larger $15,900 job. And I felt that marking the hot tub pad up to $1100 or more would have made me seem a little too high on that portion of the bid. So although I didn't make anything off of that part of the job, just having someone to do it helped me land the larger job where I did make a good profit.

    Otherwise, we generally mark up work by subs 10-30%, depending on what it is.
     
  9. Envy Lawn Service

    Envy Lawn Service LawnSite Fanatic
    Posts: 11,062

    Anywhere from zero to as much margin as I can get while being fair and not hurting my subcontractor.

    I'm looking out for their best interests and seeing to it that they are being successful and profitable in their endeavors with me... which in turn helps me to be successful and profitable.
     

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