Material Markup: How Much Should You Add?

You drive to the merchant, queue at the trade counter, pay for the parts, store them in the van, carry them to site and fit them. Then you bill the customer exactly what you paid. If that sounds familiar, you are working for free on a big part of every job.

Material markup is the slice you add on top of what you pay for parts and consumables. It is not a con — it pays for your time, your cash being tied up, and the risk of returns and wastage. The question is not whether to add it, but how much.

Why you should mark up materials at all

Handing materials over at cost feels honest. In reality it quietly drains your business. When you buy parts you are doing real work the customer does not see:

• Driving to the merchant and queuing at the counter
• Paying up front, so your cash is tied up until the invoice clears
• Storing, transporting and protecting the parts
• Handling returns, breakages and ordering errors
• Carrying the warranty risk if a part fails

None of that is covered by your labour rate, which is meant to pay for the hours you spend with tools in hand. Markup covers the procurement side. Skip it and you are subsidising every customer out of your own pocket.

There is also a buying advantage to share in. You get trade prices the customer cannot. Charging somewhere between your cost and full retail is fair to both sides — they still pay less than they would at a retail counter, and you get paid for sourcing it.

How much markup is normal?

There is no legally set figure, and rates vary by trade, job size and region. As a rough guide, many UK trades add somewhere in the region of 10% to 30% on materials, with smaller, fiddly items often marked up more than big-ticket ones.

A common pattern looks like this:

• Small consumables (fixings, cable clips, jointing compound, sealant): high markup or rolled into a flat "sundries" line, because the admin per item is huge relative to the cost.
• Mid-value parts (a consumer unit, a few rads, a pump): a steady percentage, often around 15% to 25%.
• Big-ticket items (a boiler, a full bathroom suite): a smaller percentage, because 25% on a £2,000 item is a number the customer will notice and question.

The logic is simple: percentage markup should reflect the hassle and risk, not just the price tag. A box of fittings is more faff per pound than a single expensive unit.

Tip: Set default markup bands by price tier rather than one blanket percentage. It keeps your quotes consistent and stops you eyeballing it differently on a tired Friday afternoon.

Markup is not the same as margin

This trips up a lot of good tradespeople, and getting it wrong costs you money. Markup is added on top of your cost. Margin is the profit as a share of the final price. They are different numbers.

If a part costs you £100 and you add 25% markup, you sell it at £125. But your margin on that £125 is only £25, which is 20% — not 25%. To actually keep 25% as margin you would need to sell it at about £133.

It is worth getting this straight before you build your pricing, because a "25% markup" and a "25% margin" leave very different amounts in your pocket across a year of jobs. We break the maths down properly in markup vs margin for trades.

How to charge material markup without losing the job

Customers rarely object to materials being marked up — most expect it. They object when it feels hidden or random. So make it clean and consistent.

Decide how visible to be. You have two honest options:

1. Itemised: list parts with the price the customer pays, and keep your buying cost private. You are quoting a supply price, which is standard practice.
2. Bundled: quote a single "supply and fit" figure per task, with markup baked in. Many customers prefer one clear number to a long parts list.

Both are legitimate. What you should not do is show your cost price and then add a visible "markup" line — it invites a negotiation you do not need.

Keep your numbers tidy. Round to sensible figures rather than carrying £127.43 lines into a quote. Clean numbers read as confident pricing.

Quote fast while the customer is keen. The longer a quote takes, the more time a customer has to ring round and price-shop your materials line by line. Pre-set markup rules and saved price items let you turn a site visit into a sent quote the same day. A job-management system like Gaffer lets you store your common parts with markup already applied, so a quote that used to take an evening at the kitchen table takes minutes — and goes out before a cheaper rival has even replied. If slow quotes are costing you work, see why you are losing jobs to slow quotes.

Watch out for these markup mistakes

• Forgetting price rises. Merchant prices move. If your saved markup sits on last year's cost, your "25%" might really be 5%. Review your cost prices periodically.
• Marking up everything the same. A flat percentage over-charges on big items and under-charges on small ones. Use bands.
• Eating the wastage. Off-cuts, the extra metre of cable, the spare elbow you bought "just in case" — build a small allowance in rather than absorbing it.
• Ignoring delivery and collection time. If you spent an hour fetching a special-order part, that is labour, not markup. Charge it as time.
• Letting deposits lag. On material-heavy jobs you are fronting serious cash. Take a deposit to cover parts up front so you are not banking the whole job before payday.

Getting paid promptly matters even more when your money is tied up in materials. Tightening up invoicing and reminders is the other half of the picture — see how to get paid faster.

FAQs

How much markup should I add to materials?

There is no fixed rule, but many UK trades add roughly 10% to 30% on materials, with smaller items marked up more heavily than big-ticket ones. Set bands by price tier rather than one blanket figure, and review them as merchant prices change.

Is it legal to charge more for materials than I paid?

Yes. Charging a supply price above your trade cost is completely normal and legal — you are being paid for sourcing, transporting and warranting the parts. Just quote a clear supply price rather than exposing your cost and adding a visible markup line.

Should I show customers what I paid for materials?

Usually not. Quote the price the customer pays, either itemised as a supply price or bundled into a "supply and fit" figure. Showing your cost price invites haggling over a margin you have earned fairly.

What is the difference between markup and margin on materials?

Markup is added on top of your cost; margin is profit as a share of the final price. A 25% markup gives only about a 20% margin, so decide which you mean before you set your pricing or you will keep less than you expect.