At the most granular level, markups can be applied to the labor and materials that go into making a Product that you add to your Product Library. Crows Nest gives you the ability to review cost history or use your most recent purchase price as a cost baseline. However, you may not have the time and resources to constantly keep up with the most current day-to-day market pricing. So, additionally, you have the ability to add a markup to cover the fluctuations in market prices, caused by a whole host of ever-changing factors. This helps mitigate risk of losing money starting at square one with your materials and labor.

Now, you’ve accounted for your material and labor costs in your estimate, you’ll of course want to add markups to cover profit, and the myriad of things that go into making-up your organization’s overhead. Crows Nest provides you with the ultimate in flexibility to customize your estimates to fit the way your organization chooses to build them. Crows Nest conforms to fit the way you do business, not the other way around!

That said, it’s important that you understand how Crows Nest applies markups, how they’re calculated, and where they compound or don’t. Ultimate flexibility comes at a cost. If you don’t take the time to learn and experiment, configuration might seem too complex and overwhelming, causing you to take shortcuts that ultimately fall short of the setup that you want.

What are the markup options?

In this diagram, you can see there are six different places (6) where you can apply markups. Each providing slightly different functionality.

Below we’ll show you where you to go to apply each of these and how each function, so you can determine which markup options you would like to use in your organization’s estimates.

Open

1. Material Markup - Go to Estimates->Takeoff tab and click the 'Edit Library' button (Pencil icon). This will take you into your Product Library. Your screen should look similar to the example below.
   Enter your desired markup percentage in the ‘Markup’ column. This example has only a single material on this product. However, your products may contain many material line items. Each individual material line-item can be marked-up independently of one another.
   
   

   Open

   

    

2. Material Markup by Category - This option allows you to apply a flat percentage [%] rate to materials based on the category that the material is listed. Pros: Quick and easy. Using this option versus the Material Markup above, provides a single blanket markup for entire categories of materials in one place. For example, you could apply a markup to all sheet goods, rather than individual markups for the various Plywood, Partial Board, and MDF materials. Cons: Less granular control than applying the markup for each individual material line-item. Using option-2 in conjunction with option-1 effectively adds a margin to materials that already have been marked-up, thus compounding the markups.
   
   

    

3. Labor Markup - This option allows you to apply a flat percentage rate to labor, down to the Department level. This is the single place where you can apply a blanket markup to the labor in your estimate.
   
   

    

4. Product Line-Item Markup - Allows you to apply a markup to each individual Product line-item that goes into your estimate. For example, you may markup a Base Cabinet (the sum of all of its parts and labor) by one percentage amount and a Die-Wall by a different percentage. This option is additive to all of the options above it. So, if you choose to apply markups in items 1-3 above, understand that the Product Line-Item Market percentage will be added on top of those markups.
   
   

5. Group Markup - Adding a percentage here will apply to the entire group. This option is additive to all of the options above. So, if you choose to apply markups in items 1-4 above, understand that the Group Markup percentage will be added on top of those markups.
   
   

    

6. Final Markup Sequences - There are six levels of sequences (0-5) that can be applied. Each adds margin and is reflected in the total price of your estimate. With the exception of Sequence-0 (zero), the other sequences compound the markup one-on-top-of-the-other. Sequence-0 gets calculated along with Product Line-Item Markup (option-4) and Group Markup (option-5).
   
   The descriptions show here are generic and shown to provide placeholders for your descriptions. Take a few moments to edit them to reflect descriptions that are widely used and accepted within your organization. The description titles should be familiar and intuitive, such as, ‘Profit’, and ‘Overhead’, as example.
   
   

    

How the Calculations are Performed

This diagram demonstrates a very simple example of some, but not all of the options being used. Grab a calculator and follow along, or experiment with this yourself in Crows Nest to fully understand how each of the markup options work.

Other Fields That Affect the Pricing in Your Estimate

There are three additional fields that will affect your estimate’s pricing:

1. Cost Add - You can apply an additional upcharge to your costs. This option gives you a place to very quickly achieve this in the event you find it necessary for one reason or another to add a dollar ($) margin to your cost. A hypothetical example of this might be adding a fuel surcharge that your vendor springs on you. This field should be used very sparingly. It’s designed to be a place to add an ad hoc upcharge to your costs, but it’s an uncategorized cost, and therefore appears on reports as simply a “Cost Add”, making it difficult to know what the reason behind the upcharge is.
   
   

2. Price Add - As the name implies, a price add takes the costs from your Materials & Labor and tacks-on an additional upcharge dollar ($) amount. So, in this example below, you can see that $10.00 is added to the Extended Cost of $25.00 making the price of this product $36.00 total.
   
   

3. Price Override - Applying a Price Override to a product sets the price for that product. Simple as that.
   Pros: Allows you to create a product and apply the price you intend to commit to when you submit your bid, regardless of the net costs of materials and labor. When might you use this option? - Suppose you have a very limited time window of time to produce a bid. You’ve done some manual takeoffs on scratch paper, and you intend to get the bid out immediately but come back later and build your products with materials and labor.
   Cons: As you’re building your estimate, typically, material prices and labor costs are the foundation that you build off of. It’s possible that you set the price without the luxury of contrasting that price against your costs. Crows Nest calculates the pricing: IF the Price Override field is BLANK, THEN use the Takeoff Sub-Total, ELSE use Price Override. If you’ve set a Price Override and then decide not to use it, be sure to clear the field, so it is blank (NULL). If you set the Price Override to $0.00, your price for that particular product may go out in your estimate as $0.00.