Markup on materials

Markup on materials isn't just profit. Plenty of tradies add 10%, wait 30 days to be paid, and end up lending their suppliers money for free. Here's what markup has to cover, and how to set it in Karven.

What markup covers

• Cash flow. You pay the supplier before the customer pays you.
• Waste and offcuts. Some of what you order ends up in the skip.
• Running around. Trips to the supplier, fuel, handling, storage.
• Mistakes and changes. Wrong size, wrong colour, a customer who changes their mind.
• Profit. The reason the business exists.

A small markup covers some of that list. Work out what your own costs are before you settle on a number, and talk to your accountant if you're not sure.

Setting it on a line

In the quote editor, open the options on a line (the small settings button at the end of the row) and fill in Cost $ and Markup %. The rate works itself out. Your cost and markup stay on your copy only; the customer sees the rate and the total. See your cost and your private profit.

Your profit % on the whole quote

The quote editor also has a Your profit % for the whole quote. It goes on top of every cost, so it's inside every price the customer sees, and only you see the percentage. New quotes start at the profit % you gave when you set up, and you can change it on any quote. If you quote decking, concreting or fencing, you can change the starting figure in Settings → Trade → Full calculator (advanced).

How much detail the customer sees

Choose Full breakdown, Section totals or Total only when you send. On a full breakdown the customer sees each line's rate, never your cost. Some customers like the detail; others start picking at every line. See what your customer sees.

A worked example

$4,000 of timber at your cost:

• 10% markup: you charge $4,400 and keep $400 to cover everything above.
• 30% markup: you charge $5,200 and keep $1,200.

On six jobs like that a month, the difference is $4,800 a month. The customer never sees your markup, only the price for the job.