Bottom Lines There are still ways for remodeling contractors to satisfy the customer and yet be able to justify their markup or at least make money on the project.
Instead of marking up high-priced items in the same way as the rest of the products, a company could probably break the markup down to 15% to 20%, while keeping the labor figure at the original price, and make money on the total.
Another possible way to be able to make a profit while farming out a larger percent of the project is to lump the cost of the company’s own crews, who are handling 20% to 30% or more of the project, and the cost of the labor performed by the subs together. Make this an integral part of the total job cost to the customer.
For years, remodeling companies have subbed out the electrical, plumbing, and HVAC products, including their installation, and then marked it up the normal 50% to 67% number.