Untouchable Markup,
Guaranteed Profit?

The vendor, who messed up a job a bit and run significant cost overrun, said this when it was suggested that some of his overhead expenditure should be covered by a 10% markup fee charged to the project:

The 10% markup is part of our profit and has nothing to do with anything else.

Looks like the basic Profit and Loss (P&L) concept has been lost in the twists and turns of this business’ operations. The reply to this nonsense was:

The profit is not a right nor guaranteed under the rules of free market. Profit is a difference between revenue and expenses, and directly related to efficient operations and quality product/service/outcome. The problems with quality and workmanship take from the margin and bite at the profit.

Hey, don’t forget, P is for profit and L is for loser loss!

Leave a Reply