Retail Mark ups

Discussion in 'Business Operations' started by Greenbrier, Nov 28, 2005.

  1. Greenbrier

    Greenbrier LawnSite Member
    Messages: 30

    I have set up a few wholesale accounts, and was wondering, "How much mark up should I put on these items"? I'm talking about perifieral items, edging strips, flower pots.....non mowing items. Some of the wholesale prices seem rather high. Should I just, "Sell the Job", and let the wholesale prices work for me by keeping the price down, or should I be sticking a 20,30-50% markup on each piece.

    What is the average retail mark up from wholesale?


  2. Az Gardener

    Az Gardener LawnSite Gold Member
    Messages: 3,899

    IMO it's a balance between what you need (minimum) and what you can get. Your volume will have a lot to do with it. And how you structure your pricing for bidding. I like to get my mark up and warranty and installed labor in a unit price for the plants, at the end of my bid I use line item called Dumping,Delivery and Supervision and that is where I collect for those items. I used to mark up my materials 30% because that was the mark-up needed in our old company. That was the number I started with in this company but found I wasn't making enough so I bumped it up to 55% and that seems to be working for me. Now when I do more volume don't think for a minute I am going to lower the rate. But I'm in a different market now. I don't bid against other Lco's My existing clients want something and I do it and send a bill for the most part. Occasionally someone wants a bid or a new client just starting with us needs some renovation work I provide a bid and thats the mark-up I use and rarely have a problem. I am not an accountant and don't spend a tremendous amount of time crunching numbers I try to apply some common sense and go from there. I do track my costs and labor so I can look back and use that information to tweak things.

    Here is a unit price example for a 5-Gal. plant
    COST wholesale 8.00
    WARRANTY 15% 1.20
    SUB TOTAL 9.20
    MARK-UP 1.55 14.26
    LABOR TO PLANT 15.00
    TOTAL 29.26
    This is what I need to make it, but I know I can get 35.00 for this plant no
    questions asked, so I charge 35.00

    Here is where I think people make mistakes
    Unit price for a 36' box tree
    Cost wholesale 375.00
    Warranty 15% 56.25
    Sub Total 431.25
    Mark Up 1.55 668.43
    Labor to plant 150.00
    Total 818.43
    Yes you should make about $300.00 to plant this tree and thats ok. Don't lower the price because you think it looks like too much $$ from 1 tree.
  3. MarcSmith

    MarcSmith LawnSite Fanatic
    Messages: 7,157

    I used a a quick rule of thumb. 3x the cost. so an 8 dollar plant would cost the client 24 bucks installed and warranted

    1x the plant is for the plant, 2 x is the labor and 3x is the warranty. It does get you in the ball park. for most things. Annuals are different better mark up, hard goods could be a bit less. If i was bidding on an install and I knew I was bidding against others..I price shopped for the best quality trees at the lowest price and used that price. I always loved the ones who said..."I can buy that plant for 1/2 of your price at Home Depot and have the warranty" My replay was. who's going to pick it up for you, and whose going to install it. and if it dies, whos going to dig it up and take it back and re install it again.....As always I was more than willing to do stuff like that, but it always ended up costing them more..:)
  4. Greenbrier

    Greenbrier LawnSite Member
    Messages: 30

    Great info, thanks guys.


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