Marking up qoutes from subs?

Discussion in 'Pesticide & Herbicide Application' started by guntruck, Mar 7, 2001.

  1. guntruck

    guntruck LawnSite Senior Member
    Posts: 527

    Well naturalawn is doing my pesticide and fert work this year. Hope it works out well, my question is for example, i just got a qoute from him for a complex for 1000$$ for 2 apps. Should i be marking this up to make any money? I dont want to make it too high, i did add like 20$ for my time calling him and arranging the estimate. Do you guys add a certain percentage to any subbed work?
     
  2. Ocutter

    Ocutter LawnSite Senior Member
    Posts: 314

    Let me ask you this, if the customer calls and asks you whats wrong with their lawn (for any problem) do you think $20 will cover the time spent calling them again? Probably not. Its tough to add a % onto fert. programs due to a tight market competition here. I did howeever add 15% to treework I subbed last year.

    Always look into the future and add on for any problems, even if there wont be any. Say an extra hr. or two.
     
  3. kutnkru

    kutnkru LawnSite Silver Member
    Posts: 2,662

    I tell those who sub for us that I want 10% of the gross sales for servicing our clients. I tried the best I could to have an idea what they actually charge, so that I would feel confident they werent out to screw me or make more of a profit off people like myself.

    I think that 10% is a fair price to be granted as a finders fee. I personally dont know of many people where a bid has been so close that 10% threw us out of the loop. If we are that close, someones got access to numbers somehow IMHO.

    Hope this helps.
    Kris
     
  4. Kent Lawns

    Kent Lawns LawnSite Senior Member
    from Midwest
    Posts: 870

    Most of the agreements I know of will have about a 20% profit for the mowing contractor.

    If you're not getting that, it's time to negotiate with your fert sub or start shopping.
     
  5. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    A group of sellers and contractors in a small market area on the east coast have a good working relationship that allows each company to specialize and excel in its own expertise. The various entities have set a figure of 7% for referral or subcontracting work. It could be a single large sale, as a new landscape, or a long term service, as subbing the chemical service. It is such a good relationship, because it is viewed in long-term perspective by the participants, no one worries about getting the shaft from another.

    The 7% was arrived at over time. It is not a bounty, reward, commission, kickback, etc. Just a way of making sure that those in the group get treated fairly for their time and knowledge. Ex: Customer calls out A to get estimate on lawn renovation. A can do job, but will take 4 man-days and $$ equipment rental. A knows B has equip & personnel to do job in 1.2 man-days, so he just refers customer to B, in fact will call B from property and set appointment time for B and client. Win, win - A did not waste his time that morning, B did not waste tons of $$ advertising his specialty to the public.

    Amazing how things can soar after an area moves past the `me vs. them`, `scrubs vs. pros` mentality. Some of these guys have been there for 30 yrs, others are the guys they trained into the industry who came to specialize in one area. Old timers actually set up and financed new ones so client base could have good source for all matters related to green industry. By cooperating like this, each business can advance in its specialty, and not be bogged down by capital outlays to keep and maintain equipment and personnel to provide a wide spectrum of services.
     
  6. guntruck

    guntruck LawnSite Senior Member
    Posts: 527

    Jim, i must say well said!! I totally agree with you 100% That is something i will keep in mind for the rest of my days.
     
  7. GroundKprs

    GroundKprs LawnSite Bronze Member
    Posts: 1,969

    OK Rich, keep it in mind for this year. If by Christmas, you are still gonna stay in the business, send me an email. Can try help to get you started - these guys are just an hour or so away from you!!!
     
  8. guntruck

    guntruck LawnSite Senior Member
    Posts: 527

    Hey Jim, im gonna tell you this, i dont mean to sound cocky but im determined to make this business fun as well as profitable for my brother and myself. What i am saying here is im gonna be in this business for years to come with countless success!!! So when i am able to get that information from you that would be great, sounds very good and im very excited!!!! Thank you again Jim.
     
  9. bob

    bob LawnSite Platinum Member
    from DE
    Posts: 4,254

    I subed out a large fert job to Chemlawn last year. I added 15% to the charge.
     
  10. Skookum

    Skookum LawnSite Senior Member
    Posts: 675

    I used TG/CL for a couple years as my apps sub. Since I did not have my license, I needed them to fullfill my ability to get the full service accounts. I use to only add $5.00 per app for mailing and billing purposes. On the small properties I was getting better than 15%, on the larger ones, it was like 4%. Way I seen it was I was getting paid premium price for my other work so trying to grab another few dollars per year on work I was not doing, was just not in my best interest at that moment in time. All I wanted was the other work and the sub helped secure this!

    Today, I use special subs for Snow, Trees, and Irrigation when it serves my best interest. I add 15-20% to their qoutes or billed work.
     

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