Inflated invoice when the builder has ordered building materials

[tommib]

The material cost was 150,000 if you missed this. No, the craftsman buys with HIS money and then sells to the customer!

Ok, missed that it was the material cost that was being calculated.
Anyhow, as several have already pointed out above, it's my time when the craftsman goes shopping. That's why it's not ok to add on for "material handling." He's buying material for me, not for himself. It's double-dipping to charge first for time + trip to the lumber yard and then add on for material handling (what he did in the time I paid for). As a customer, I am naturally most interested in the end result and price, but I also don't want to feel cheated out of a lot of money due to the craftsman's setup. I'd rather have the option to buy and provide the material myself!

 

[Göran.W]

I don't think a 12% markup is dangerous but rather very low.
Flip it around and think about it like this.
If TS had picked up the goods themselves, they would have avoided the markups but would have incurred a lot of other costs.
Then the builder gets what he needs right then.

 

[Per_2014]

It should cover the overhead costs if it is a larger company.

 

[Andreas 71]

You get what the material costs on the invoice. But that's the regular price. The builder has a 10-50% discount. If you complain about the amount, he says that's what it costs. You don't know how much discount he has. Plumbers are definitely the worst, then electricians, then tilers, then comes the builder... buy everything yourself, bring the craftsman there, he does the job, return what is left over.

 

[JakeoMalin]

Yes, it is terrible that craftsmen are allowed to earn money. The worst part is that I believe your extension would have been even cheaper if you did it yourself. He has probably charged for labor as well.

 

[lbgu]

You get what the material costs on the invoice. But that is the regular price. The builder gets a 10-50% discount. If you complain about the amount, he says that's what it costs. You don't know how much discount he has.

The problem is that it's not that the craftsman has a discount on the 'normal' price. The problem is that the craftsman gets a price on the invoice that is much higher than the normal price. Then the craftsman and the building merchant have an arrangement where they share the profit without the customer knowing, which at least I see as pure fraud.

No one would have probably complained if it were the case that the craftsman got, say, a 20% discount on what the item would have cost if the customer had bought it themselves and then kept all or part of that discount.

 

[Pontstone]

In this thread, one can probably conclude that the craftsman = entrepreneur.

 

[Pontstone]

In this case, the entrepreneur probably told the customer that I take the material from the cheapest place and add a 12% markup. The 12% is nothing to argue about, but the fact that the same chain sells the same thing noticeably cheaper not too far away is debatable. If it had been me, the entrepreneur would have had to live up to their statements.

 

[PCLarsson]

A 12% markup is something one can both live with and understand, I think. The important thing is that you then get the builder's net prices, but this must of course be discussed in the procurement and then ask the builder to disclose discounts. If he says he doesn't have any, we all know he's lying...

 

[Sir Duke]

The answer is: Yes, the invoice tastes salty.

You should have asked in advance: What does the material cost?

The builder, on the other hand, is bound by his commitment that he could buy materials cheapest at that place.

I had adjusted the invoice to what others charge in the area and added 12%. Hold back the rest of the money and if the builder wants to earn it, he has to work a little.

 

[jimih]

All Entrepreneurs have the right to set the prices they deem necessary even if they receive a discount. 12% on all purchases is not particularly much and it is reasonable for the Entrepreneur to charge for bringing in materials!

As far as I know, no one here has complained about a 12% markup. It's the 40% markup from someone who implied "good prices on material" that has irritated people a bit.

 

[pappskallen]

This is where I think there might be some misunderstandings sometimes. The customer thinks they are paying for the craftsman's time, car, and mileage to go and buy what is needed for the customer's job. Of course, the craftsman should be paid for invoicing, etc., but one doesn't think it involves any significant mark-ups.

And in the normal case, we're talking about 5-12% which in the context can hardly affect the final bill significantly. In those percentages are, as you say, invoicing, risks for material defects, etc., etc....

Maybe customers should sometimes ask a bit more beforehand, and maybe craftsmen should sometimes be more clear about the setup to avoid discussions afterward.

Very wise words!

 

[pappskallen]

No one here, to my knowledge, has complained about a 12% markup. It's the 40% markup from someone who hinted "good prices on materials" that has irritated people a bit.

But.....the craftsman has indeed added 12%...... Everything else is just loose speculation and indications!


so this is how it normally works according to my 20-year experience (for builders then)
The builder uses one of the big well-stocked stores, Beijer, Woody XL. etc...
When he shops there, he gets a discount, usually 5-25%.
When he does a job for a client, he buys with his discounts, invoices these straight off, and adds the agreed-upon markup. E.g. 12%
In addition, he might have a kickback in the form of an annual bonus based on turnover in the store. I would guess that this varies between 1-5% and to reach 5% probably requires a hefty annual turnover.

That the client then managed to find a cheaper price naturally sounds a bit strange because I assume that the craftsman has sent the invoice basis, which one should do according to practice....

 

[Sir Duke]

That sounds contradictory - you say it's just speculation that the handyman has a discount, but assert that normally they do have a discount.

Sure, TS has no proof that the handyman has a good discount but conceals it and fully bills the customer.
What he reacts to is that the handyman said "his" store was the cheapest but that it wasn't true when TS checked it.

 

[dudero]

But how do you know that the rest of the goods are not dirt cheap?