Same Price, Different Story: The Margin Illusion

In the world of custom home building, it’s not uncommon for two Brisbane builders to quote similar overall prices, yet one claims to offer a “lower margin.” So what’s going on? The answer often lies in how costs are classified — specifically, what’s considered overhead versus cost of goods sold (COGS).

Overhead vs COGS: A Quick Breakdown

• COGS includes direct costs tied to building the home — materials, subcontractor labor, site-specific expenses.

• Overheads cover indirect costs — project management, insurance, admin, marketing, supervision, compliance, and warranty obligations.

Some home builders in Brisbane shift certain overheads into COGS to make their margin appear smaller. It’s not necessarily deceptive — but it can be misleading if clients don’t understand the accounting behind it.

Builder Structure Matters

Another layer to this is how building companies are structured. Some builders are still on the tools during the day — actively working on-site while juggling client communication, scheduling, and admin after hours. While this hands-on approach can offer personal attention and craftsmanship, it often comes at the expense of streamlined administration and project oversight.

Other companies operate with more defined roles and systems — dedicated project managers, client coordinators, and admin teams. This structure supports:

• Proactive communication

• Detailed documentation

• Faster issue resolution

• A smoother overall client experience

These differences impact not only how margins are allocated, but also how efficiently your custom home project is managed.

Architectural Complexity Drives Office Supervision

When it comes to architecturally designed homes, especially those with bespoke detailing and high-end finishes, the need for supervision goes far beyond the job site. A significant portion of coordination, documentation, and problem-solving happens behind the scenes — within the office.

From interpreting complex drawings to managing consultant input, ordering custom materials, and resolving design queries, this level of service demands:

• Highly skilled office-based staff

• Robust project management systems

• Time-intensive coordination

This is another reason why premium builders in Brisbane may carry slightly higher costs — not because of inflated margins, but because of the depth of support required to deliver architectural excellence.

Why It Matters

A builder advertising a “10% margin” may still be charging the same total price as one with a “20% margin” — they’ve just reclassified costs or operate with a leaner structure. The difference isn’t in what the client pays, but in how the builder presents their pricing and manages the build.

This is why transparent construction pricing and client education matter more than the margin number itself. At Allen Brothers Construction, we focus on helping clients understand what’s included in their investment — and how it supports the quality and service they expect from a luxury home builder in Brisbane.

Margin vs Markup: What’s the Difference?

While often used interchangeably, margin and markup are two distinct financial terms in residential construction. Markup refers to the percentage added to the cost of goods sold (COGS) to determine the selling price — it’s how a builder increases raw costs to cover overheads and profit. Margin, on the other hand, is the percentage of the final price that represents profit after costs are deducted. For example, a 20% markup on $100,000 in build costs results in a $120,000 price, but the margin is only 16.6%. Understanding this difference helps clients see why transparent construction pricing matters — especially when comparing custom home builders in Brisbane who may present figures differently but deliver similar outcomes.

Our Commitment to Clarity

We don’t play margin games. Our pricing reflects:

• True build costs

• Operational requirements to deliver premium outcomes

• A margin that supports quality, compliance, and long-term service

Because when you’re building a custom luxury home, the last thing you want is ambiguity.

Your Project at Your Fingertips

We use Buildertrend to centralize all project communication, selections, approvals, and documentation. It’s your digital command centre—giving you real-time access to everything happening on site, all in one place.

More Than a Build—It’s a Partnership

We don’t just build homes—we build trust. Our communication process is designed to make your journey smooth, transparent, and enjoyable. Because luxury isn’t just in the finishes—it’s in the experience.

Explore more about our process or connect with our team to start your build journey.