Huston says the simplest general rule is that it should be between 20 and 30 percent higher than what the contractor paid. In other words, the retail price is sometimes a little more or a little lower. The profit margin in the percentage of cost may vary depending on the product line. The profit margin on smaller trees could be 150 percent, but the increase in large trees could be 75 percent, while the increase in new shrub cultivars is 250 percent.
But how do you know if the price is right? How much do landscape designers earn? Landscapers estimate their hourly labor costs. They also apply their profit margin above the total cost. Landscapers charge at least a 15% to 20% surcharge on residential landscaping work. In commercial landscaping work, it's 10 to 15 percent.
Any money you spend operating your landscaping business is considered an overall cost and you should charge your customers for it. Creating professional estimates can be time-consuming, so it's important that you have the right software to support your landscaping business and streamline the process. It's up to you to weigh the pros and cons before deciding which landscape pricing method is right for you and your business. In this panoramic pricing guide, we'll talk about how you can find the best prices for your business, so you can maximize your profits and grow FAST.
Of course, it's not considered unethical, but I agree that not all landscapers would be comfortable or happy with this proposal. A landscaping company often has a mark-up factor they charge that includes selecting individual plants, bringing them to the site, organizing them, planting them, and securing them. The idea is that the landscaper will generate additional sales for that nursery if he can buy at lower prices. Make a list of all your garden supplies, then determine how much material you'll need from each (it's always best to overestimate), and then add up the cost.
Now that you know what horizontal pricing method to use, let's talk about setting expectations with a prospect before accepting or starting a job. I'm sure some guys have a profit margin and then charge labor on top of that, but I've worked in the offices of several landscaping companies and most of them did it the way I described above. Knowing the cost, not only of production, but also of transportation, marketing and overheads, is the first step to finding the right price. It's not unethical to buy your own plants and ask the landscaper to install them, but it's ineffective unless you're dealing with a maintenance company or young children just starting out in business.