Great question! Typically, you don’t want to mark up material costs (like a retail store). Rather, you would want to account for possible additions and requirements needed that are currently not accounted for by adding between 5%-10% to the overall material budget. For instance, if you are building a garage and the material (framing, electrical, siding, roofing, concrete, etc.) will have an estimated cost of about $8,000, then you would want to include an overage of about $500-$800 in the budget, making the material budget $8,800. This allows the GC the flexibility to purchase all of the necessary materials for the project without having to go back to the customer to discuss an overage. The GC can provide the information regarding the extra concrete needed without having to request additional funds. It is smart budgeting and provides a basis for a good experience for both the GC and the homeowner (by being prepared).
No a contractor normally won’t share this and you see the up charge in materials normally with a fixed bid. A time and material bid will allow you to see all associated costs for materials.
Most contractors will not reveal their mark up for materials. We sell most of the our finish materials at cost to our clients. My profit/overhead is already figured into the cost of the project.
We are transparent about materials being marked up. Both on our website and in materials we give to prospective clients during estimates, we specifically state that there is a markup and why.