What percentage of sales dollars does the average contractor spend on materials?

The average contractor allocates around 40% of their sales dollars to materials. This figure reflects the significant portion of project costs that go towards acquiring the necessary materials for construction. In many contracting scenarios, materials often constitute one of the largest expenses, as they include everything from raw supplies to specialized equipment needed for various projects.

Understanding this percentage is crucial for contractors when budgeting and forecasting expenses for projects. By accurately estimating material costs, contractors can ensure they are setting competitive yet sustainable pricing for their services while also maintaining profitability. Additionally, knowing the standard allocation helps in making informed decisions during project planning and resource management.