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- Uncover This Hidden Margin Boost
Hello home service operators,
Contractors often leave margin on the table by paying for things they don’t track, sticking with habits they’ve never questioned, and carrying costs they don’t even realize are there.
These small leaks compound. A few dollars lost here, a few wasted minutes there. Before long, they show up as a big gap in your bottom line.
The good news? You can tighten that up. And I’m gonna tell you how.
Before that, here are some resources worthy of a few minutes of your time…
Contractor Commerce makes it easy to generate instant leads via your website
Pantheon 2025 was a blast. Had a great time recording podcast episodes with some industry titans
Carrier is partnering with TechForce Foundation to boost HVAC career paths, building on its TechVantage Initiative to hire 1,000 U.S. techs and train 100,000 more
A man who confessed to smuggling five cylinders of illegal R22 refrigerant into the USA has been sentenced to three-years’ probation
Service Experts has launched a franchising model to help grow locally owned HVAC businesses nationwide
7 leads, 7 booked jobs, and $22k+ in sales—without any outreach (here’s the secret)
Fact. You’re Wasting Time on Lead Generation.
It’s a harsh truth I learned myself. Most HVAC companies waste hours chasing half-baked “strategies” that don’t move the needle.
My turning point came when I realized I needed outside help in the form of a lead generation agency.
Month after month, Service Scalers generates hundreds of leads for my company. And with that, hundreds of thousands in sales. Here’s how they work their magic:
PPC & Local Service Ads: Get high-quality leads every week, not random clicks.
SEO that scales: Grow your presence and attract the right customers.
Lead audits: Save money by cutting out wasted spend on junk leads.
Don’t continue to waste time and money on strategies that don’t generate results. That’s a losing proposition.
Work with a proven team of SMB marketing experts who know the trades and build scalable systems that actually work. And tell them John sent you. That’s good for one month free when you sign a 12 month contract.
You’re Losing Money and Don’t Even Know It
Most contractors don’t realize how much margin they lose on parts. It’s not because the work is wrong, it’s because the SKU list is too long, too messy, and never reviewed.
Over time, I’ve learned to treat supply chain decisions the same way I treat acquisitions: figure out what matters, cut what doesn’t, and focus on the levers that move the bottom line.
Audit Your Top 500 SKUs
We were buying more than 100,000 SKUs a year. Even for a large shop, that’s impossible to track. So we pulled the top 500 items and went line by line.
The result? Clarity on where the money was going. Instead of guessing, we had a roadmap for where alternatives could make the biggest impact.
Re-Spec Commodity Items
On commodity parts like registers, grills, whips, disconnects, and PEX fittings, brand loyalty doesn’t add value. When we swapped some of these out, the savings were eye-opening, often 50 to 60 percent.
The quality was there, the warranty coverage was equal or better, and the end customer didn’t care. That kind of margin lift changes the math fast.
Standardize Install Kits
We started building install kits for common jobs, and a surprising number of those SKUs were easy to replace with more cost-effective options.
Instead of buying piecemeal and paying extra, we created consistent kits stocked with the right mix of parts. Techs grab once, installs go faster, and we’re not paying double for branded odds and ends that don’t matter.
Match Inventory to Geography
Inventory strategy looks different depending on where you are.
Here in Cleveland, I’m spoiled because supply houses are everywhere. But in rural markets, some contractors are an hour from the nearest supply. That forces them to carry four or five times as much inventory, tying up cash in the process.
In big cities, it’s a different kind of pain. Traffic can turn a 10-mile drive into a two-hour haul. Either way, you have to adjust your inventory approach so lack of parts never slows your business down.
Break Free from Brand Loyalty
Too many contractors say, “This is how we’ve always done it.”
That mindset bleeds margin.
Some manufacturers even tie warranties to their own fittings or pipe, which locks you in. But there are plenty of cases where warranties hold no matter what combination you use. If the performance and coverage are the same, you don’t need to pay a premium for the name on the box.
Treat Suppliers Like Partners
Suppliers respond to feedback more than people realize.
Prices look off? Call it out.
Need a bulk quote? Ask.
Missing a variant you use often? Push them to add it.
We’ve seen suppliers willing to quote aggressively and even add SKUs based on contractor requests. That only happens if you treat them like partners instead of order takers.
The Lesson
Great operators don’t just run jobs well, they buy well. Tighten up your SKUs, re-spec where you can, and be intentional about how you source and stock. Every improvement in purchasing flows straight to margin, and that margin is what funds growth.
Need Call Center Help?
Boost bookings. Empower your reps. Delight your customers.
Avoca’s custom-built AI CSR works across every channel to turn more calls, chats, and messages into scheduled jobs.
Ever since we started using Avoca in our call center, call quality is up from 40% to 95%, booking percentage sits at 85%, and we’re averaging 400 calls weekly.
Not monthly, WEEKLY. Sound like something you need?
What do you think? Is there potential for this hidden margin boost to impact your business?
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👊 John
Disclosure: Some of the content and links in this newsletter are sponsored or affiliate links, which means we may receive payment or earn a commission if you click through or purchase. However, all opinions expressed are entirely my own.
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