How do you get over the “guilt” of product markups.
Of course when you’re offering a service that includes a product or material there’s going to be markups involved, but I always feel like I’m doing something wrong, almost like they’re going to go to the store and come back with “you charged me $17 per unit when the store only charged me $15 per” is there a way to get over this?
In my opinion, you shouldn’t feel guilty about markups if you’re providing real value. Customers are not just paying for the physical product — they’re paying for your time, experience, sourcing, transportation, warranty risk, convenience, and the responsibility you take on when you install it correctly.
Most customers are hiring you so they don’t have to spend their Saturday driving store to store trying to figure out which product to buy and hoping it works. That has value.
That being said, transparency goes a long way. I personally think it’s smart to either:
Both are normal in business.
Stores also give contractors discounts, rewards, and rebates because we consistently bring them business. That’s part of operating professionally, just like any other industry. You shouldn't be giving away your pro-xtra dollars or Lowe's rewards points to customers; that's your reward.
At the end of the day, if you’re honest, upfront, and delivering quality work, there’s nothing wrong with making a profit. A business has to be profitable to survive and continue serving people. I haven't been profitable for the last 5 years; this year is the first.
It can be a variety of reasons, most important is how do you run your business and what is included in the price/markup. We offer fair wages, benefits etc. We also have a supervisor, customer service rep and sales rep. We run a larger company which means more reliability for the customer. This is reflected in our pricing.
The way we think about it is that we have time, transport costs, and most importantly warranty handling costs associated with the product. If the product fails, the vendor might give you a replacement but they probably arent paying you for your time to handle the reinstallation and admin time. Its kinda like a little insurance policy.
One more thought here... on rare occasion we will have a customer say "Hey i can get this x% cheaper on Amazon... can I buy it myself?", our answer is "Absolutely. Just know if there is an issue with it you are going to have to deal with the manufacturer directly and cover any associated labor costs." That typically stops the conversation quickly because they all the sudden understand why it costs more.
Why do you feel "guilt"? Do you believe you don't deserve to make money when you are providing a high quality service?
