Where does your markup on parts go?

don_66

don_66

Markup on parts!

I need to ask a question as to where does your markup on parts go?

And does it matter that your distributor sells directly to the homeowner?

Tony_8

Markup

Mine goes to overhead and more inventory.

As far as distributors that sell direct, mine don't at the same price. Actually, if they sell at less than 50% over my cost, I buy elsewhere. I won't compete with my supplier.

Al Gregory

Parts is where we make most of our profit. I dont install anything I dont sell. My wholesaler will ask to see some kind of contractors liscense before selling anything to people they dont know.

Al Letellier

mark up, where to spend it

How about taxes, insurance, advertising, benefits, taxex, utilities, and on and on and on. It's part of the profit we try to make in this business, and is a vital part of any companies budget. It's also the hardest to predict because you simply don't know what jobs lie ahead. Some jobs are more labor oriented and some more material related. You simply have to make educated guesses on some budget line items.

To Learn More About This Professional, Click Here to Visit Their Ad in "Find A Professional"

Bill_14

If you are a parts- sales loaded company, then you have to allow these sales to pay your costs of doing business, plus profit. If you are labor-sales loaded, the same is true.

If you know your mix (labor/material/equipment mix), you can adjust accordingly. If you don't know your mix (or have no track record), you need to work off a budget...you should have a budget anyway.

The very first thing you need to determine are your itemized overhead costs. Get some help because percentages of markup mean little if you are using various numbers you hear from other people.

Bill