The straightforward reply is normally about 10% of the whole roofing contract. The extra difficult reply is, “it relies upon.”
Your subsequent query will most likely be, “Effectively, how a lot is the common roofing contract?” The reply to that query is not so easy as a result of it’s based mostly on averages. These averages will rely upon a number of variables that may change from area to area, neighborhood to neighborhood and home to deal with.
Here is a couple of variables that contribute to the general price of changing a roof:
Regional Labor & Materials Prices
The actual fact of the matter is that it’s cheaper to switch a roof in Dallas, TX than it’s in Minneapolis, MN. Materials is dearer within the North. Labor is paid at a better charge in Minnesota. Insurance coverage firms pay the alternative price worth based mostly on these regional values.
For instance, a primary 1,800 sq. foot house that takes 24 squares with waste in Dallas might have a alternative price worth of $4,500 – $5,000. That very same house in Minneapolis might run as a lot as $7,000 – $7,500 for a brand new roof. When you’re relying on making 10% of the contract, you’ll make as a lot as $250-$300 extra on the Minnesota house based mostly on this instance.
Clearly, there’s price of residing components that should be thought of when evaluating one area to a different. Labor & Materials prices are simply one of many variables that decide how a lot a brand new roof will price.
You might not be prepared to journey to a distinct a part of the nation so as to earn more money. That is comprehensible. That is only a variable to think about whenever you hear about different gross sales individuals making roughly on common. Possibly it has to do with a part of the nation they’re working.
Steep & 2nd Story Expenses
Some neighborhoods will all be single story dwellings which are simply walked on whereas the neighborhood throughout the road will all be 2nd story steep roofs.
The insurance coverage firms pay additional for 2nd story and steep roofs as a result of it takes longer to finish the work and requires extra precautions be taken by the roofers and the roofing firm.
Utilizing our identical 24 sq. roof for example, these extra costs might add as a lot as $1,000 to the contract. At 10% you’ll make $100 extra due to the elevated prices related to steep and 2nd story roofs.
One in every of many errors I made as a rookie roofing salesman was to start out working in a comparatively new neighborhood that primarily consisted of single story walkable roofs. If you are going to select between two neighborhoods, it’s nearly all the time higher to select the neighborhood with 2nd story and steep roofs. If not each, no less than attempt to get one of many two.
2nd Layers and extra
Roofs will typically have greater than (1) one layer to tear off and dump. This normally occurs when the earlier proprietor tried to save cash on their final roofing job. Reasonably than tear off and dump the previous roof, they simply had a brand new roof nailed excessive.
Clearly, tearing off a 2nd layer is extra work on the crew. The insurance coverage firm will usually pay for these 2nd layer tear offs and that can improve the worth of the contract. Generally there might be greater than 2 layers.
In my private expertise, I’ve torn off as many as 6 layers on an previous farm home in West Texas. By the point you get to the third layer, you are simply loosening issues up and sweeping the particles off the roof. It will get actual nasty, actual quick after you get previous that 2nd or third layer.
Backside line is that extra layers = extra money
You usually aren’t going to search out 2nd or third layers of Ventilation in model new neighborhoods. Give it some thought, they’ve most likely by no means had their roofs changed earlier than. They have not had a possibility to placed on a 2nd layer.
You may discover 2nd layers in older, extra established neighborhoods. They are often troublesome to identify, particularly if the final roofing crew in the reduction of and put down new drip edge.
Generally you will not even know you have got a 2nd layer till the crew begins tearing off the previous roof. When that occurs, take footage of the 2nd layer and speak to the insurance coverage firm as quickly as doable. The roofing crew will receives a commission for the 2nd layer no matter whether or not or not the insurance coverage firm pays for it.
It’s good to do your due diligence of taking footage and making contact with the insurance coverage firm to make certain you receives a commission for the additional work. When you do not deal with this instantly, this could possibly be a type of jobs the place you make a lot lower than 10% due to the additional prices related to paying the 2nd layer labor bills.
Fee Buildings
There’s solely two primary fee constructions. Each roofing firm has a barely completely different fee method, however they’re nearly all the time based mostly on these two primary constructions:
1). Flat Price Fee
Personally, I do not like flat charge commissions as a result of it robs the gross sales particular person of the chance to make considerably extra money, however I will clarify it right here so you possibly can perceive.
The roofing firm will usually give their gross sales individuals a worth listing for all of the several types of roofing providers they supply. The gross sales particular person has to promote the job for at least what’s on the value listing. In the event that they do, they earn a flat charge fee. These charges differ from firm to firm, however are usually based mostly on a charge of anyplace from 8% to 10% of the whole contract.
On the nice aspect, it is vitally simple for a rookies gross sales particular person to know precisely how a lot to cost. The costs are set in stone and there isn’t any negotiation.
On the unhealthy aspect, the costs are set in stone and there isn’t any negotiation. When you as a roofing salesperson are held to a sure worth and your prospect is worth purchasing, it’s possible you’ll as nicely preserve strolling down the road. You are going to lose that sale.
Due to the way in which alternative price worth is paid today, there’s just about no benefit to a house owner paying much less for a similar job as their neighbor throughout the road. In the event that they pay much less, the insurance coverage firm will solely cut back the quantity of the house owner’s 2nd examine.
Would not you slightly have the choice to cost much less when it’s worthwhile to with the intention to get a job and be capable to cost a better worth that may offer you a much bigger fee examine each time doable too?
2). Revenue Break up with Overhead Prices
That is the fee construction I realized beneath and it’s the one I like to recommend right this moment. In my view, a revenue break up with a proportion for overhead price offers the roofing salesperson the flexibility to take advantage of cash.
Some individuals will say it’s harder to be taught the enterprise beneath this fee construction, however I’d argue which you could be taught fairly quick when it means you have got the chance to make a number of hundred {dollars} extra every week or hundreds extra in a month. Would not you agree?
Principally, you earn a break up of the income in spite of everything prices have been paid. In some roofing firms that is 30% to 40% of the revenue. Many of the respected roofing firms pay their gross sales individuals no less than 40% to 50% of the income. If you are going to take a job paying 30% of the revenue, you are most likely making lower than you possibly can.
The second a part of this fee construction is the “overhead expense” or typically known as “workplace expense”. Within the firm I realized beneath, the overhead was 10% of the contract. You could find roofing firms the place the overhead is decrease as a result of they do not have as many bills. I personally imagine {that a} 5% overhead expense is extra cheap.
If the corporate you are working for, is not additionally working for you, it’s worthwhile to ask your self why are you paying 10% overhead? Are they doing something that can assist you generate income? Do they supply coaching and on-going help? Do they generate leads that can assist you get into new neighborhoods? When you’re not getting that type of help, it’s possible you’ll wish to search for decrease overhead and better help.
Bonuses
Each roofing firm runs gross sales contests and provides bonuses. These incentives can add to your backside line. When you’re working for any individual that does not have a bonus construction, stroll into the workplace or name your boss on the cellphone and ask for one. They will be glad to set one thing up, a purpose so that you can attain for with the intention to get you some additional bonus cash.
When you’re not getting the occasional bonus, it’s possible you’ll wish to discover one other roofing firm to work for. Roofing gross sales generally is a robust job when the hire is due and your fuel tank is empty. Bonuses and gross sales contests may help provide the additional push to earn more money and enjoyable doing it.