Construction Glossary
Prime Cost
Definition
Prime cost is the basic supply cost of materials or goods, before adding labour, overheads and profit. It is the net figure you pay a supplier for the item itself. The term underpins prime cost sums, where an allowance covers the supply of an item the client will choose later. Knowing the prime cost lets you see clearly what is supply and what is mark-up.
Prime cost refers to the raw supply price of a product, such as the cost of the tiles themselves rather than the cost of buying and fixing them. The labour to install, plus overheads and profit, sit on top of it.
It is the basis for prime cost sums in estimates and contracts, where a supply allowance is carried for items the client has not yet selected.
Why it matters
Separating prime cost from labour and mark-up keeps your pricing honest and easy to adjust. When a client upgrades a fitting, you change the prime cost and the rest of the figure stays clear, which avoids arguments about what the change should really cost.
We make prime costs clear in your estimate so the supply element of each item is visible and easy to adjust when choices change.
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