The National Association of Home Builders’ Eye on Housing blog takes a look at how much remodelers earn per year. For LBM dealers, the blog post provides an interesting look into the books of an important customer segment.
NAHB, in promoting its 2017 edition of Remodelers’ Cost of Doing Business Study ebook, points out that the net profit margin for the typical residential remodeler increased to 5.3% in 2015, up from 3.0% in 2011.
Combining all sources, remodelers reported an average $1.8 million in revenue for 2015, of which $1.3 million (71.1%) went to pay for cost of sales items such as labor, material, and subs. Subtracting these costs from revenue left a gross profit of roughly half a million dollars – or 28.9% of revenue.
Remodelers also spent an average of $420,000 in operating expenses (e.g. general and administrative expenses, marketing and finance expenses), thus ending fiscal year 2015 with $95,000 in net profit – a 5.3% net profit margin.