On 03/10/2020 08:24, Pancho wrote:
On 02/10/2020 21:24, John Rumm wrote:
On 02/10/2020 19:38, GB wrote:
On 02/10/2020 19:23, Chris B wrote:
I have just received an estimate from a tradesman (based on
photographs to save him the time of a visit) which includes £199
Plus VAT for listed parts.


The very same parts are available from suppliers listed on amazon
(not amazon itself) for £96.98 Including VAT and delivery.


I know that part of the tradesman's profit comes from the Sale of
parts but I always thought that they bought parts from suppliers at
trade prices and then billed for them at retail prices.

Is a markup on parts of well over 100% typical in the building
industry or is this a simple indication that he doesn't want the job?


So far I only have one estimate, as I don't like wasting 3 peoples
time for jobs of less than half a day, when only one is going to get
the job.

I am wondering if its worth getting any more or is this typical.



As a professional, I charged for my time. If I bought in services for
clients, I passed them on at cost.

Which if you literally do that (i.e. sell at your buy price), means
you lose money on every part sold - since procurement takes your time,
and bites into your cash flow, warranty replacements then just
increase that loss.

Part of that is clearly time and hence billable as such. I'm not sure
about risk of faulty parts, incurred as an intermediary.

If I supply equipment to a customer, and something fails, then its my
responsibility to fix, even if the failure was not my fault.

That costs time and money, and in the circumstances, its time and money
I can't recover that from the customer if the equipment is still under
warranty.

So that is an overhead that one has to build into your prices.


Even if the OEM will replace the kit FoC, there is still the time spent
diagnosing, and orchestrating the process.

(hence why some OEMs will voluntarily take on the responsibility for
warranty support directly with end users even though they have no legal
obligation to do so - it can be a cost and risk reduction exercise for
the retailer, that makes those companies products more attractive to sell)


However, I got a quote from a gas fitter recently who charged a
fairly high rate for his time AND wanted to sell me a lot of parts
with a 100% mark-up. This made his hourly rate of charge really high!

100% might be taking the pee, although it depends on the market and
the product.


Surely it should depend on time and risk?

Not necessarily. For businesses that make a significant proportion of
their income though product sales, then the margins will tend to be
higher since they need to cover the majority of the costs of operating
the business. Pubs for example will typically mark up drink well in
excess of 100%, and most of those are running very close to the edge
even then.

If you go buy a sandwich in M&S you will pay several 100% over the cost
of the bread and fillings. You are paying for many things, not just the
cost of the materials.


--
Cheers,

John.

/================================================== ===============\
| Internode Ltd - http://www.internode.co.uk |
|-----------------------------------------------------------------|
| John Rumm - john(at)internode(dot)co(dot)uk |
\================================================= ================/