Builders margin what is

There is a common misconception that builders run projects on huge margins and that most building companies make excessive profits. I have made a long term successful career out of building and as a member of the Master Builders Association Victoria for over 28 years, nothing could be further from the truth.

A builders margin is the percentage added to the cost price of a building project and can vary from builder to builder depending on the size of the business or type of building service offered. This margin covers all of the business running costs including the profit for the builder. Also, building variations may attract a different margin compared to the main building contract. For you, the client, to be able to make the right decisions, you must trust your builder and have confidence in their quoting process.

This is only possible if you engage an experienced, reputable builder that is transparent with their quoting process and their documentation.

Username or Email Address. Remember Me. Note that small builders may put much larger margins on to cover their own personal supervision because they do not use employed supervisors.

It is hard to generalise because projects differ in their size and complexity. A builders' margin is usually a percentage of the build cost, not a pre-defined dollar value. Therefore, it can be adjusted if the overall cost of the build changes.

While margins may vary between builders, the smallest margin doesn't necessarily mean the best deal. In fact, it can often mean the opposite. If a builder doesn't include the necessary margin and something goes wrong, you may be incurring larger costs than first anticipated. As with any large purchase, you must decide if what the builder is offering is value for money.

This is where the idea of quality and understanding market value comes into play. For example, while the supermarket and the local bakery may both sell bread, the quality will vary significantly. No matter how much you barter, it's very unlikely that you'll get the bakery bread at the supermarket price. It's important to consider this idea when talking to builders about their quotes. So, what should you remember when you're looking for the best value?

It can be tempting to head to your local hardware store, take note of prices of common elements like power points and paints and then compare this against the costings of a builder's quote. However, you need to consider that each price goes beyond just the material itself -- it includes the labour, the contractor's overheads and of course, their margins. For example, a plumber doesn't just supply the pipes for your kitchen, they also need to travel to site, provide labour, tools, overheads and their own margin as well.