Tradesman - Price markup on parts

[bert]

And then they find they're not an exact replica and actually don't fit. Britpart were notorious for this on LR parts.

[bert]

In article <rlckjf$j0c$ [e-mail], tim... [e-mail] writes

But he hasn't got a vat number so the whole thing is just a cover for adding an extra 20% on to the retail price.

[bert]

When my son wanted a cement mixer for his business (not then vat registered) it was actually cheaper for me to buy it on my Diamond card than for him to buy it on his trade account.

[bert]

In article [e-mail]>, Jimk [e-mail] writes

And expect to pay his time if your parts actually don't fit.

[Chris Holmes]

30 or 40 years ago tradesmen could buy stuff a lot cheaper than people who weren?t. These days anyone can walk into a wholesaler or onto the internet or indeed into RS Online and get much the same price as everyone else. Regular account customers get a slightly better rate, but it?s nothing like the old days.

[williamwright]

When he buys it costs him the sale price plus the VAT. He applies his mark-up percentage to that figure, because that figure is how much he's had to lay out. What's wrong with that? The various elements of his buying price are irrelevant to him, and that includes taxes.

Bill

[williamwright]

No, it was no better or worse than the competition.

The fact is that some customers grossly underestimate labour costs and overheads. Profit on the materials just lets them carry on living in la-la land. It makes for a quiet life. It's just the way it is.

Actually the sheds sell ever such a lot of aerials. People find a way:

1. Loft job
2. Window cleaner job
3. Local handyman job
4. Son-in-law job
5. Risky rooftop DIY job
6. Balcony job
7. Under the eaves job.

Bill

[John Rumm]

Nothing wrong with that...

I think the problem is he is buying an item at say £120 inc VAT. He then applies his 30% markup. Making his retail price £156.

If he sold it at that price, all would be fine. Not being VAT registered he won't be able to claim back the £20 quid VAT on the purchase price, but also he won't need to add VAT to the sale price. So the original £20 VAT just gets passed onto the customer.

However it sounds like he is telling the end user that the price is £156

• VAT or £187 inc. So he collects an additional £31 of "VAT" from the customer on behalf of HMRC, which he has no way of passing to HMRC, and just pockets along with his original £36 of profit!

HMRC tend to take a dim view of such practices. If he issues a fake VAT invoice to the end user then he is really asking for trouble, since its likely one of the customers will stick the bill through his company so he can claim back the VAT. If that gets audited and someone checks the invoice was issued by a legit business it all unravels quickly.

[John Rumm]

I remember a customer asking me to get him a scanner once (only a fairly low end thing). So I checked with a trade supplier, and could get it for (say) £60 + £10 P&P. I then checked an online retailer, and found I could get it for £58 with free delivery. So I did that instead. I was amused when it turned up that it had been drop shipped to me direct by the original trade only wholesaler that quoted me £60 in the first place!

[alan_m]

The TV media are responsible for that. Exposing a dodgy trader they will make comments such as the charge was £70 to change a 10p tap washer ignoring that £70 (or more) is a common call oy charge from reputable traders.

[Chris Green]

It's not that rare I find for prices to be (slightly) lower from a business on eBay than direct from their own web site. I guess it gives them a bit more flexibility to provide 'trade' discounts when selling direct.

[spuorgelgoog]

My plaster from Ebay came from Jewsons.

I was slightly annoyed as Ebay packages usually come by Hermes and the nice lady carries them up the stairs.

She might not have been so nice about a pallet-load though.

Owain

[Theo]

That's likely true for 'parts' - if you look at the price breaks on somewhere like RS you can get a decent discount but you do have to buy 500 or whatever at once. As part of the university purchasing consortium we get up to 20% discount on some lines at RS and Farnell, but regular punters can get something approaching that by going through Quidco or Topcashback.

How does it work out for things like timber? Presumably buying a lorry load is still going to get you a discount over buying in ones and twos? Builders' merchants seem to be extremely coy about revealing their prices so it's hard to tell.

(at the local one I opened an account, only to discover that even while logged in to their website with a live account everything is still 'request a quote'. FFS, I'll just go to Wickes)

Theo

[Theo]

The nice thing about DIY is that, even if you cost labour at a nominal rate, the callout charge is £0.

Theo

[Dave Plowman (News]

EuroCarParts are famous for this. Different prices on Ebay, web and in store. And then there are their discount codes.

[Theo]

I find the postage is often better on ebay - often the supplier will have a flat delivery rate like £10+VAT, when on ebay you're buying one item and they calculate delivery specifically for that item alone.

Given the 'free delivery' obfuscation (it's not free, it's bundled into the price), it can often be cheaper to go to ebay to buy one item and the supplier's website to buy several.

Theo

[Dave Plowman (News]

Ah - sorry I thought it was the brand all the trade bought.

So if the trade buys what it fancies on a whim since they are all much of a much, you can hardly expect a maker to have absolute loyalty to that trade?

Then easier to simply quote a price for the job? No need for a breakdown of any sort?

So not so different as any job round the house.

[bert]

Nothing. AIUI he was quoting a price to the customer and then saying he was adding vat. Maybe I misunderstood.

[bert]

+1

[bert]

Garage friend says he's had it a few times esp with wing mirrors. Bought of ebay supposedly identical part but doesn't quite fit or colour not quite right.