Where is the main profit source of home improvement company?

Escort decoration network through the collection of some information, to introduce to you how the decoration company makes money, profit model and profit point.

Calculated according to the most common semi-package mode:

Generally speaking: hidden profit of half package = half package price x(35-40)%

Hidden profit (or gross profit) earned by other decoration companies: hidden gross profit = design fee+management fee+hidden profit in half-package fee+profit generated by increased cost: design fee is implemented according to the charging standard determined by the company; Management fee: 5%.

Contrary to what many people think, the profit (material rebate) on building materials is not the main income for many decoration companies, because few material suppliers are willing to give high discounts today when the price of materials is becoming more and more transparent. In other words, this model is not competitive for decoration companies.

The profit point of the decoration company should be: the ability to control the risks that may be brought by resources, personnel, materials and other factors in the construction process, such as material waste and time delay caused by delayed work and rework. The stronger the control ability, the higher the gross profit can be generated.

For example, the plate consumption of a cupboard: conventional 6.8+ loss 0.3=7. 1 (sheets). The number of plates to be purchased is eight, so we can control the consumption to seven. The price difference in the middle is: 1 piece. And this one is the profit point of the decoration company. In fact, this way, in a sense, mainly comes from building materials, but it is different from the previous way of taking kickbacks by eating.

To sum up, the source of profit mainly comes from comprehensive control in all aspects, that is, cost saving. The more formal the home improvement company is, the less the main profit is, and all the profits are scattered in all links.