# Client supplied material = labor price jump....



## TBFGhost (Oct 9, 2008)

I have a client that asked for a patio door installtion amung other work I was performing.

I quoted her a price that included the door and labor. When she informed me that she went to her local yard and got the door herself(even tho we have yet to sign anything) I re-submitted my propsal with labor that jumped up $280 and sutracted the cost of the door. She asked why the labor jumped.... I told her that I tack on a small fee to materials to cover misc expenses and overhead, went into a little detail...

waiting to her back...

What would you do?


----------



## D.Foster (Sep 13, 2008)

TBFGhost said:


> I have a client that asked for a patio door installtion amung other work I was performing.
> 
> I quoted her a price that included the door and labor. When she informed me that she went to her local yard and got the door herself(even tho we have yet to sign anything) I re-submitted my propsal with labor that jumped up $280 and sutracted the cost of the door. She asked why the labor jumped.... I told her that I tack on a small fee to materials to cover misc expenses and overhead, went into a little detail...
> 
> ...


 Well it depends on if i like them or not.....:w00t:I tack on a labor cost if i have to go and get the door,or materials, i've never added labor cost if the door was brought to me.


----------



## Heritage (Mar 20, 2007)

It doesn't sound right.

I can break it down and interpret what you just said 10 different ways and in every instance it still wouldn't make any sense.

Don't get me wrong, you do what you do and I'm 100% confident that you do it very well, and it's your business...and all that good stuff.

I'm just saying, since you asked...One thing I hate above all else is someone insulting my intelligence, so putting myself in the HO's shoes...I'd feel you're insulting my intelligence and being backhanded.


----------



## Tom Struble (Mar 2, 2007)

why is it a problem,when he first bid it im sure he included the 280
in the price to buy the door,just because the ho got her own door
doesn't mean he has to eat the rest of the material and any running around for the install


----------



## Mellison (Aug 3, 2008)

I mark up materials but only when I provide them.
The mark, up in my case, is really a charge for procuring the material.
Your position, with all do respect, sounds a little off.


----------



## boman47k (Oct 13, 2006)

> I told her that I tack on a small fee to materials to cover misc expenses and overhead, went into a little detail...


waiting to her back...



Little confused here. If she has purchased the door (mat), what are you tacking a


> small fee


to?

Lets say you have to go get it, $280 seems on the high side, unless it is very far away.

I just don't think I would hold my breath on her calling back about the door installation.


----------



## TBFGhost (Oct 9, 2008)

tomstruble said:


> why is it a problem,when he first bid it im sure he included the 280
> in the price to buy the door,just because the ho got her own door
> doesn't mean he doesn't need to eat the rest of the material and any running around for the install


This is my line of thinking and

$280 comes out to 10% of the door cost, which is what I typically mark up materials. I just don't see why I should have to lower my prices b/c they want to start price shopping for doors. I even had to explain to them how to measure the door over the phone and he asked me to verify that it would fit. Now where in the world is it my job to teach the clients things like this. I of course said that without me being there in person to measure the door myself I cannot verify the correct size to order the door. I have a feeling that when I go over there tonight to discuss the addtional work and sign the form I will be asked to figure out what they need to order...

If I don't get it, I don't get it...


----------



## CarpenterRN (Dec 3, 2009)

I agree with the consensus. I would bill for the labor to install plus materials that the client isn't providing. 

If the client purchases the product, I don't mark it up. But now, the client guarantees that product and I only guarantee the workmanship of the installation. 

So if anything goes wrong with the product, i.e. manufacturing defect, then the client pays me, or someone else, to deal with the problem. If I provided it, then everything is covered during the warranty period.

So, I try to sell them on the fact that I warranty the product during my warranty period if I provide it, whether the manufacturer will or not.


----------



## TBFGhost (Oct 9, 2008)

Nope, didn't take the bid on the door. I am really thinking I want to make it so I don't do jobs where the avg homeowner supplies materials. The last job the homeownwer got a vanity and faucet. The vanity didn't work with the wall...had to shorten a drawer depth to keep it from hitting a shut-off and the faucet didn't fit the vanity. All where problems and caused delays...


----------



## TBFGhost (Oct 9, 2008)

...husband just called me back...says he understands what the charge is for and what it covers...I am headed over there now to maybe sign some papers...


----------



## boman47k (Oct 13, 2006)

Maybe suggest they get a refund on the door she bought and let you handle it from the get-go. The warranty situation might make them look at it differently since there is no savings involved with them supplying the door. In fact, considering the warranty situation, they gain by letting you purchase the mat's and them being warrantied by you, if I am reading this right.

Either way, good luck.

I thought the door was on site already.


----------



## Leo G (May 12, 2005)

If you were going to do the job and get the materials you would be adding a profit to the doors. I don't see why you should lose that profit because the HO wants to purchase the materials. The added money to the job will help offset some of the screw ups that will likely occur because of the supplied materials. No warranty is supplied with HO supplied materials.


----------



## curapa (Oct 8, 2007)

I have no problem with raising price for HO supplied materials. In most cases the materials are not right in either size, function or whatever else almost always ending up in delays. HO's wanting to purchase their own materials is usually a red flag for me to part ways early.


----------



## TBFGhost (Oct 9, 2008)

....I am sitting here with a signed contract and happy clients....or so they appear...and i dumped the door part of the contract....

When I went over there they were all set about signing the contract including the door, but we first went over what door they were ordering...first it was slightly undersized...no big deal, trim size up one size on the inside and a back-band on the outside to meet up with the siding and we are good to go. But now I see it is not a center hinge door, it is a slider...great now it doesn't come pre-hung, ready to install. I gotta built it...and my trim options are now changed around....

Now at this point I am looking for a nice way out....I can install doors, I have done it, but I am not a window/door guy and generally try to stay in my field. 

So now that I start raising all these flags with the door they picked out, I suggested that they contact their yard, have a rep talk to them and get them to come out and install the door or point them to a window/door guy. I told them I am not here to suck every dollar out of them I can and if I can show them the way to a better solution I will, even if that means its not me. A window/door guy who does this day in and out will be able to have all these answers off the top of his head and keep it smooth sailing for them. 

They were pleased, signed the contract for some more carpentry work and on our merry way we go....I think....

But I am glad I not dealing with the client supplied material, I should have said no at the start...


----------



## Five Star (Jan 15, 2009)

Ive been in this spot before, but only you know what you can or can not install, BUT

your leaving yrself and your customers open for 3rd opinions from others you dont know!

a slider patio door is usualy smaller RO than a Hinged door! Check your Measurements, Tell them its more $ for assembly And pop it in!

Its learning curve, Better learn now than Later :thumbsup:


----------



## TBFGhost (Oct 9, 2008)

I told myself that...not big deal right?

But at this point in time I just had a feeling that this was something I didn't want to pursue...


----------



## Five Star (Jan 15, 2009)

If this was 2 years ago id tell you to walk away,

But in todays world my motto is go for it whatta you got to lose its all labor, so you know it will take you a day!!! bang em for a few $ for assembly, you, see a slider is easier to put in than a frenchdoor, less adjustments, shimiming, etc.


----------



## Five Star (Jan 15, 2009)

Id go for it, treat this as a learning curve, and dont let a good easy job go to someone else,(Unless you want to give it to me):laughing:

the other guy will look like a hero even though you did more work in the rest of the house!! 

Do IT get the $ and move on!!

hows that for motovation :thumbsup:


----------



## ottagosoon (Nov 4, 2008)

It all depend on how you do you estimating for your jobs. If you always supply the materials, labor and your subs then mark it up, you can't have one of the items supplied with out an adjustment.

Materials----$1,000.00
Labor--------$1,000.00
Subs--------$1,000.00
Mark-up-----$1,500.00 which is you job profit to pay for you unrelated job cost (OVERHEAD)

Total job cost to Owner $$4,500.00
Now if after you submitted your proposal, the Owner said I'll supply the material. Well that would be $4,500 - 1,000 = 3,500 you're covered. You still have your $1,500 mark up. No need to raise the cost on the other items.

If you know in advance that the home Owner will supply the materials then,
Materials----$1,000.00
Labor--------$1,000.00
Subs--------$1,000.00
Mark-up-----$1,500.00 which is you job profit to pay for you unrelated job cost (OVERHEAD)

Total job cost to Owner $$4,500.00 subtract the material 1,000.00 and the new bid is $3,500.00 which still has the needed $1,500 mark up.

But remember that is in the perfect world. Say you install an Owners cabinet and there is a big scrape in the door you did not see until the owner saw it. If you used your cabinet supplier he may have sent you out another door without any cost. :w00t:The Owner cabinet supplier doesn't want to help you. Could be trouble.


----------



## Dave Renneck (Mar 3, 2010)

I don't quote materials and labor. Just give a flat price and I stick to it unless there are change orders.

If someone tells me they want to buy the door I just pull out the cost of the door and leave the markup in it. I've always considered material markup a money maker and I don't give it up if they want to cheap out and buy it themselves.

I'll bet she'll also want you to go and pick it up for free.


----------



## D.Foster (Sep 13, 2008)

It makes sense with the added info:thumbsup:


----------



## Fence & Deck (Jan 23, 2006)

ottagosoon said:


> It all depend on how you do you estimating for your jobs. If you always supply the materials, labor and your subs then mark it up, you can't have one of the items supplied with out an adjustment.
> 
> Materials----$1,000.00
> Labor--------$1,000.00
> ...


Exactly. The once in a blue moon that the homeowner supplies material I price it as if I'm marking up the material anyway.

If I price a job as above, I.E $1000 labour, 1000 material=$2000 +50% markup (to keep it simple) for a total of $3000, then I have $1000 in profit over a certain time period. A $3000 fence should take 2 days to do, so that means $500/day in profit. If the homeowner supplies the material and I don't mark it up, I now have only $500 in profit for the same 2 day job. Why do that?
By marking up the "phantom" material, I keep my margin the same, yet have no need to extend myself to purchase material.


----------



## eisert (Jan 31, 2009)

Personally, I never install homeowner purchased materials anymore. When a homeowner asks why, I tell them honestly that I have spent years in the business learning about and installing proper materials for each job. If somebody is not in the trades, how can they legitimately know what product is best suited for the job at hand? I can honestly say that I have never completed a job with homeowner suplied materials that went smoothly, so I just don't do it anymore. Period. But that is just me and my 2 cents.


----------



## jarvis design (May 6, 2008)

I put allowances in my quotes for things like cabinets, faucets, sinks, toilets, etc. If a customer decideds to supply their own, thats fine, I take out my cost (the allowance amount) out. However, I still base my overall profit on the supply of the above mentioned materials so I take out the cost and leave the profit margin in.

I had one job a couple of years ago where the customer wanted to supply all the fixtures, faucets, etc. It was about $8,000.00 worth of product. 
I charged them a $1000.00 to let them supply there own fixtures


----------



## custrel (Jun 30, 2009)

tomstruble said:


> why is it a problem,when he first bid it im sure he included the 280
> in the price to buy the door,just because the ho got her own door
> doesn't mean he has to eat the rest of the material and any running around for the install


As a HO I see a huge problem when I supply the materials and the labor jumps UP $280.

I'd have to wonder what other hidden costs or price increases I'm going to encounter.

"Oh, you want MITERED corners on your trim? That's another $100..."

"You want me to fill the nail holes with putty? That's $35 more... $65 if you supply the putty."


----------



## custrel (Jun 30, 2009)

jarvis design said:


> I had one job a couple of years ago where the customer wanted to supply all the fixtures, faucets, etc. It was about $8,000.00 worth of product.
> I charged them a $1000.00 to let them supply there own fixtures


Unless you have zero markup on your labor, that is effed up.

"Yeah go ahead and get your own materials for $8k, I'm going to charge you as though I supplied you with $10k worth of materials anyway."

:blink:


----------



## boman47k (Oct 13, 2006)

For the ones charging markup on mat's, even though they are supplied by ho, do you stand behind the mat's as though you had actually supplied them?


----------



## Willie T (Jan 29, 2009)

I'm puzzled about something.

You bid this job, and knew enough about the door and its price to throw in that _specific_ 10% mark-up, but you didn't know it was a slider? :shifty:


----------



## boman47k (Oct 13, 2006)

How many here are old enough to remember Mr. Haney on Green Acres? He was played by Pat Burcham. He was from somewhere around this area, Scottsboro, Alabama, I think. I haven't thought of him in a very long time.

http://en.wikipedia.org/wiki/Mr._Haney



For the one that do not remember Mr. Haney, back to your regular scheduled programming.


----------



## pinwheel (Dec 7, 2009)

Shawn Prentice said:


> I agree with the consensus. I would bill for the labor to install plus materials that the client isn't providing.
> 
> If the client purchases the product, I don't mark it up. But now, the client guarantees that product and I only guarantee the workmanship of the installation.
> 
> ...


That's pretty much how I handle it as well. I markup materials I sell & put on the job, but never turn down work, just because the client chooses to buy their flooring from another source. But I assume no responsibility for anything beyond my own workmanship & tell them so up front.

The original post reminds me of that commercial about the 2 little girls with the pony & the banker. "you didn't tell me I could have a real pony" Just seems like someone trying to get something for nothing & having no appreciation for the client choosing you to do their work.


----------



## TBFGhost (Oct 9, 2008)

Willie T said:


> I'm puzzled about something.
> 
> You bid this job, and knew enough about the door and its price to throw in that _specific_ 10% mark-up, but you didn't know it was a slider? :shifty:


 
Nope, It was supposed to be a center hinge padio door, they changed it to a slider when I got there...



pinwheel said:


> The original post reminds me of that commercial about the 2 little girls with the pony & the banker. "you didn't tell me I could have a real pony" Just seems like someone trying to get something for nothing & having no appreciation for the client choosing you to do their work.


I don't like working with client supplied materials...it leads to problems b/c they only do it b/c they are trying to save a few bucks here, which leads to them buying low quality crap that is a pain to install if it even fits right from the start. I just got a call from a guy who wants about 200 feet of crown install along with a BUTT load of corners, he wanted to supply the crown, I talked him out of it... another aspect is, what if you mess up...screw up the piece, who goes to get a new one? And now its not like you can quickly go out and get it, you have to find out where they got it. What is the piece is screwd up and the client blames you b/c he never noticed it when he got it...now what....

Customers buy finished products...not my labor...at least that is my goal...

you don't go to a car dealer, give them parts and say here are the parts, make me a car do ya?


----------



## jimmys (May 1, 2009)

We work in a semi-rural area. The local suppliers can't carry all the shiny stuff the magazines feature. So there are often times when ho wants to buy his goods online or in New Yawk or so forth. If it's an allowance item, no problem: the allowed amount leaves the margin intact for us. If it's not an allowance, do you just not permit the ho to supply the materials? 

Example might be a fancy door that was a plain door in the contract docs. If the ho does the product search, pays for the door, arranges and pays for shipping, and hold the warranty themselves, who gets the markup? We still need the markup to stay in business. So, the ho gets a credit change order for the COST of the plain door. They may squawk, but that's the only way you stay in business. I'm inclined to let the ho buy the stuff, with that understanding.

Jim


----------



## TBFGhost (Oct 9, 2008)

jimmys said:


> We work in a semi-rural area. The local suppliers can't carry all the shiny stuff the magazines feature. So there are often times when ho wants to buy his goods online or in New Yawk or so forth. If it's an allowance item, no problem: the allowed amount leaves the margin intact for us. If it's not an allowance, do you just not permit the ho to supply the materials?
> 
> Example might be a fancy door that was a plain door in the contract docs. If the ho does the product search, pays for the door, arranges and pays for shipping, and hold the warranty themselves, who gets the markup? We still need the markup to stay in business. So, the ho gets a credit change order for the COST of the plain door. They may squawk, but that's the only way you stay in business. I'm inclined to let the ho buy the stuff, with that understanding.
> 
> Jim


This is exactly at what I am getting at. Clients want a price break down and it been easy...materials and labor. The say it makes it easier to compair estimates. So now when the client buys all the materials...where do I put the mark-up? I put it under the only option left...labor....maybe I need to change around my invoices... anyone who does not mark-up material is loosing money that should be theirs...and is also screwing with the rest of us who understand the mark-up...

'Well contactor A doesn't mark-up his materials' That is an annoying line...

When I was in high school I worked at a body shop...35-50% mark-up on parts. my job was to take the cars apart, find ALL the damage and beef up the work order to include EVERY thing I could. The repairs came out perfect. We never stocked hardware, you always had to order any nuts/bolts/clips whatever for the car you needed from the dealer. 

That company is still around...and was around for 20 years prior to that.. insurance companys hated us, cheap clients didn't come it....we only worked on cars where the clients cared about their cars enough to want to job done right...that is where I am really trying to push to...but being as I just started I have to make concessions to keep busy.


----------



## boman47k (Oct 13, 2006)

> Customers buy finished products...not my labor...at least that is my goal...


Now I am really confused!


----------



## AustinDB (Sep 11, 2006)

someone brought up the point of a scratched kitchen cabinet door which makes a great point. If there are ANY problems w/ the doors/windows I get from my supplier, a quick email (and attached pict's if it's warranty replacement) and they contact the manufacturer and fix it. That's my cross to bear if it's my supplier and dealing with the HO to have take it back to the store where they purchased it from takes precious time. What about the times the HO finds a really cool _____ (fill in the blank) and it is more difficult to install-I prefer to not have to add additional labor after the fact but sometimes it has to be done.


----------



## DavidC (Feb 16, 2008)

jarvis design said:


> I put allowances in my quotes for things like cabinets, faucets, sinks, toilets, etc. If a customer decideds to supply their own, thats fine, I take out my cost (the allowance amount) out. However, I still base my overall profit on the supply of the above mentioned materials so I take out the cost and leave the profit margin in.
> 
> I had one job a couple of years ago where the customer wanted to supply all the fixtures, faucets, etc. It was about $8,000.00 worth of product.
> I charged them a $1000.00 to let them supply there own fixtures


This is the same as I would do. The point is, however you arrive at the bottom line you put in whatever it takes for you to take on the job. If the client wants to supply materials you deduct only your allowance for that item because you still have to cover your overhead and make a profit.

In my case materials are only marked up for profit, labor is geared to cover the overhead. When the client provides materials there is a disclaimer that they must be on site and in usable condition or extra charges will apply. Then we deduct the allowance amount via a change order.

Good Luck
Dave


----------



## boman47k (Oct 13, 2006)

Moving invoices----shellgame

Different mat, harder to install--------change order

Where to put markup on mat's furnished by ho------simple, the minus column.

I just cannot wrap my head around some of this. Yes there are problems, somtimes just par for the course. Maybe they should be figured into overhead as minor pia situations that will occur, hence already in your labor price.

As far as those of us that do not understand this concept hurting the ones that do, shouldn't this whole post be moved to the Hard Hat area?


----------



## TBFGhost (Oct 9, 2008)

boman47k said:


> Now I am really confused!


What is confusing about that? I have a goal to only provide finish products, not hey you go buy the material I will put it up. Would you bring your own potatos to McDonalds and ask them to make french fries?:no:


----------



## world llc (Dec 9, 2008)

you deserve the money to do the work, but it should have been already built into your price so your not trying to explain yourself and looking like your trying to get 1 over on them...


----------



## custrel (Jun 30, 2009)

TBFGhost said:


> This is exactly at what I am getting at. Clients want a price break down and it been easy...materials and labor. The say it makes it easier to compair estimates. So now when the client buys all the materials...where do I put the mark-up? I put it under the only option left...labor....maybe I need to change around my invoices... anyone who does not mark-up material is loosing money that should be theirs...and is also screwing with the rest of us who understand the mark-up...


I understand what you are saying. AND I'm not surprised the homeowner is reacting with a WTF???

If I'm breaking out the estimate, which I usually do, I mark up both labor and the materials, but I'm not _relying_ on my materials to make the job profitable for me. My labor charge stays the same regardless of who supplies the materials b/c I've priced my labor to be profitable.

I understand a % markup on materials, and I think most HOs expect that, but a fixed $ markup on materials REGARDLESS of the cost of materials or who actually spends the time procuring them sounds like greed and/or poor cost management.

It takes me the same time and materials to install a $400 fiberglass door as it does a $1000 metal clad wood door. If my markup is 10% on materials and the HOs go with the cheaper door, I'm not going to then upcharge my labor $60 to 'make up' the loss of them not going with the $1000 door.

And if the homeowners say "We've already got the door we want on order, it's coming Friday." (Assuming its a compatible door to what I supply) I'm certainly not going to upcharge them $100.

Say you're looking for a roofer to re-roof your home and his bid is $10k for labor and $10k for materials. Well through your connections and bus. relationships, you know you can get the same materials for $5k. 

What would your reaction be when the roofer says "Sure, you can supply the materials, but I need to revise my labor cost UPWARDS to $12k."

Would you say "Sure buddy, I understand," or would you say "take a hike pal."


----------

