A recent note said, “The client wants to furnish all the materials. They are going to give me the money to go buy the materials, should I add my markup on the materials?”
YES, YES, YES. When the customer wants to furnish the materials they think they are going to get the job done cheaper. The bottom line is they are being cheap. They don’t believe you are entitled to overhead and profit on materials you will install and, later, be responsible for if there is a problem.
If you want to play that game, be sure and set a wad of money aside to pay for the problems that you will be expected to fix and pay for out of your own pocket.
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If a customer asked me to do a job where they furnished the materials, and I got real dumb and agreed to it . . . the contract would read . . . there is no guarantee on the materials, or the labor to fix anything that goes wrong with the job or the materials, regardless of the reason, today, tomorrow or anytime in the customers lifetime plus 10 years.
When you get that request, I strongly urge you to say, “Here is how we work.” Then tell them you do the job and furnish all the materials. Might as well lay the cards on the table before you sign a contract with them. If they don’t agree, head for home.
I’m also a homeowner, we are just completing a small addition on our home. Because I was having problems tracking down subcontractors willing to talk to me, early on I decided to do the insulation myself and bought the materials.
Then I changed my mind. When I found a insulation installer to do the work, I told him I already owned the insulation – he told me to return it, he would supply the insulation himself. And he did.
Keep your eye on your business, and hold your ground with your clients.
The knowledge and experience Michael Stone gained in his 60+ years in construction has helped thousands of contractors improve their businesses and their lives. He is the author of the books Markup & Profit Revisited, Profitable Sales, and Estimating Construction Profitably, and is available for one-on-one consultations.