# a customer asked if they can buy their own material



## contractorjay (Dec 22, 2009)

so a customer asked me if they can buy their own material. the project i quoted was for over 45 thousand for roofing and siding. one bid he received was for 28k and another for 55k. the 28k guy offered the homeowner to purchase the material himself, to show how friggin honest he is because he doesnt profit off of materials.

now, i know some of you out there probably have the homeowner purchase the materials sometime in the past. when a homeowner asks you, "can i buy the material and just pay you for labor?". how did you respond and did you end up getting the bid? 

i got the bid and i bought the material. i just wanted to see how you guys would respond before i shared my answer. 

im not sure how everyone prices their bids, but i charge labor, material, and 40% o&p.


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## bhock (Feb 17, 2009)

Depending on what it is I will let them. Sinks fixtures etc. Lumber no way! Takes me more time sorting it.


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## B.D.R. (May 22, 2007)

don't call for warranty:laughing:


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## Aaron Berk (Jul 10, 2010)

I tell my customers that if they choose and buy the materials, then any ill affects resulting from material selection will be their responsibility, and could also affect the time lines of the project.

So far I've been 99% responsible for all material purchases. With the exception of fixtures, I pretty much refuse to pick out fixtures, to many emotional opinions on those items.


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## loneframer (Feb 13, 2009)

Here's how I handle it. 

You can purchase the material on your own. If you need my help in this venture, my hourly rate is $xx, plus a vehicle surcharge if you need me to pick it up.

If you purchase the material, I have no ties to it and will not be responsible for handling any damage claims that may arise, unless you pay me my fee of $xx per hour to handle the claim.

If you purchase the material and I schedule the job, you will be billed $xx rescheduling fee if the material is inadequate to perform the contracted work and I have to make a return trip.

If you let me buy the material, I will guarantee that it is in good condition and meets job requirements, for a modest mark-up of xx% for my troubles.


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## BamBamm5144 (Jul 12, 2008)

Tell them once the contract is signed, you will give them a list of why they need to order. Any material delays need to be dealt with by them. If materials are late and employees are waiting, charges will be extra.

I hate stuff like this. Actually I hate not ordering materials myself because something is always missed.

I got a call Tuesday from a home remodeling company that I did one roof for last year. They were in a bind and needed a roof done. Cedar re-deck. No new plywood, no roofing nails, no ridge cap, tacker staples or anything else. Just shingles and felt.

Took me 3 hours to get everything. They won't like that bill.


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## contractorjay (Dec 22, 2009)

loneframer said:


> Here's how I handle it.
> 
> You can purchase the material on your own. If you need my help in this venture, my hourly rate is $xx, plus a vehicle surcharge if you need me to pick it up.
> 
> ...


pretty good response. but wouldnt they feel a tad bid offended b/c you're already making money and yet you want to make MORE money off them just because a _slight_ mistake happened?


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## Aaron Berk (Jul 10, 2010)

I know the question wasn't for me, but come on. A slight mistake costs money.

Every thing cost money. We do this for a living, not a hobby


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## loneframer (Feb 13, 2009)

contractorjay said:


> pretty good response. but wouldnt they feel a tad bid offended b/c you're already making money and yet you want to make MORE money off them just because a _slight_ mistake happened?


If I make a slight mistake, it's on me, if you make a slight mistake, should it still be on me?

I guarantee my professionalism. Mark-up is the insurance premium.:laughing:


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## contractorjay (Dec 22, 2009)

loneframer said:


> If I make a slight mistake, it's on me, if you make a slight mistake, should it still be on me?
> 
> I guarantee my professionalism. Mark-up is the insurance premium.:laughing:



IMPRESSIVE response "If I make a slight mistake, it's on me, if you make a slight mistake, should it still be on me?"


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## WNYcarpenter (Mar 2, 2007)

I had this exact discussion with the guy I work with today....except it was contractor ordering fixtures vs. sub.....mark-up etc....

I likened it to the HOer purchasing their own materials.

If you buy it you own it, Is my thinking, and responsible for the warranty of work.

If I purchase the fixtures and have the plumber install and there's a leak down the road, it's on my dime unless it's proven without a doubt there was faulty installation....or like lone stated, pay the mark up and you're free of the warranty liabilities.


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## WilsonRMDL (Sep 4, 2007)

In the past I've ordered the material and let the customer call or go down to the supply house and pay with their card or whatever they want to do, especially on roofs I can just call the order in and the customer has to spend their time taking care of payment, that's only if they ask I'd they can purchase materials


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## Bweikel (Feb 20, 2011)

How do you guys feel about windows?


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## Trim40 (Jan 27, 2009)

When they ask if they can buy materials, ask them if they take their food to a restaurant.


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## siberian (Mar 15, 2007)

This creates to many issues. Are they willing to buy the exact product and at the same place as you. Im sure you know exactly what is needed for the best job, doubt they do, If they dont have the materials on site, are you willing to cut the day short and go back ( possibly many times) for nothing, and will you sign off a job with your name behind it not knowing the products or how they have been handled?


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## jarvis design (May 6, 2008)

I have this issue come up all the time. My policy is such:

I include allowances for fixtures/some materials in all my fixed price quotes. (ex. tile - $4.00 sq ft / toilet - $350 / shower faucet $500 / etc). My allowances are based on MY cost. That means that I am still making the markup required to run my business. So, if the customer supplies his own toilet, I deduct $350.00, not the marked up amount.

If the HO wants to supply fixtures:, 
A: I do not warranty products not supplied by us. 
B: If there is a problem with a supplied fixture, my hourly rate kicks in. C: If I have to pick it up, my hourly rate kicks in, plus fuel.

Not too many customers see the value in this. I am upfront with my clients as to how we price jobs. They get the buying power of my trade discounts which are 10-40% off, plus a reasonable mark-up.


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## KennMacMoragh (Sep 16, 2008)

You can let him, just make sure you tell him that you can not warranty material he purchases.


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## Sar-Con (Jun 23, 2010)

loneframer said:


> I guarantee my professionalism. Mark-up is the insurance premium.:laughing:



Is that your quote? I love it!


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## seeyou (Dec 12, 2008)

Bweikel said:


> How do you guys feel about windows?


I like them. They let light in and you can see what's going on outside.:whistling

But unless it's a stained glass window from Aunt Martha's estate: You want me to install it, then it is I who will do the ordering and will mark it up for that responsibility and time consumption.


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## loneframer (Feb 13, 2009)

Sar-Con said:


> Is that your quote? I love it!


It is now.:laughing:


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## Ashcon (Apr 28, 2009)

To the op I had this discussion with a HO years ago about a roof. My suppliers will deliver my materials to the roof, the average big box store will not.

I don't care if they buy the materials or not but as others have stated, we only make money when we are working. If your material delay causes me not to work, you need to pay me!

I did help a customer shop once and loaded the material into my truck and delivered it all on the clock of course.:thumbsup:

He had a revolving credit card at the Cheapo Depot and wanted to finance his material.

Chad


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## AmeliaP (Apr 22, 2007)

I have never seen it work out that a HO buys materials and it doesn't cause extra labor on our part. So I just add extra labor to the proposal.


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## tedanderson (May 19, 2010)

If the HO buys materials, that really means that you will be buying materials also.

If they make a mistake, you'll have to correct it. I mean you can keep sending them back to the store but if you want to get the job done in a reasonable amount of time, you'll eventually decide that it would be better to just go yourself.

The other complication that you run into is that the HO starts to tally up what you use vs. what you waste even if the "waste" is really a by-product of the job and they expect some sort of adjustment.

I was doing a low voltage prewire in a house under construction. The HO bought his own materials and he complained to the GC that I was wasting his wire. As most of us know, the principle is that you can always cut off what you don't need but you really don't want to splice in what you don't have if a run comes up short. And we were dealing with a 6000 sq. ft. house that had 200ft and 300ft runs.

But I agree that there are some things that the HO should pick out. Fixtures and things like that are more personal and the HO is more accepting of the blame if it does not quite work out the way that they want it to. But because we accept the blame and costs associated with the mistakes that we make, it's not a crime to make a bigger profit when the job comes in under budget as a result of needing less material than originally estimated.


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## woodworkbykirk (Sep 17, 2008)

im completely with lone on this, the odd time im ok with it is for really small jobs or if i just ran out of lumber and need only a few sticks and the h.o is going to pick up fixtures and get them to pick up 4 or 5 studs. saves me time and h.o can kill two birds with one stone


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## J L (Nov 16, 2009)

When clients ask to provide the material, they typically aren't they type of clients that we work with. Or they are really that naive and aren't sure what questions they are supposed to ask. 

Every company needs a certain amount of money a year to operate. At the end of the day, it really doesn't matter if you add markup to the labor, or to the material, or to the subs, or all of the above. The only thing that matters is that the markup you charge pays for the expenses. So the contractor in the OP who was being "honest" by not charging markup on the expenses, I call BS. He has to charge more markup on the labor portions of the job to make up for the lost markup on the material. Maybe it's a sales technique. Sounds fishy and sounds like someone who doesn't know their books.

So can the client provide the material for their project? Sure, but you better believe that I'm going to keep the same markup for the material as part of the total project price (I mean I still have the liability of replacing the material if I miscut a piece right?). Plus I'm going to inevitably be charging the HO to wait on material or make extra trips or something. Sounds like I just need to provide the material and get this project underway...


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## Roofmaster417 (Jun 8, 2010)

Here in Springfield when customers try that "What if I buy Materials",a dipchit contractor already gave them a crazy bid.So I try not to compete.


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## J F (Dec 3, 2005)

contractorjay said:


> so a customer asked me if they can buy their own material. the project i quoted was for over 45 thousand for roofing and siding. one bid he received was for 28k and another for 55k. the 28k guy offered the homeowner to purchase the material himself, to show how friggin honest he is because he doesnt profit off of materials.
> 
> now, i know some of you out there probably have the homeowner purchase the materials sometime in the past. when a homeowner asks you, "can i buy the material and just pay you for labor?". how did you respond and did you end up getting the bid?
> 
> ...



Maybe someone already mentioned this, but if the h/o's think you can't afford any kind of punctuation, they probably thought they were doing you a favor by purchasing the materials. :w00t:


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## Flyfishing1 (Feb 7, 2011)

I have dealt with this previously and have learned x amount of money by a customer demanding I purchase material from certain vendor after contract was signed.

That vendor was 2k higher and I ate it ! Didn't have it written in contract.

Now I include preferred vendors with a spreadsheet of material from vendors. The home owner is free to search his vendors but it is written in contract that any difference in pricing is extra to h/o.

I also make it their responsibility to ship it to job site and any trips I make to pick up things not delivered is a charge of time and milage.

I also charge a percentage for buying from non preferred vendors ( I usually get a discount).

Some h/o's want to bring their own subs in. I make it very clear that their cousin joes girl friends uncle will receive 1099 and that I'm not responsible for the outcome of their work. Also include that any interference or delays caused by their contractor to other trades or timelines is also chargeable t&m. I state in contract that their contractors will work under my
Timetables and also that they will work during common construction hours and days. Any if their work that fails inspection will be taken over by me and charged t&m. That usually always backs the customer away from bringing their own in when they see how much responsibility they are assuming to save a thousand bucks.


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## Smatt (Feb 22, 2011)

*Is it really worth it*

You can not fault the home owner for wanting to save a buck.we all are guilty of it. However some people mark up materials to cover//defray costs. The HO is looking at the bottom line and it is this very short term to spite our face logic that will catch up to them in the long run that some one will get the call back for. In my field the HO wants to buy their fixtures at home depot or lowes. The quality and finish is not the same as the supply house. I think that sometimes consumers are mislead to buy a quality product when they are just purchasing the brand name. In actuality some the products that they buy are seconds as I am told. 
Even if the HO buys the material it is inevitable that they will forget something and you will have to pick it up. Now we all know the HO should pay for this, but this is the real world and sometimes this is the price of doing business. Me personally, I would rather stay home than work for free!


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## Rob PA (Aug 30, 2010)

I agree on one thing, when the HO buys material they always seem to complain about waste. Even if they do not understand that its a by product of the project. Romex is the biggest thing they do not understand. They think you can just keep splicing these pieces together.


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## Ohmy (Sep 10, 2009)

contractorjay said:


> so a customer asked me if they can buy their own material. the project i quoted was for over 45 thousand for roofing and siding. one bid he received was for 28k and another for 55k. the 28k guy offered the homeowner to purchase the material himself, to show how friggin honest he is because he doesnt profit off of materials.
> 
> now, i know some of you out there probably have the homeowner purchase the materials sometime in the past. when a homeowner asks you, "can i buy the material and just pay you for labor?". how did you respond and did you end up getting the bid?
> 
> ...


There is nothing wrong with a customer supplying material as long as (a) you still mark-up the material and (b) the discount you give them is less than what you can buy the material for a local store and (c) you don't warrantly the material. 

That sounds really tough but its honest. The reality is its much much harder to run a job with customer supplied material. They cannot get nearly as good a deal as you can (even its a home depot part you can get bid room pricing). The count is always wrong. Who is pays for waste? Who pays for broken items? Who picks the stuff up? Who warranties the parts? Are the brands the type you normally work with? Are additional parts available if there is a problem.

The point is that its not efficient or effective to have a customer buy material. There is no savings. So, the cost of the job stays the same or is actually higher.


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## dprimc (Mar 13, 2009)

My response to this is the same as my response when a HO asks what the price will be if they help. (Only got this one once or twice over the years.)

I just smile and say it will cost double.

These types of people are either really uneducated about the building process, or are way too focused on price to be rational.

The uneducated can be educated about extra labor charges, no warranty, liability, etc. The price focused are just going to hire a hack or the cheapest proposal anyway so it isn't even worth the time to try and explain it.


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## dprimc (Mar 13, 2009)

Related side note. 

Did a deck last year for a friend of my dads. Used a few posts I had left over from a previous job. When we were building one of the posts was slightly different than the others. (Barely noticeable)

About a week later I found out a neighbor had borrowed one of my left over 4x4's and replaced it with one from Home Despot.

About a month later the client calls. She tells me one post is warped. Found out my dad was going to her place the next night so I asked him to check it out and see how bad it is.

He tells me it is horrible. I asked which post it was, already knowing it was the replacement from the depot.

Cost me about 3/4 of a day to get the new post and go and replace the warped one. I almost sent the neighbor a bill. We did have a chat about the lumber under the roof on the side of the shop. :furious:

The warp actually tweaked the post base slightly. Imagine if all your lumber the homeowner picked up was this type of crap!


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## Tinstaafl (Jan 6, 2008)

dprimc said:


> About a week later I found out a neighbor had borrowed one of my left over 4x4's and replaced it with one from Home Despot.


I don't get it. Do you typically do your jobs with aged leftover materials, so they don't behave like something you bought new? I've been tempted to spring for kiln-dried to avoid that, but no one wants to pay for it. I can't afford to air-dry stock on my own in case I get a job where I can use it.


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## the rock (Feb 27, 2011)

As the invention of the internet has helped us,there is also a down side.Our customers know what our cost is.Our supply people will also sell to them directly at "our cost." This is where you need people skills.Explain that your running a business and this is what is needed to preform a professional installation


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## Mitch M (Dec 4, 2006)

I had two different but similar scenarios recently. One client wanted me to replace two toilets at his in-laws home. He told me that he paid for it at Lowes. This is not the Lowes that I would normally would go to. I had to go up front and give the phone number it was under. I then went got my misc materials and waited...and waited...and waited. Finally I went to the back. He was pulling the toilets off the shelf. If he had given me the Item No and I paid for it myself I would have probably saved him money but he is paying me to stand around and wait.

The other was a client had someone replaced some countertops and they installed the sink with the top. Client went and bought the faucets and some other parts. Wanted me to install. ok. Where is the basket, supply lines, etc.? Can't we use old? no Will not fit. Had to go to Lowes to get all these parts.

I ask them to just give me an item no and a general description and let me pick it up. If they insist on furnishing, then no warranty except the labor part, and they pay for any trips that I need to go get materials. Same thing with Subs they hire directly. It does not happen too often with me but it does.


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## J L (Nov 16, 2009)

Tinstaafl said:


> I don't get it. Do you typically do your jobs with aged leftover materials, so they don't behave like something you bought new? I've been tempted to spring for kiln-dried to avoid that, but no one wants to pay for it. I can't afford to air-dry stock on my own in case I get a job where I can use it.


From what I understand, the kiln dried actually warps far worse than regular PT. I don't have first hand experience with it, but I think I read that somewhere (probably CT...).

We don't warrant any of the PT from warping as it's out of our control. We will warrant the structure and the labor (if it was installed wrong which caused it to warp, we will replace). I've had decking boards break the 2 1/2" deck screws from warping.

While on the topic of decks - if a client wants to purchase their own material for a deck, they typically go to HD or Lowes. We just recently built a 400 sf PT deck and we sent out RFQs to all the local lumber companies as well as Depot and Lowes. It's been a while since I've shopped price so it was good to do. What I found was that HD and Lowes couldn't even compete on price. So if a HO goes there and thinks they're getting a great deal because the bid room is giving them 10% off, they have no idea. This is only price, not to mention quality of materials.


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## Stephen H (Feb 18, 2011)

I am a roofing contractor.
From time to time a prospective customer will ask" how much if we supply the materials?"

I simply respond" I would be happy to do this roofing project for you, but-------- I am sorry--- we wouldn't do the project under those terms"

and then move on to the next prospect---- or if there are no other current prospects then go fishing or something.

when a prospect asks this- they are really telling you that price is their primary deciding factor-and I know I won't get the job anyway
furthermore I know it's going to cost me time,money and hassle to explain all the many reasons why NOT to work this way.
they are,in fact, asking to increase you work load, your hassles, increasing endless conversations and decisions---while asking you to take less money

why on earth would i be interested conversations about who pays for the last 14 shingles un -used in that bundle, how many nails were used, what that half tube of caulk is worth and why there is a fourteen inch piece of drip edge awkwardly used in a highly visible location.
stephen


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## Stephen H (Feb 18, 2011)

BTW---- this question is a variation of the phone calls i used to get on monday mornings:

"-- hey, my brother in law and I were going to re-roof my house,---we got it all the way torn off this weekend and almost all the felt put on--- but we have to go work our day jobs today and it is supposed to rain later this afternoon----so how much do you want just to nail on the shingles?"


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## Smatt (Feb 22, 2011)

Stephen H said:


> BTW---- this question is a variation of the phone calls i used to get on monday mornings:
> 
> "-- hey, my brother in law and I were going to re-roof my house,---we got it all the way torn off this weekend and almost all the felt put on--- but we have to go work our day jobs today and it is supposed to rain later this afternoon----so how much do you want just to nail on the shingles?"


I would not want that liability issue especially for a weekend warrior.


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## Stephen H (Feb 18, 2011)

Smatt said:


> I would not want that liability issue especially for a weekend warrior.


that's a great point- but over and above that

Certainley I had work for some other customer scheduled Monday---- so why on earth would I leave that customer" twisting in the wind"- in order to bail out a DIY er who decided to save money by handling his own roof---and then got caught with his pants down?

the Diyer is absolutely free to do his own roof- but that decision also has consequences

I DIY some things on my own place as well-and THOSE decisions have consequences as well.
Best wishes,
stephen


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## Tinstaafl (Jan 6, 2008)

RemodelGA said:


> From what I understand, the kiln dried actually warps far worse than regular PT. I don't have first hand experience with it, but I think I read that somewhere (probably CT...).


Yeah, you read it here. :thumbsup:

I was being semi-facetious. I gather KD will do okay if you let it acclimate for a while--but of course that's similar to buying typical wet stuff and letting it sit to dry out.

I just don't think what the neighbor did is such a big deal; it's up to us to cull our lumber as best we can. 4x4 wouldn't fly around here for that height anyway these days.


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## Bweikel (Feb 20, 2011)

KD lumber sucks it always twist and crowns bad , we used it on a huge remodel last time I'll ever do that don't waste your time and money on it


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## rselectric1 (Sep 20, 2009)

Bweikel said:


> KD lumber sucks it always twist and crowns bad , we used it on a huge remodel last time I'll ever do that don't waste your time and money on it


KD or did you mean HD?


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## Bweikel (Feb 20, 2011)

Kiln dried (kd)


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## tedanderson (May 19, 2010)

I wonder if these same people ever ask their doctor if they can purchase their own surgical supplies to avoid the hospital's markup.


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## dprimc (Mar 13, 2009)

Tinstaafl said:


> I don't get it. Do you typically do your jobs with aged leftover materials, so they don't behave like something you bought new? I've been tempted to spring for kiln-dried to avoid that, but no one wants to pay for it. I can't afford to air-dry stock on my own in case I get a job where I can use it.



Maybe it is just a Seattle thing, but I have never, in over ten years, had an issue with using post material on hand from other jobs. The post in question was 'new' from Home Depot. Two of the others were from a job a few month earlier. We did have some high 90's temps (somewhat rare here) a few weeks after this was completed and this was the only issue.

I have also never had to warranty any other PT material before. Dimensional stock left over usually gets cut into blocking over beams, and as I said, I've never had an issue with 4x's before. Maybe you throw it away, but to me it is bad business to take time to return and pay a restock or to pay to pitch it. Maybe it is a climate thing, but PT here stays decent.


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## cwatbay (Mar 16, 2010)

I talked to a guy recently who is a low voltage contractor, I needed to find out where he left an extra line of siamese coax so I could connect to it. 

I asked him a little about his business and how things went when he originally did the work on this particular job that I was retro fitting. 

He said that he will put equipment that client's buy no problem. With the stipulation that: 
A) Absolutely no warranty except for the wiring and terminations that he did.
B) The client gets what he gets. If the equipment the client bought doesn't work, fails or isn't acceptable: too bad, the client will have to replace it, and, will have to pay for any additional time and materials to complete the job, including trip charges. 

This is all written in this guy's contract which the client signs.


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## wellbuilt home (Oct 22, 2007)

If I build the project I buy the material . 
If the HO buys the material he can nail it on . 
When it turns to S--- call some one that cares .
John


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## Joasis (Mar 28, 2006)

I am surprised by a lot of the responses. I am a GC, and I do cost plus all the time. I have no problem with a customer "buying" the material...as long as it comes from my source, period. All it takes is the mention that we do not offer any warranty unless the materials are ordered by me. They are usually happy to pay my "cost" and then my contractor's fee as the total bill. 

I have taken over on jobs where material was already there, and I have negotiated a fee based on that.....it is also a misconception that customers get the same deal we do, especially on new home materials. Granted, the supply houses will sell to anyone coming in the door now, but they do not get our pricing. 

On a custom home build, all the receipts for all materials and labor are compiled and the customer gets a copy, plus my bill. 

Now....if someone wanted to build a new home or whatever, and simply wants a labor bid because they are going to Lowes or wherever themselves, my answer is there is usually a rack of business cards there for trade guys they can hire.....since they are acting as GC themselves.


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## jamestrd (Oct 26, 2008)

Stephen,

recently had guy call me and told me..his friend sanded his floors but had not time to finish them...
so wanted me to give him a price just to apply finishes for him...

i basically charged him what it would have cost if we did the job soup to nuts...


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## Tinstaafl (Jan 6, 2008)

dprimc said:


> Maybe you throw it away, but to me it is bad business to take time to return and pay a restock or to pay to pitch it.


I don't pay a restock, but yes, I do occasionally hang on to the odd piece or three. I was just surprised by the idea that you might expect new stock to behave the same as old. I haven't seen a significant difference in quality between HD and other suppliers, other than the cull factor.


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## dprimc (Mar 13, 2009)

I don't ever buy from HD so I wouldn't know. My only experience was this one deck post and it was new. I have a wholesale place that is generally cheaper than HD with much higher quality of materials, so I almost always buy from them.

Usually the 4x' I save are shorter pieces and are used under lower decks or landings. I have a bunch of decking that I saved that may never get used since it is old. Just waiting for the special situation where it would be perfect.... :whistling


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## Mike Hay (May 7, 2010)

Labour only transformed our company, for the better. At the begining of the recession we went through a competitive transformation that catapulted our profits. We quit supplying, for the most part. If a customer really wants us to supply, sure, but I prefer not. Heres why.

1. When I supply material, the customer feels like they are paying us a lot of money, and they are not, I am just handing it over to the hardware store anyways. Soo, usually, when they are just paying us labour, we get a check quicker, and the hardware store usually is the one who waits.

2. For labour only, I can quote a job without even looking at the job. Thats half a day saved where I can be on site making money. Quoting materials requires a closer look.

3. Supplying materials also takes part of a day to drop off and pick up anything left over. Thats just more lost time.

4. A lot of hardware stores are selling material packages. If your the guy who can just do the job, your the guy who gets the refferals.

Now I know what your thinking.....OMG but that is where I make my money. My mark up and my left overs are my income. Its easy, change your system. You know what your worth, and no one is asking for a volunteer. They just want transparent honesty. Heres 2 simple formats to ensure you are still recieving full value for your efforts.

1. This is what we did. We pulled out our invoice history. We looked our last 300 invoices and figured out an average profit per house. We then broke it down to an average square footage. Now, when we are called for a quote, were able to give one immediately over the phone. In fact, our website has a self quote page. So people only phone after they already priced their own job. If its to much, they simply dont call. Easy, no time lost or any weird feelings.
This saved a ton of time, and ultimately increased our profits.

Another way to approach it is to be honest on how much your worth per day. 500 bucks, 1000. whatever, its your call. If your worth it, you wont be shy to ask it. If you feel guilty, your charging to much. We all have a concience. If your any good at what you do, you should know how many days your project will take. Now you dont have to tell your customer your daily rate, just the final number.

I think once you try out labour only, you will quite enjoy the freedom and improved profitability.


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## kevjob (Aug 14, 2006)

By removing materials from my basements, I stand lose around 6k, not sure how this would more profitable to me?:blink: Cant make that up in labor ever.

I provide an all inclusive package for my clients, there are plenty of guys who do the old " I am honest, I don't mark up materials" game, some are not around anymore.


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## Bweikel (Feb 20, 2011)

What percentage do u mark up your material ?


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## Gough (May 1, 2010)

Rob PA said:


> I agree on one thing, when the HO buys material they always seem to complain about waste. Even if they do not understand that its a by product of the project. Romex is the biggest thing they do not understand. They think you can just keep splicing these pieces together.


GWB is the one where I've seen homeowners go ballistic about waste. I guess they think the hangers should use a truckload of short butts to finish the lid in the living room? The last time this came up on a job was one where the HOs were always underfoot, questioning us about every little detail. At the end of the job, we all decided that it would have been worth it for us all to kick it and send them on a cruise for the last 6 weeks of the job.

On the original topic, we've been willing to let the client supply materials, but only if they are exactly what we specify: no substitutions. Years ago, we discovered that material mark-ups were not appropriate for what we do. If we were doing strictly "blow and go" in new construction, I could see using that. OTOH, we've had jobs where my lead painter and I spent two days applying $20 worth of material. The costs normally recovered by marking up materials are included in our labor charges.


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## Mike Hay (May 7, 2010)

Hey kevjob, so ummm, of that 6,000 dollars, how much would be paid out to the hardware store that you dont keep anyway, or is that just simply pure mark-up? Irregardless, with the time saved on trips for materials, and if faced with the choice between losing a job, or having meaningful work, it would seem to be a no brainer really.

Now of course we get better pricing then the home owner would on materials, and our markup should usually be in close proximity to our savings so wether we supply and make money or they do, it should be quite close. Buuut, people are smart, they work hard, and they are sooo sceptical of hustlers trying to take them for a ride that by giving them some control, they feel the confidence needed to actually go through with a project. After all, isent this whole recession based on a lack of consumer confidence?


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## Gough (May 1, 2010)

Mike Hay said:


> I think once you try out labour only, you will quite enjoy the freedom and improved profitability.


Mike

I finally figured out that you're just adding 16 2/3 percent to your labor by adding that "u", right?:jester:


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## Mike Hay (May 7, 2010)

Hey Gough, lol, well, There is certainly a dollar threshold that needs to be met in order to have a job be worth showing up for and performing at your absolute peak potential. At any time when a man feels like the compensation is inadequate, there is a tendancy for quality to fall. People show up late, leave early, dont clean up, whatever. It then becomes a mental thing. Its an undeniable human nature. 

Wether I supply or not makes no difference on what I need from that job to be worth my time. Interweaving it just creates unnecassary complications , and mistrust.
This concept has not only made my day to day more proffitable, it has also resulted in many hardware stores making close aliances with us. We get ALL of the referals from every customer that walks through their doors. Also, most owners of hardware stores, also have a side business of building homes, we get them all as well. This willingness to be flexible has resulted in being dramatically busy everyday of the year through the entire recession. Its just good business sense.


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## Gough (May 1, 2010)

Mike Hay said:


> Wether I supply or not makes no difference on what I need from that job to be worth my time. Interweaving it just creates unnecassary complications , and mistrust.
> 
> 
> This concept has not only made my day to day more proffitable, it has also resulted in many hardware stores making close aliances with us. We get ALL of the referals from every customer that walks through their doors. Also, most owners of hardware stores, also have a side business of building homes, we get them all as well. This willingness to be flexible has resulted in being dramatically busy everyday of the year through the entire recession. Its just good business sense.


Thanks for taking my humo(u)r in the good spirit with which it was intended.

I appreciate you bringing up the whole subject, especially since a lot of contractors don't seem to get it. The mistrust that you talk about is a big deal. Now that clients have become more aware of the common practice of marking up materials, it seems to have made them more suspicious when contractors suggest higher quality (=more expensive) materials. They feel that the contractors are just upselling them to increase their bottom line.

Your second point, frankly, is one that I hadn't thought about. It might explain the number of referrals that I do get from our main paint supplier though.


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## dprimc (Mar 13, 2009)

Mike,

Sounds like it worked great for your business, but keep in mind there are lots of types of business represented here.

Surely you don't think a self quote on a website for an addition or deck contractor would work? What....just enter your square footage, have the materials on site and we'll build it for $XX,***.00. (Some sort of average price per job????)

Different things work for different business models. No offense, but if you just do insulation, that might be more simplistic than many other trades when it comes to bidding jobs, cost and types of materials, not to mention quality and types of materials available from different retail and wholesale stores.

I'm glad it has worked for you, but I can only imagine it being a logistical and liability nightmare, not mention a huge waste of my time, as well as attracting a type of client I have no desire to work with in the first place.

The recession has changed people's mentalities about a lot of things. Consumer confidence is what you have to instill in your potential clients when you meet with them and when you hand over a proposal. If you can't justify your prices, you're in trouble. If you need to add that you don't mark up materials, just to try and get a sale, I think you are missing the boat when it comes to sales in general. 

Some of my best clients have been the ones where price was never an issue at all.


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## the rock (Feb 27, 2011)

raise your labor rate:clap:


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## Magnettica (Dec 19, 2006)

contractorjay said:


> so a customer asked me if they can buy their own material. the project i quoted was for over 45 thousand for roofing and siding. one bid he received was for 28k and another for 55k. the 28k guy offered the homeowner to purchase the material himself, to show how friggin honest he is because he doesnt profit off of materials.
> 
> now, i know some of you out there probably have the homeowner purchase the materials sometime in the past. when a homeowner asks you, "can i buy the material and just pay you for labor?". how did you respond and did you end up getting the bid?
> 
> ...




Light fixtures, ceiling fans, and appliances. That's about it. 

Most HO's aren't really going to be able to buy everything that I'm going to need. Most of the time they don't even supply with me with light bulbs! How the heck are they going to remember to pick up staples, wire nuts, and romex connectors? 

This year I am trying not to markup materials too much, but rather concentrate on billing more accurately for the labor. The value that I'm selling is the ability to put it all together, not compete in the sale of materials. However, the markup does need to cover the time it takes to acquire the materials.


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## Inner10 (Mar 12, 2009)

> This year I am trying not to markup materials too much, but rather concentrate on billing more accurately for the labor.


This is something I've always fought with; if you give someone a bill where the materials arn't marked up and the labour is accurate you often get the reaction "Why does it cost 150 dollars to change a 5 dollar part!?"

Now if you sold that part for 150 and the labour was 5 the same person would be over the moon.

...I realize this doesn't apply to everyone but its something I've noticed over the years.


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## Tinstaafl (Jan 6, 2008)

Inner10 said:


> "Why does it cost 150 dollars to change a 5 dollar part!?"


Sometimes you're not just paying me for what I do, you're paying me for what I know.


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## Mike Hay (May 7, 2010)

I guess this deviates slightly from the oringinal post, buut. I guess with this supply or not issue, I chose to simplify things to their absolute simplest possible form. I can understand it, my customers understand it, and our dealers understand it.

Lets face it, its possible to complicate making coffee (starbucks) to the point where I dont even want to go in the store because I'm afraid I will look dumb not understanding ...venti?? This complicated coffee is pricy. Society has been culled into believing that if they are being led into confusion, they are going to pay dearly.....mortgage backed low cap financial derivitaves???? People are demanding open and transparent business practices.

One of the worlds most complicated systems is our roads. Transportation. Down town new york. All held together by some of the simples systems ever. Red yellow green. A couple of painted lines, throw in a few signs of varying info like merge or stop. done. A million cars a day traversing eachother relatively smoothly. Simplifacation.

This is the mindset behind our structure. Pricing is just one small step we took in creating a simple system. It can be vary vary challenging to try and simplyfy things that are normally complex, but it is so rewarding to see stress melt away as you peel layer by layer away of your businesses complications.


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## tedanderson (May 19, 2010)

joasis said:


> I have no problem with a customer "buying" the material...as long as it comes from my source, period.


But I think that the issue here is that when the customer wants to buy his own materials, that usually means that he questions the integrity of your pricing and/or he wants to circumvent some of the added expenses. If the client has a problem with paying you for every aspect of the entire job, he certainly will second guess using your supplier.


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## larryb (May 23, 2008)

Is this a retail of insurance job?


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## Tom Struble (Mar 2, 2007)

Tinstaafl said:


> Sometimes you're not just paying me for what I do, you're paying me for what I know.


 
tree fiddy?


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## JCarsten (Jul 6, 2010)

My contract states:
*Builder Controls Construction. *Buyer agrees that direction and supervision of the work forces, including but not limited to subcontractors, rests exclusively with J. Carsten Homes. Owner agrees not to interfere with or issue any instructions to work forces nor to contract any additional work with other contractors or subcontractors, except with J. Carsten Homes’ written consent, and then only such manner as will not interfere with J. Carsten Homes’ completion of construction of the remodeling project.

*Owner’s Work and Materials.* J. Carsten Homes does not warrant any work performed by or on behalf of Owner or any materials or equipment supplied by or on behalf of Owner in the construction of the remodeling project.


Make sure they sign off.


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## cwatbay (Mar 16, 2010)

I believe that there are more than just one or two reasons why HO's want to buy their own materials: 
1) They think they will save money because there is no mark up (ie: profit)

2) They know exactly what they want and have spent time researching what they want ..... this would be for things like appliances, fixtures, windows, doors, carpets, and other items that can be bought separately or as an ensemble. I do not think it means raw materials like lumber, cement, insulation, nails, screws, etc. 

3) They have definitely watched way too many DIY shows that make it look like several weeks or months worth of work can be accomplished in about an hour. Even if it is not that extreme, these shows always show smiling happy HO's and contractors having a good ol' time demo'ing and installing, and , before you know it, bingo, the job is done and there's hug's and kisses for everyone. 

4) I am sure there are ton's of other reasons why individual HO's want to buy their own stuff......but if it is a "I don't trust you" thing between them and contractors.... then I would walk away. 

In my work, I have had occasion where the client bought the materials....but what they bought were the fans, lights, fixtures and so forth. They didn't buy things like wiring, back boxes, breakers, enclosures, switches, outlets, etc. They left that up to me. 

But here is the deal: 
1) Some people bought stuff via their interior designer or architect, which is fine. 
2) Some people bought stuff cus they are just plain cheap asses. Period. 
3) Never had anyone buy stuff ( as far as I could tell) because they thought I was ripping them off per profit on materials. If I got any indication of that, then whammo, I am out of there.......because you can bet real money that they will be a royal PITA for the duration of the project. 
4) The other part of the deal is when someone says they want to supply the materials, I say fine, no problem and then we go over the details such as: 
A) Exactly what materials......usually its the fixtures, lights, fans, sometimes LV stuff like: cameras, mounts.... but that is it. 
B) It is in the contract and specifically stated in writing that there is absolutely no warranty on customer supplied materials, existing wiring, connections, equipment, or basically anything that is there previous to our work
C) Again in the contract: anything supplied by the client that fails to work properly, requires modification, does not integrate into the scope of work, needs additional time - labor and materials..... is NOT covered by us, AND, is the total responsibility of the client.......which includes additional time, labor and materials charges if we have to replace, modify, return, reprogram, or anything else outside of the normal scope of work detailed in the contract. And, the monetary rate for all this trouble is stated plainly and may be higher than the labor rate for the project. 

This is all explained nice and neat, and, in a plain and matter of fact matter with no condescending or sarcasm. It's just business and we let them know that we appreciate that they want to work with us, just as we want to work with them. 

If at the time of agreeing to the contract and the stipulations about client supplied materials, they go something like: "Go F--- yourself" or Uncle Louie will do it or "some unlicensed, uninsured, no employee compensation, illegal alien helper, douche bag Craigslist Hack" will do it .......then I shake their hand and thank them for the opportunity and please keep us in mind for any future projects. 

Amen.


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## Joasis (Mar 28, 2006)

tedanderson said:


> But I think that the issue here is that when the customer wants to buy his own materials, that usually means that he questions the integrity of your pricing and/or he wants to circumvent some of the added expenses. If the client has a problem with paying you for every aspect of the entire job, he certainly will second guess using your supplier.



And I as stated, but maybe was not clear, if they question my choice of suppliers, then I do in fact tell them that the contractor's desks of the box stores will be able to give them business cards for the laborers or trade guys they want to hire, since in effect, they are acting as a GC, and do not need my services anyway.


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## woodchuck2 (Feb 27, 2008)

I have dealt with this issue quite a bit in the year or so. If they want to purchase materials then it is fine with me. I make a list of what i want and they get it but they get no warranty this way. I have also e-mailed a list to my supplier and tell the HO when and where to pick it up. What i like best is to have the HO open an account somewhere and i pick up the materials on their tab, they get everything at their price, they are responsible for the bill and its interest, i charge them time to pick up and for any returns, i have no sales tax to worry about and i can put all the small pitily materials "wire nuts, tape, bulbs, connectors, etc" on them too.


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## ToryDutton (Jan 21, 2010)

I don't have a hard and fast rule. It just depends on what it is and if I otherwise think it will work out with the client.


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## J L (Nov 16, 2009)

We allow our clients to supply their own fixtures (with our guidance) if they would like. Things like lights, vanitys, toilets, etc. Maybe even tile for a bathroom remodel if they've already found exactly what they want and we can't get it less expensive through one of our suppliers. They understand that we don't warrant any owner supplied items and that is laid out in our contract.

I do not think it is feasible for a client to provide the material for a remodel, especially when it involves multiple subs. Look at a bathroom remodel - they would have to provide misc. plumbing fittings, pipes, and parts to replace the valve and/or move the drain, misc. electrical parts and pieces to change their single vanity light into a double light and/or add a vent fan, provide ductwork, and the list goes on and on. IF they were to provide this material, they would do the takeoff themselves, as part of our markup on the materials is to manage the materials and know what and how much to provide. As you could imagine, this could turn into a large cluster. 

Some clients want to save a few bucks and tell me they'll do the insulation themselves. I ask them where they're going to purchase their insulation from and they usually reply the big box stores. I politely inform them that I can have the insulation provided and installed for less than they can purchase the material for. Sometime it pays to let us do what we do best.

At the end of the day, let the client provide the pretty stuff if they'd like, otherwise, let us do our job, it's what we're good at.


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## Inner10 (Mar 12, 2009)

> Sometimes you're not just paying me for what I do, you're paying me for what I know.


Yeah but that wasn't the point I getting at; mag mentioned charging less on parts and more on labour. All I said was that if you charge the same total but weight it more towards parts the majority of people will be happier.


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## Rob PA (Aug 30, 2010)

About three years ago one of my clients wanted a few rooms prepped and painted. But she wanted to buy all the paint. She lived directly behind SW, I mean literally 50 feet. So, one day im upstairs doing my thing. I noticed im about out of trim paint. So, i mention to her i will need some more. "OK"

So, i run out of trim paint. I go on to prep the next room, patch holes, seams and sand the walls down. Been about 45 mins now. So, i figured ill go and clean up...running the shop vac and putting up tools i didnt need. 

About 1 1/2 hours has gone by now. Im thinking what the hell? This is a T/M job, so im thinking whatever. I stop and eat lunch and call the wife. I mentioned it to her shes laughing her butt off. I finish with lunch and go check to see if the patch work is ready for another coat. I kept on prepping next room. 

After about 3 hours its quitting time about 430-5pm. Im getting things organized, i figured i would just finish it the next day. HO walks in, doesnt have any reason for the 3 hour walk to SW? She kinda gets upset that the hallway trim will not be done??

All in all good HO and since then i have done a ton more work. BUT we got one thing straight, ill buy the stuff. You can not be productive moving your tools back and forth in a house when one area could of been done.


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## cwatbay (Mar 16, 2010)

I think that Rob's point is well made. There are some things that HO's can buy themselves if they think it's going to make a difference in the bottom line. 

I can see things like paint, fixtures, lights, appliances, landscape items and other things that can be exactly defined as far as spec, size, model, make, etc. 

The problems (even in Rob's case of the client just not bothering to get the stuff) arise when the HO wants to purchase things that need to be modified, or, have to be carefully selected based on the contractor's skill and experience when purchasing certain items ( like lumber, cement, stone, wiring, types of insulation, etc). 

I also think that the example that Rob demonstrates is that even with the HO knowing or being given the exact: make, model, color, size and so forth, if they fail to do "their" job of obtaining the item in a timely manner, it can still screw up the job and cost time, money and patience. 





Rob PA said:


> About three years ago one of my clients wanted a few rooms prepped and painted. But she wanted to buy all the paint. She lived directly behind SW, I mean literally 50 feet. So, one day im upstairs doing my thing. I noticed im about out of trim paint. So, i mention to her i will need some more. "OK"
> 
> So, i run out of trim paint. I go on to prep the next room, patch holes, seams and sand the walls down. Been about 45 mins now. So, i figured ill go and clean up...running the shop vac and putting up tools i didnt need.
> 
> ...


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## MarkNoV (Apr 29, 2006)

> Mike Hay said:
> Labour only transformed our company, for the better. At the begining of the recession we went through a competitive transformation that catapulted our profits. We quit supplying, for the most part. If a customer really wants us to supply, sure, but I prefer not.


I got my annual price increase notice from my supplier this morning. Some siding is going up 9%, other 6%, something else 5%. 

The reason I don't know the details is because I don't know how much a square of siding or a window costs and I don't really care. 

I add value through my services not materials, and value is what I sell. 
My services include measuring, transporting, installing, cleaning up,and servicing.
I know my costs to the penny for all of the above.

Allowing , actually insisiting, that customers buy and pay for materials leaves me free to sell my strenghts. I don't spend hours justifying markups or scaring clients with stories of possible disasters that could befall them.

Recovering costs through material markup in the age of the internet, DIY and Home Depot is about as fresh as dinosaurs droppings.


Mark


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