Labor-Only Pricing: When the Customer Buys the Materials
"I'll buy the parts, you just install them" transfers real risk to you — wrong parts, late deliveries, defective fixtures, and rework you can't bill anyone for. Price it, and write the terms.
It starts reasonably: the customer has found the fixture online cheaper than your supplier, and asks for labor only. The material markup you'd have earned disappears — fine. What disappears with it, quietly, is everything the markup paid for: the correct-part guarantee, the delivery timing control, and the returns run when the box contains the wrong size.
What actually transfers to you
- Wrong or missing parts — discovered on your clock, fixed on your truck run.
- Defective material — the manufacturer's warranty, claimed by the customer, but the removal and reinstall is your unpaid labor.
- Delivery slips — your crew arrives to a job that can't start.
- Compatibility blame — 'you installed it' reads as 'you own it' when the customer has no one else to call.
The pricing answer is a risk load: an explicit percentage of the labor base that prices the rework and delay exposure. A day of work at $38 burdened plus an hour of handling costs $342; a 10% risk load adds $34.20; the quote at a 35% margin is $578.77 — an effective $72.35 per on-site hour.
| Line | Calculation | Amount |
|---|---|---|
| Labor | 8 hrs × $38 | $304.00 |
| Handling | 1 hr × $38 | $38.00 |
| Risk load 10% | $342 × 0.10 | $34.20 |
| Quote at 35% margin | $376.20 ÷ 0.65 | $578.77 |
| Effective on-site rate | $578.77 ÷ 8 | $72.35/hr |
The three sentences that make it survivable
- Warranty covers workmanship only — the material carries the manufacturer's warranty, claimed by the customer.
- Materials must be on site and verified before the scheduled start; delays re-schedule at the next opening.
- Defects, wrong parts or failures of supplied material are remedied at the quoted hourly rate, materials at the customer's cost.
Labor-only with those terms is a defensible product: the customer saves the markup, you're paid for the risk you genuinely carry. Labor-only without them is a turnkey job's risk at a labor-only price — which is exactly why so many experienced contractors simply decline, and why 'we don't install customer-supplied materials' is a policy, not a phobia.
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Frequently asked questions
How much should I charge for labor-only work?
More than bare labor × margin. A day at a $38 burdened rate with an hour of material handling and a 10% risk load prices at $578.77 with a 35% margin — an effective $72.35 per on-site hour. The risk load is what the customer's online purchase transferred to you.
What warranty applies on labor-only jobs?
Workmanship only, in writing: your installation is warranted for a stated period; the material carries the manufacturer's warranty, claimed by the customer; and defects or delays in supplied materials are re-quoted at your rate. Without those three sentences, you've implicitly warranted a product you didn't sell.
Why do many contractors refuse labor-only work?
Because the risk transfer is real and rarely priced: the installer becomes the free diagnostician of someone else's purchasing mistake, the schedule slips on their delivery dates, and blame for failures has no clean answer. With a risk load plus written terms the economics are defensible; without them, it's the least profitable work in the business.
Tools for this
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