You finished a water heater install on Tuesday. Everything went smooth — except you used the last two dielectric unions from your van and didn't realize it until Wednesday morning when you needed them for the next job. So you burned 45 minutes driving to the supply house, paid retail instead of your account price, and still showed up late to the customer. Sound familiar?
Most trade contractors lose thousands of dollars every year on materials — not because they're buying the wrong stuff, but because they have no system for tracking what they have, what they use, and what they charge. The van is a black hole. Parts disappear. Markup gets forgotten. Waste goes unnoticed. And at the end of the year, the profit margins are thinner than they should be.
Why Contractors Lose Money on Materials
Material costs typically account for 25–40% of a job's total price. Yet most contractors treat inventory as an afterthought. Here's where the money actually leaks:
The 5 Ways You're Bleeding Money on Materials
- No markup or underpricing: Charging customers what you paid — or worse, forgetting to bill for small parts entirely. That $3 fitting adds up across 500 jobs.
- Emergency supply runs: Running out mid-job means retail prices, wasted drive time, and late arrivals. Each unplanned trip costs $50–100 in lost productivity.
- Waste and overbuying: Buying 20 feet of copper when you need 12, then leaving the rest in the van to oxidize. Unused materials rarely make it back to the next job.
- Theft and shrinkage: Tools and parts walk off job sites. Without tracking, you don't even know what's missing until you need it.
- No inventory visibility: You don't know what's in the van until you look — and you only look when something's missing.
💸 A contractor running 10 jobs per week can easily lose $15,000–30,000 per year to material mismanagement.
Build a Van Stock Management System
Your van is a mobile warehouse. Treat it like one. The goal is simple: always have what you need for the most common jobs, never carry so much that things get lost, and know exactly what you've got at all times.
Van Stock Best Practices
1. Create a par level list
Review your last 30 jobs. What parts did you use on 80%+ of them? Those are your "always carry" items. Set a minimum quantity (par level) for each — when stock drops below par, it goes on the reorder list.
2. Organize by job type
Group your van stock by service category: rough-in parts, finish parts, repair parts, consumables. Label shelves or bins. A tech should find any part in under 30 seconds.
3. Weekly van audits
Every Friday (or Monday morning), walk the van with a checklist. Compare what's there against your par levels. Reorder anything below minimum. This takes 15 minutes and saves hours of emergency runs.
4. Track what you pull
When a tech uses parts on a job, log them — even the small stuff. This feeds your reorder system and ensures every part gets billed to the customer.
Get Your Material Markup Right
Here's the uncomfortable truth: if you're charging customers exactly what you paid for materials, you're losing money. You're paying for gas to pick them up, warehouse space in your van, the time to source and order them, and the risk of leftover inventory. Materials need a markup — always.
Material Markup Guidelines
- Minimum markup: 20–35% on all materials. This covers handling, sourcing, storage, and waste.
- Small parts ($0–20): Mark up 40–50%. The handling cost as a percentage is highest on cheap items.
- Mid-range parts ($20–200): Mark up 25–35%. Standard range for most fittings, fixtures, and components.
- Big-ticket items ($200+): Mark up 15–25%. Customers are more price-sensitive on large items — but never go below 15%.
- Specialty/rush orders: Mark up 35–50%. If you had to make a special trip or pay expedited shipping, the customer should cover that cost.
📊 A plumber doing $400K in annual revenue with 30% materials ($120K) who moves from 0% markup to 25% markup adds $30,000 in pure profit — without doing a single extra job.
Reduce Waste and Prevent Theft
Waste and theft are silent killers. Most contractors don't track either because they don't have systems in place to catch them. Here's how to plug the leaks:
Waste and Theft Prevention
- Purchase orders for every job: Before a tech buys anything, they create a PO tied to the job number. No PO = no reimbursement. This creates accountability and a paper trail.
- Photo documentation: Take a photo of materials before and after each job. Visual evidence of what was used — and what should be returned to the van.
- Return-to-stock process: Unused materials go back in their labeled bin, not in a random pile behind the seat. If it can't be reused, document why.
- Monthly reconciliation: Compare what you purchased against what was billed to customers. The gap is your waste + theft number. If it's over 5%, you have a problem to solve.
- Secure high-value items: Expensive tools and specialty parts get locked storage — in the van and on-site. Tool tracking tags cost $5 and save thousands.
Go Digital: Stop Managing Inventory on Paper
Spreadsheets and clipboard checklists work — until you have more than one van, or more than one tech, or more than 50 parts to track. At that point, you need software that lets you manage inventory in real time from anywhere.
What a Digital Inventory System Should Do
- Track stock per van: Know what's in every vehicle without calling the tech.
- Auto-deduct on job completion: When a tech logs materials used, stock levels update automatically.
- Reorder alerts: Get notified when any item drops below its par level.
- Material cost tracking: See exactly how much you're spending on materials per job, per tech, per month.
- Markup automation: Set your markup rules once and let the system calculate customer pricing consistently.
- Integration with invoicing: Materials used on a job flow directly into the invoice — no manual entry, no forgotten parts.
The switch from manual to digital typically saves contractors 3–5 hours per week on inventory management alone — plus the money saved from fewer emergency runs, better markup discipline, and reduced waste.
Your Inventory Management Checklist
Implement This Week
- Audit your van stock — list every part and current quantity
- Set par levels for your top 30 most-used items
- Establish a minimum 25% markup on all materials
- Create a purchase order template tied to job numbers
- Schedule weekly van audits (15 minutes, same day each week)
- Start tracking materials used per job — even the small stuff
- Compare monthly purchases against customer billings to find your waste gap
- Evaluate digital inventory tools that integrate with your job management software
Material management isn't glamorous, but it's one of the fastest ways to add profit to your business without winning a single new customer. The contractors who track every fitting, mark up every part, and audit every van are the ones who actually keep the money they earn. Build the system, stick with it, and watch your margins grow.