# What's An Average Margin on Lumber and Materials for Your Work?



## gerrym526 (Dec 22, 2007)

As a business model experiment, I'm logging the hours spent on my current project. Assigning a cost to labor then becomes fairly straightforward in determining the price of a piece.
What I don't have any handle on is what is a healthy margin on materials-ie. what's your typical markup on lumber, hardware (drawer slides, pulls, etc.), and finishing materials?
Thanks in advance, as always, for the help.


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## jeffthewoodwacker (Dec 26, 2007)

I track all my expenses involved in making each project. As a rule of thumb I normally will double the cost of materials and add to my labor rate to arrive at the final price - this covers the finishing materials, and operating costs. Shipping cost is actual price to ship. I normally will try and purchase hardware that I use all the time in bulk to keep pricing down. Almost all the wood I turn costs me nothing - a tree service that I have developed a good working relationship knows what I like to use and drops the pieces off on my property, or lets me know where to pick them up. For the turned pieces that come from this wood I price based on difficulty of turning, wood used and time involved. Hope this helps.


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## hObOmOnk (Feb 6, 2007)

My cost of materials and direct expenses seldom exceeds 10% of the retail price or 20% of the wholesale price.


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## huff (May 28, 2009)

Gerry, That's a great question you posted. Pricing our work is always one of the hardest things to do when you're trying to make a living at this. The best advice I ever got was from a semminar I attended years ago done my Marc Adams…......and I see you have taken some classes at one of his schools. There's a lot to take into consideration both on the labor side of the job and the material cost of a job, and where certain catagories should be listed to get a fair price for both you and your customer. I don't know if Marc Adams has written a book on pricing (I know he has a lot of books out there), but if so, it would be a good source. If you would like to PM me, I will be glad to share any info that might help.


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## RvK (Nov 22, 2009)

Well, most of the things I've made so far have been for family and friends, so I typically get paid in trips to Outback Steakhouse


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## a1Jim (Aug 9, 2008)

Hey Gerry
It's not always a matter of what you mark up materials and supplies but what the job will pay. As an example you may build a library and your materials may be 10% of your overall amount the customer pays or if you build special boxes that take $100 worth of hardware and wood and your profit may only be 20% of the amount you charge. It really boils down to is what your work is worth and what a customer will pay for said product.


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## miles125 (Jun 8, 2007)

I feel comfortable at around 20%. But you have to watch for jobs heavy on materials and short on labor since you can easily and very noticably price yourself out of a job.

As for overhead, i'd say most one or two man operations most likely have a higher per man ovehead than a company of 50 or 100 employees. Just look at utilities cost to get the gist of what i'm saying. A 100 man shop is nowhere close to paying a 100 times more for utilities than a one man shop.


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## Innovator (Jan 20, 2009)

Just me 2 cents added here…

I don't put all materials into the same bucket; hardware can be quite expensive at times so it will be marked up less than other materials. Typically for specialty hardware I charge 10% above retail and other materials 20 - 30% above retail. With that being said I add my labor, my overhead rate, my markup and I have one more box called "Misc" This is where I decide if the project is undervalued, I will increase the price. This will allow me some flexibility in pricing.

Once again just my 2 cents!


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## gerrym526 (Dec 22, 2007)

Guys,
Wanted to thank all of you for your really good "woodworking business" advice, it has helped me understand what's made all of you successful. Woodworking is definitely a challenging business, and you've been able to succeed and prosper-my hat's off to you all.
Happy New Year, and my best wishes for success.
Gerry


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## timpletcher (Dec 25, 2009)

I work with a lot of specialty products and the markup varies when a retailer resells the product. on small volume its 30% to 50% and on some larger projects it can get as thin as 1% to 3% just depends on all the factors involved.


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## JGM0658 (Aug 16, 2011)

For wood I mark up the amount of "waste" my design indicates. There is always waste on boards and sheet materials, this way I know I am covered if I make a mistake.

For hardware, slides, handles, etc. I only mark up the delivery charge as I don't want to nickel and dime my customers for what a amounts a pittance.


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## DS (Oct 10, 2011)

63% Gross Margin. All day long.
Unless you think that makes me high bidder, think again.
I've worked my contribution costs down to the bare minimum at the highest quality.
It makes me very competitive and I make money too.


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