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?
After years of giving away whatever deal I can get I have learned that the most fair thing for us all is to charge what you must to cover several things:
All of these are rational factors and customers usually see the value in what you’re doing for them by the end product
No guilt, prices keep going up, if you aren't making any money on your materials, you'll **bleep** your business
In my opinion, you should not be feeling guilty for this. As what's been mentioned before that, there's material handling and transportation fees. There's the risk associated with it. There's the professional knowledge that and all the training that you have gone through in order to come app with a diagnosis of the correct part that needs replacing in order to fix the unit. All those costs add up to the total cost of a repair bill. Not only that, you have the overhead costs of the office office staff office equipment, the hourly wage taxes that you have to pay as a business owner. All those go into factor in the total cost of the bill. Unless you are paying this person to do the job for them. They really should not be any guilt associated with the markup cost. And to see something that's $15 being marked up to $17. To be honest, I've seen it much worse where something that cost $15 was marked up to $200. And the customer willingly paid it.
Why do you feel "guilt"? Do you believe you don't deserve to make money when you are providing a high quality service?
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.
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.
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.
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.
I totally agree with this
