How to keep margins high with costs of materials soaring

Are you stuck with a fixed price contract with the cost of materials going through the roof? Or are you about to enter a contract and want to know how to protect yourself? Keep reading to learn how to maintain healthy margins with your contracts.

Choosing products that are warranty backed, including labour warranty will protect you from potential extra replacement costs and call backs. Shopping at an Australian supplier means your products are in-stock locally, saving you from delays and associated costs.

On average, contractors reduce material costs by up to 30% by using JH Market compared to branded products from other wholesalers.

Talk to us today on 1300 000 808 to see how we can help you navigate the current challenges with fixed-price contracts whilst still maintaining a healthy margin.

What if you haven’t signed a contract yet and want to know how to protect yourself?

To prevent cost risks and keep customers satisfied before entering a contract, there are some common methods that you can use.

Cost plus contracts, ‘Rise & Fall’ and ‘Shared Pain/Gain’ clauses

These sorts of contracts and clauses allow you to keep your margins healthy by accounting for unforseen price increases.
Depending on your state, there may be some restrictions - for more information on cost plus contract restrictions in Victoria, please visit Consumer Affairs here.

Allow time between signing the contract and starting the job

Minimising the time between signing the contract with your customer and beginning the job, will help you provide the best estimated cost. You'll be able to continually review the price of all products you’ll need for the job, and be able to factor price changes into your contract.
This method won't completely keep you safe from unforeseen price increases, so it’s great to pair this method with rise and fall clauses or cost plus contracts.