Originally Posted by Mr.HVAC
lol. I just got off from work and this post is taken off like crazy. Missouri bond, my point of saying is that a contractor can charge whatever he likes to cover his overhead and does not have to be based on markup %. My point of a $5 capacitor is that even if I markup %800, I wouldn't be able to cover the cost of overhead. so I have to charge anywhere $150-$200, that's like 2000%.
My comment was based only on part markup. Service call rates, hourly rates and in some instances travel charges (whether it be time or flat fee) are certainly appropriate for business to charge. Whether they stay competitive is how well they perform in accordance with what they charge. That isn't and was never my issue. It's all about ridiculous 800% mark up on parts and consumables. It's certainly not fair. Charge a reasonable markup for parts
and price the rest of your service accordingly. Most people are aware that the service industry is big money and accept that. But let someone gouge a few customers over parts cost and they will get a bad reputation real quickly...and that is hard to recover from. Advertising is great, but word of mouth will always make or break you.