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The Importance of Product Profitability Tracking

How much markup should you be applying? Should this be a different markup for labor vs. materials?

Knowing how much your products cost is crucial to ensuring a proper markup on your ever-increasing products. that you are reselling. In order to maximize profitability, it is important to have a system that automatically applies the markup allocated; otherwise, you will be manually adjusting price increases all year.

Your material markup should not be as high as your labor markup. For example, if you sell a $5,000 HVAC unit, you would not want to apply a 150% markup due to price bidding. However, a HVAC installer's labor may be marked up by 150% due to the overhead attached to that installer.

If you are unsure if you are making money on all of your products and need assistance breaking down your profit (loss), please reach out to Sedlacek Consulting for a free estimate. We want to see you succeed and maximize your profits.

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