Why Most Landscapers Are Using the Wrong Pricing Method
For landscape construction businesses (design-build, hardscaping, outdoor living projects, plantings, irrigation, retaining walls, etc.), the best pricing system in most modern scenarios is PMM (Production Minus Materials), especially when using tools like Profit Genie / Elevation Advisor.
Here's a clear comparison and reasoning tailored to landscape construction companies.
Quick Recap of the Main Systems
- MORS (Multiple Overhead Recovery System), Traditional markup method (different % on materials ~10%, equipment ~25%, subs ~5%, labor 35-95%+). Overhead spread across all direct costs.
- PMM (Production Minus Materials), Modern labor/production-focused rate. Calculates one fixed production rate (hourly or per-crew) that covers all labor + overhead + desired profit. Materials added separately, usually at cost .
Which is Best for Landscape Construction and Why
Factor | PMM (Elevation Advisor style) | MORS (Traditional markup) | Winner for Landscape Construction |
|---|---|---|---|
Job mix variability | Excellent - same production rate applies whether job is 90% labor or 70% materials | Poor - low-material jobs under-recover overhead; high-material jobs over-recover | PMM |
Material cost volatility | Protected - material swings don't affect core rate | Exposed - thin or negative margins on material-heavy jobs when costs rise | PMM |
Client-supplied materials | Handles perfectly (add at cost; production rate still covers everything else) | Frequently loses money or requires awkward adjustments | PMM |
Profit predictability | Engineered - reverse-calculated from your real numbers to hit exact annual profit goal | Variable - profit % changes wildly depending on job type and markup accuracy | PMM |
Quoting speed & consistency | Fast once rate is set; consistent pricing across estimators/crew | Requires recalculating markups per job category; inconsistent results | PMM |
Scaling / adding crews | Easy - model how efficiency or more billable hours changes required rate | Difficult - markups quickly become outdated as volume grows | PMM |
Industry criticism of the method | Very little in recent years among profit-focused contractors | Widely criticized (even by former teachers) for faulty math and poor job-mix handling | PMM |
Best suited for | Landscape construction, design-build, hardscape-heavy, mixed-service companies | Older maintenance-heavy or very stable, predictable job mix companies | PMM |
Why PMM is Generally Superior for Landscape Construction
Landscape construction jobs have high variability:
- Some projects are material-intensive (pavers, boulders, lighting, irrigation, plants)
- Others are very labor/production-heavy (grading, drainage, wall building, site prep)
- Material prices fluctuate significantly (lumber, stone, concrete, plants)
- Clients often supply or select high-end materials themselves
- Profit margins are typically targeted at 12–25% net (higher than maintenance)
MORS struggles in this environment because:
- It relies on fixed percentage markups that don't adjust well to wildly different material-to-labor ratios.
- Low-material or high-labor jobs often fail to recover enough overhead → invisible profit leaks.
- High-material jobs can appear very profitable but actually subsidize other work.
PMM solves this by:
- Treating production hours/crew days as the consistent driver of profitability.
- Fully loading the production rate with all overhead and profit → you know you're covered no matter the job mix.
- Adding materials as a pass-through (or small markup) → no risk from price swings or client allowances.
- Being dynamic, update your exact rate quarterly or annually as your real expenses, hours, and profit goals change.
Many landscape construction companies that switch to PMM (often through Elevation Advisor or similar coaching) report:
- 10-30%+ profit improvement
- More confidence quoting large/complex jobs
- Fewer "surprise thin-margin" projects
- Easier to scale crews without repricing everything
When MORS Might Still Make Sense
- Very small, simple landscape install companies with extremely consistent job types (e.g., almost always the same plant-material ratio)
- Companies that refuse to change legacy processes and are already profitable enough
- Pure maintenance + very light install businesses (less relevant here)
Bottom Line Recommendation
PMM is the stronger, more future-proof system for almost all landscape construction businesses today.
It aligns with how modern construction companies think: protect labor/production margins first, treat materials as variable inputs, and engineer pricing from real business financials instead of industry-average markups.
If you're running a design-build, hardscape, or full landscape construction operation and want predictable profits instead of feast-or-famine years, **PMM **with Elevation Advisor is currently considered one of the best approaches available.
Updated on: 03/07/2026
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