Subcontractor Markup

Discussion in 'Bidding, Estimating and Pricing' started by Honest Lawn Care, Dec 9, 2018.

  1. Traveling Man

    Traveling Man LawnSite Member
    Messages: 179

    As a consumer I have no issue whatsoever with 10% mark-up. As others have said you are responsible for the quality of the work and your reputation suffers when your sub performs poorly. I assume you would pay your sub once he completes his work to your satisfaction. If so, your time is valuable since you have to schedule the sub, inspect the work, process the invoice, and then invoice the owner. These tasks are by no means difficult but they are extremely time consuming. If the project is $1000, with your 10% mark-up you get paid $100. What is that, an hours time and a tank of fuel? Certainly not unreasonable to me, I think even 15% mark-up would be appropriate depending on how difficult it is to schedule and meet with the sub to go over the scope.
    Honest Lawn Care and hort101 like this.
  2. OP
    Honest Lawn Care

    Honest Lawn Care LawnSite Member
    Messages: 4

    Traveling Man likes this.
  3. OP
    Honest Lawn Care

    Honest Lawn Care LawnSite Member
    Messages: 4

    I wanted to again thank you all for your opinions and advise.

    The tree work that was bid on is a lot of work. Some areas have pour access and tight working conditions. There are very heavy oak limbs overhanging the house as well as pool cage. One over the pull cage has started to push down on one of the roof screen panels. A good portion of this work will be slow and technical.

    The price for the tree work was discounted knowing that after this job the client wants to do trees around another house and a commercial building that they also own. They are an existing client of mine and I take care of their lawn and landscape maintenance. My sub and I came up with a fair price and then discounted it in hopes of getting the next two jobs. There is still enough money in it for us if we don't get the other two. I told her that she could get other bids on her own. She stated she did not but I do not know that for sure.

    As far as the mark up issue. I did explain to them what a sub mark up covers and they do understand and they should because they run there own medical practice (one is a doctor). They just don't like it and want a cheaper price as some of you have said, but doesn't everybody? When I go to the doctor I would like a better price as well. I would have to assume that the mark up percentages they use are much higher than 10% across the board.

    I know I did the right honest thing I could do. I gave her a more than far price for the scope of work. When questioned about the bid price I became transparent and explained the price/markup. I told her that she could source her own bids to compare. I treat all my clients this way and that is why people want me to do work for them. It all about communication and building relationships. The price is the price. In the end she accepted the bid and we are doing the work to the very best of our abilities and going the extra mile as we always do.
    Traveling Man and hort101 like this.
  4. jonnyz37

    jonnyz37 LawnSite Senior Member
    Messages: 469

    When i sub out work, i explain that it will be my partner doing this job. Sometimes the billing goes thru me and sometimes thru my "partner". If it goes thru him, he adds in my cut and pays me himself. Either way, i never use the term sub. Its my partner.

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