If you’ve ever grabbed an item for $400 and then charged the customer $400, you’re not alone. It feels straightforward. It feels “fair”. And when you’re juggling jobs, quotes, phone calls and a team, it’s easy to think, “Yep, that’s sorted.”
But here’s the catch: the supplier price isn’t your real cost to supply.
And if you’re only ever charging what you paid, you can be flat out all week and still feel like the money disappears the second it lands.
Let’s break down a simple way to think about buy and sell rates for materials, and how to set pricing that covers your real costs and protects your profit.
What “buy rate” and “sell rate” actually mean for materials
Your buy rate is easy. It’s what you paid for the item. The receipt price. The supplier invoice.
Your sell rate is what you charge the customer for supplying that item.
The important bit is this: sell rate isn’t just “buy rate plus vibes.” It’s buy rate plus the real cost of supplying materials as part of a job.
So when a part costs you $400, the right question isn’t “Should I charge $400 or $420?” It’s “What does it cost my business to supply this properly and stand behind it?”
Why charging “at cost” hurts more than you think
Say you buy a material for $400 and invoice $400. On paper, it looks neat. In reality, you’ve covered the part, but you haven’t covered everything that came with it.
There’s the time spent figuring out the correct item, confirming specs, ordering it, and following it up. There’s the time (and fuel) to pick it up or coordinate delivery. If it shows up late, damaged, or wrong, it becomes your problem to sort, because you’re the one trying to keep the job moving and the customer happy.
Even when nothing goes wrong, you’re still carrying overheads in the background. Phone, vehicle, tools, software, insurance, admin time, invoicing, and the general cost of running a business in Australia in 2026 isn’t exactly going down.
If you never recover those costs through your pricing, you end up subsidising jobs with your own time. That’s when tradies start saying things like, “I’m busy, but I’m not making much.” Often, materials pricing is a big part of why.
“But the customer can get it cheaper at Bunnings”
Yep. Sometimes they can.
But they’re not paying for the same thing.
When you supply materials, the customer isn’t just paying for a box with a barcode on it. They’re paying for you to choose the right product, get it onsite, make it work, and (this is the big one) take responsibility if it doesn’t.
If a customer buys the wrong thing themselves, you can lose half a day trying to make it fit, or you end up rescheduling and wearing the gap. If you supply it, you control the quality and the timeline. That’s value. That’s worth charging for.
Three tradie-proof ways to price materials (pick one and be consistent)
The biggest win for most businesses isn’t finding the “perfect” markup. It’s having a method you apply every time so you’re not reinventing the wheel on every quote.
Option 1: Tiered markup (simple and common)
This is the classic approach where cheaper items have a higher percentage markup, and higher-cost items have a lower percentage markup. Why? Because the effort to supply something isn’t always proportional to the price tag. A $15 fitting can take as much stuffing around as a $300 part, so a flat percentage can underpay you on the small stuff.
With tiered markup, your pricing feels fair, stays competitive on big items, and still covers you for the time sinks.
Option 2: Handling or procurement fee (clear and confident)
Some tradies prefer to keep materials close to cost and add a separate line that covers sourcing, pickup, coordination, and warranty/admin. Customers often understand this quickly because it names the work you’re doing behind the scenes.
It also helps when a client is laser-focused on receipts, because you’re not arguing about the part price. You’re charging for the service of supplying it.
Option 3: Bundle it into the job price (supply and install)
This is great when customers care more about the finished result than the breakdown. You quote for the outcome, not a shopping list. You still need to price materials properly in the background, but you avoid awkward back-and-forth about where you bought something.
Whatever you choose, consistency is what builds confidence. When your pricing is consistent, it’s easier to explain and easier to defend.
A quick word on markup vs margin (so you don’t accidentally short yourself)
This is where a lot of people get caught. If you “add 20%” you might think you’re making 20% profit. Not always.
Markup is what you add on top of cost. Margin is what you keep from the sale price. They’re related, but not the same. You don’t need to become an accountant to price well, but it’s worth knowing that small changes in pricing can make a big difference to what actually lands as profit.
What about customers supplying their own materials?
You’ll run into this all the time, especially with people who love scrolling online deals.
There’s nothing wrong with allowing it, but have a clear policy. If they supply it, you’re still charging for labour, travel, advice time, and any extra time caused by wrong parts or delays. Many tradies also limit warranty on customer-supplied materials, because you can’t control quality or suitability.
The key is to set expectations early, ideally at quote stage, so it doesn’t turn into a painful conversation later.
Don’t let undercharged labour wipe out your materials profit
Labour is the other leak that quietly ruins profitability.
A common trap is charging a team member out at roughly what they cost per hour. The problem is, wages are only part of the cost. Once you factor in super, leave, public holidays, sick leave, downtime between jobs, and the hours that simply aren’t billable, the true cost per productive hour is higher than most tradies expect.
If you’re not sure where your charge-out rates should land, NextMinute’s online labour calculator helps you work it out properly. It’s designed to account for leave, downtime, holidays, sick leave and the real-world stuff that makes “$X per hour” very different to “$X per billable hour”. It’s a quick way to sanity check your numbers so you’re not relying on guesswork.
The goal isn’t to charge more. It’s to charge properly.
Pricing materials isn’t about squeezing customers. It’s about charging in a way that keeps your business healthy so you can keep showing up, paying the team, and doing great work without burning out.
If you take one thing away, make it this: your buy rate is the supplier’s price. Your sell rate needs to cover the real cost of supplying materials and running the job.
Once you’ve got a consistent method for materials pricing, and you’ve checked your labour charge-out rates, you’ll feel the difference fast. Quotes get easier. Profit becomes predictable. And you stop doing that thing where you’re busy all week and somehow still behind.
How NextMinute can help
Once you’ve got your buy and sell rates sorted, the next step is making sure you’re quoting that way every time (even when you’re flat out).
That’s where NextMinute helps tradies quote right. You can import supplier price books, apply your markup or margin rules so your material pricing stays consistent, and save quote templates for your common jobs so you’re not rebuilding the same quote from scratch.
Less admin, fewer missed line items, and a lot more confidence that the price you send actually protects your profit.
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