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Old 04-28-2019, 09:26 PM   #1
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Default Markup articles needed.

I need professional articles that explains material markup, articles that itemize costs of overhead to stay in business. A definition of some kind. Preferably related to the plumbing industry and service work would be better.

The article has to justify material markup of let's say 50% or more.

What I do not need are articles that show me how to come to those numbers.

Thanks in advance.
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Old 04-28-2019, 10:09 PM   #2
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Out of curiosity, why?
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Old 04-28-2019, 10:22 PM   #3
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Tango you're not talking about mark up, you're talking margin.
You have to markup inventory to maintain you're margin.

You must factor in all the costs your inventory. Everything has to be included, is the inventory going to be around for ten days, months or god forbid years. The longer it sits the higher the markup has to be.

Once you figure that out you check your competition and see what they charge.

I found out once i quit dealing with Big Box stores my margin improved.
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Old 04-28-2019, 11:16 PM   #4
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@OpenSights I won't say why for now. I may say the reason eventually but I won't make any promises.


@ken53 Like I said previously my main quest is why plumbers need to charge a markup on materials and then why a high markup to be able to stay in business.

There's an explanation somewhere that markup is needed on materials otherwise the hourly rate would be too much for customers to accept. This example and the ones I mentioned first are the type or articles I need to find. I need those articles from respectable places to prove a point.
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Old 04-29-2019, 12:06 AM   #5
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heres an old thread on mark up..
https://www.google.com/url?sa=t&rct=...vHj4AwA3Ve0cDA
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Old 04-29-2019, 06:56 AM   #6
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Labor burden calculator might help. Read Richard DiToma articles in the PHC(?) magazine. All of them.
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Old 04-29-2019, 07:47 AM   #7
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Here's an example of what I'm looking for. It states items should be doubled for a business to succeed. It's called keystone.

The article listed is professional looking which I can use.

https://www.entrepreneur.com/article/193986
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Old 04-29-2019, 08:46 AM   #8
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Quote:
Originally Posted by Tango View Post
Here's an example of what I'm looking for. It states items should be doubled for a business to succeed. It's called keystone.

The article listed is professional looking which I can use.

https://www.entrepreneur.com/article/193986

heres the problem I see with that, the article specifies retailers, not service...retailers sell a product and that covers all expenses, in service you sell your labor and product..so you charge for your time..example..you go into a store you dont pay for the sales persons time helping you and then buy a product, you just buy a product..and all your profit needs to come from that, so it is justified..but when you go to a home on service you bill for your time and whatever tools you use and what ever materials you use, so trying to defend a 100% mark up on materials is hard( thats what doubling your product cost is 100%)...


The Ethics of Markup
Even though there is no hard and fast rule for pricing merchandise, most retailers use a 50 percent markup, known in the trade as keystone. What this means, in plain language, is doubling your cost to establish the retail price. Because markup is figured as a percentage of the sales price, doubling the cost means a 50 percent markup. For example, if your cost on an item is $1, your selling price will be $2. Fifty percent of $2 is $1, which is your markup.
This definition of markup was probably developed to avoid using a term that admits to a 100 percent increase. Most consumers would be appalled that you are selling something for double what you paid for it.
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Old 04-29-2019, 08:51 AM   #9
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Quote:
Originally Posted by Tango View Post
Here's an example of what I'm looking for. It states items should be doubled for a business to succeed. It's called keystone.

The article listed is professional looking which I can use.

https://www.entrepreneur.com/article/193986



you need to find comparison plumbers and their mark up and cost of doing business to show how others are doing it and be in a group not a single business with your pricing..
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Old 04-29-2019, 10:44 AM   #10
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https://www.reevesjournal.com/articl...aterial-markup
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