Working with contractors: material markup ?

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  #1  
Old 01-17-16, 02:54 PM
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Working with contractors: material markup ?

First, sorry if this isn't the right place for this. I've loved the info I've gotten in these forums but this project is too big for me.

Is there a better place to ask questions about working with contractors?

If anyone could comment, I'd appreciate it. We're working with a contractor for a bath remodel. Friends recommended the guy based on a remodel he did for them recently. The friends supplied all the fixtures.

the contractor suggested we work with a couple places he works with for tile and fixtures. after spending a couple hours at the bath fixture store, we asked 'so we'll pay you for the items?' and they said no, they send the quote to the contractor and he sends it to us. Likely he'll mark it up? how much would you consider reasonable? We're looking for all the things we picked and seeing prices on the web... at what point do you order those exaact things elsewhere, snubbing him and the place he recommended?

thanks!
 
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Old 01-17-16, 03:28 PM
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He "might" get a Contractor's Discount (15-30%) and "might" share it with you (if he WANTS the Job).

I once had a major re-model being done by a good Contractor who marked everything up 15%, including the dinky retail materials that I could have bought for less than he did.

What really bugged me was his charging me his Hourly Rate for all the time he spent shopping PLUS marking up those items ( a form of double dipping).

But he did good work . . . . except for anything involving instructions that were not written in French; and then I had to be prepared to get an accurate translation done from English to French.

I found that odd; but we're only 20 miles from the Quebec Border; so I've come to accept that.
 
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Old 01-17-16, 03:36 PM
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Vermont: Thanks for the info. Yeah, he may get a better price. and then he marks it up, that's fine with me. I just hate wondering what the numbers will be. if we can find an item on the web for $400, if we walked in the shop they'd charge $450 but through him it turns out to be even more, makes it tough for me to want to shop local : )

and yeah, mark it up AND charge for shopping? don't like that either. that's the thing - we do all the selection. if he's just marking it up as a finders fee to more than what I could get it on my own would upset me. But I have OCD and ADHD, so impatient, always 2nd guessing things, hard to have faith in others doing right and treating us right and would just like to do things on my own but don't have the time and skills to take on a big remodel.
 
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Old 01-17-16, 03:39 PM
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It's easy enough to get an idea of what something costs and see if the markup is reasonable.
For me, the number one reason I recommend a certain supplier(s) is to have some kind of control over quality.

I remodel mostly Kitchens, and when I find out the customer purchased their own faucet and disposer I sometimes cringe.

I want to at least give some input on name Brands or quality, and warranty.
 
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Old 01-17-16, 03:49 PM
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Having owned my own business for many years it is difficult to decide where to figure your profits. If a contractor passes all materials along to the customer and does not charge for miscellaneous time like talking to customers, picking up materials, planning jobs, then they would have to increase their per hour rate to make sure their bottom line was in the black. But, when they do that, the customers go elsewhere to get a lower dollar per hour for labor. Quality work from a reliable contractor who has good references and apparently isn't abusing his customers, deserves what he is asking. Our threads here are full of disappointed home owners who shopped for the lowest price.

Bud
 
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Old 01-17-16, 03:50 PM
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I don't mind the customer picking out what they want. After all they have to be happy with it, and I don't want them coming back to me saying something was not satisfactory to their design expectations. They buy it, they are happy. I do, as I am sure Brian does, warn of inferior products or questionable warranties, and make suggestions. I don't do large markups on materials. I am not in the market for that. I provide materials, yeah, I mark them up to cover my time and overhead. I mainly provide labor and free advice.
 
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Old 01-17-16, 04:40 PM
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Talk to your contractor. Easy advice but sometimes hard to do because the customer (you) is fearful of upsetting the contractor by inferring they (contractor) will be gouging the customer on the prices of the materials.

If you see something on the Internet that you like, print out the page and show it to the contractor. Ask if it is a suitable material for the job and if the price is comparable to what the contractor would charge or if the contractor would be willing to have the customer purchase the material.

Remember, the contractor wants the customer to be happy in all aspects of the job. He will likely balk if you want to substitute a really cheap foreign made material for the high-quality one he would have normally used because he KNOWS the cheaper material will not make the customer happy in the long run. Most contractors are totally up front about this.

Also understand that SOME manufacturers make items specifically for big box mega-mart homecenters and these items ARE significantly less expensive than the items the same manufacturer makes for general sales. Specifically, there are models of faucets that look identical but the big box model will be less expensive than the model from the plumbing supply house. Trust me, there ARE very real differences between these models and the more expensive (plumbing supply) model is usually well worth the additional cost when averaged over the lifetime of the faucet.
 
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Old 01-17-16, 05:25 PM
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If you have a job, and work 9 to 5 you expect to get paid for your time working for your employer. How is it any different if I, as a contractor, spend a whole day with you the customer shopping for fixtures, picking out tile, suggesting mosaic or glass accents, coming up with an ultimate design that you like. Would you work a whole day at your job for free? I think not, why treat a contractor any different from someone else. Me, I don't care who pays for the materials. But I will ask you up front what you are going to do. And maybe, your estimate will reflect adjustments in it either way. Just saying, that nobody works for free in the end and if you are that uncomfortable with your contractor that you are going to nickle and dime him, then maybe you really can't afford someone to do the job for you. I have a mortgage, I have a daughter in college, I have car payments, loans, and all the same expenses you have. What I don't have is a guaranteed paycheck that I know how much money I will have each month. If I have employees, I have the further obligation to pay them, cover workman's compensation, Liability insurance, payroll taxes and wear and tear on my tools and vehicles.

Given that, what you will get from me in return is a turn key start to finish project that meets your expectations, comes in on budget and on estimate. I will also stand behind my work. A small markup on materials to cover my time is peanuts in the large picture of a big remodel project.
 
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Old 01-17-16, 05:27 PM
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thanks guys! I appreciate the reality check. Its not the question of quality here. Totally agree with the contractor wanting to use quality parts. It's my paranoia that we're going to be gouged - I realize -that's putting the cart in front of the horse. These are things we picked out. His involvement was to suggest we deal with these shops he knows and has dealt with in the past. totally realize that familiarity with them helps him - they know how he operates and vice versa. I'll just wait to see what his quote for those items comes in at.

What about this part of my paranoia: We got his price for his work - we supply fixtures and he'd install the sinks, install the tile, frame out doors, electric, plumbing work, etc. we signed and gave him money. Then he put us in touch with the places he knows. and the shower walls / door glasswork price is unknown to us (he's not doing that part of the job).

So the total project cost is an unknown. This is our first contractor job so we're newbies. From the sketch he made of the work to be done, I would think (and could be wrong) that the glass work could be estimated. And whether we choose quality items (toto? that a good brand?) or gold plated would have an effect on the fixtures costs. When someone signs with you, did they already do legwork on fixture costs? Do you rough out those costs for them?

And same for glasswork - I'd hate to find out at after he does the whole thing then we get the glass company in, they say - oh, this will cost loads more because of the design. If you did this or that, the glass job would be much less costly.

is it on us to get those estimates before signing with someone? Are we setting ourselves up for problems?
 
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Old 01-17-16, 05:38 PM
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Not sure if you got my previous post, we posted at the same time.

You need to request if the estimate is "all inclusive" of every aspect of the remodel. If you are hiring this guy for tile and a couple of other things, then plumbing, electrical, and glass would be on you to get estimates on unless you specifically requested a complete remodel estimate. I am a turn key contractor. I will spell out every step and estimate every portion even is I an not doing it -such as glass. If I am unsure of an item as it is custom, I will at least include a ball park number so something is there for you to shop with and stay within your overall budget. You have heard of allowances for cabinets and such, they are ballpark numbers worked into the estimate. If you go higher, you are expected to pay for the upgrade. But I try to both include and highlight those things that I will not get money for but included for you in the estimate so you can better plan. I may be the exception to the rule, but I try my best to share experience with each new client so there are few surprises.
 
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Old 01-17-16, 06:24 PM
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the shower walls / door glasswork price is unknown to us (he's not doing that part of the job). So the total project cost is an unknown
You said you have OCD, so I'll just get to the point. Either you or the contractor should have known the estimated cost of additional work to be performed after this contract is complete.

If this is a matter of hardware cost only, just purchase it yourself. Buy quality.

Communicate your concerns to the contractor. If you signed a contract in your home, you have 3 days to cancel (in every state AFAIK)
 
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Old 01-17-16, 06:42 PM
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FWIW, having occasionally been a customer and occasionally a contractor...

Contractors have to make a certain profit on a job. That's why they are in business, after all. Good ones know very well what that profit has to be, others may just use rules of thumb. As a customer, I don't worry about details like markup on materials or labor rates. The way I protect myself against getting gouged is to get multiple estimates from companies that I know or believe will do quality work and use quality materials. I make sure the quotes are apples to apples, meaning the same scope of work is used by all. If there are materials I want to specify, I make that clear up front. I understand that sometimes once work has begun there can be unforeseen circumstances that increase the work, and I expect to pay for that. I also understand that if I make a change that causes rework or additional work (or less work...although that doesn't usually happen) that there will be a cost adjustment for that too.

I'm talking here mostly about bigger jobs. Not worth my time getting three quotes and checking references on a $500 job.

One last point...I'm not against paying for an estimate on a bigger job that involves significant work for the estimate. It's not common practice around here to charge for estimates, but in some areas it is.
 
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Old 01-18-16, 10:47 AM
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Thank you everyone!

Thanks for all the great info!!!
 
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