Material Markups · Handyman Business Academy

Material Markups

I’d love to get some feedback from the group on material markups, because this is an area I still wrestle with.

For 30+ years in commercial roofing, we job-costed everything—labor, materials, equipment, rentals, overhead. If we wanted a 40% gross margin, we divided by 0.6. When we shifted into commercial repair work, that same system produced 60–70% margins, and it worked great. Eventually, that job costing evolved into flat-rate service pricing.

Now that I’m on the handyman side, everything feels… different. Everyone talks in terms of markups, and I constantly hear that to hit a 60-70% gross margin you need to mark materials up 150%-250%. Conceptually, I understand the math—but practically, it feels strange compared to how I’ve always priced work in the past for commercial roofing.

On top of that, in today’s world, customers are far more price-aware. With a quick Google search, most people already have a rough idea of what materials cost. That makes large material markups—200%, 300%, or more—feel especially challenging from a customer perception standpoint, even if the math technically works.

I realize that most HVAC and plumbing companies have been bought out by private equity firms, and those PE companies are all marking up by 300% to 400% or more. That's why a lot of people tell me that the plumbing companies are charging $1,000 to $1,500 just to replace a toilet. It just seems odd to me to buy a $150 toilet at Home Depot and then turn around and charge $525 (a 350% markup) for the same thing the customer can buy at Home Depot for $150.

Historically, I did the job costing, applied the margin we needed to the total cost, and moved on. With handyman work, material markup seems to carry much more emotional and psychological weight—for both contractors and customers.

I’ve been kicking around a few ideas, like:

· Pricing most work as labor-driven task items

· Including a materials acquisition fee (pickup, sourcing, coordination) built into the price

· Passing materials through at cost but charging an acquisition fee that scales with project size

· So, I would put together a materials list just as I would if my technician were going to go purchase the items, then send that list to the client to purchase the items.

I’m not fully sold on any one approach yet—I’m just trying to think outside the box without breaking margins or confusing customers.

Curious how others are handling materials:

· Are you marking them up heavily (100-300%)

· Are you marking them up lightly (30-100%)

· Or doing something totally different?

I Appreciate any insight or real-world examples.

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