I like Bill's honesty and I will be very honest too. There is much written on this so I'm not divulging any trade secrets here.

Many contractors (and suppliers) don't want the end user to know the true costs of supplies. That's not to say they are devious but when these costs are known, it can cause the end customer tremendous anxiety. There are various reasons and philosophies for this, so we'll leave it alone. We all know what MSRP is and unless it's a fair trade item, you should never pay MSRP.

It does depend on what the products are and the line of work as to what a contractor may see in discounts. For example, a suppliers catalog that lists refrigeration or electrical parts and supplies, the contractor can expect to pay 50% of that. Higher volume users can expect to pay even less. To get an even bigger discount, the contractor would enter into a contractual agreement with the supplier with an estimate of the minimum qty to be purchased during the year. The supplier comes back with various costs for various qty's and then at the end of the year, everything gets settled up if less than minimum is realized.

Building supply companies are a bit less, usually around 10-15% if you make large and frequent purchases.

As Bill has mentioned, I can go to my supplier for an item and get a price that is more (wholesale!!!!) than what it would cost at a Big Box Store.

Here's a rule of the thumb that consumers won't like but, someone wondering what base line to use for charges when in or, starting a business. Whatever an item costs the business, mark it up 300%. So if you have a contractor who keeps reducing his labor rates, run away. If you get a contractor who makes recalculations on the cost of materials, he's working within that 300%. Some will be honest and only say "here's what I can do". Others might say "I found a different place to get the same thing cheaper". Many have found that perhaps a contractor may refuse to buy from anywhere other than his supplier or won't warranty anything from another source. This is a good deterrent ploy to help them keep their purchasing power with their supplier. Knowing that, can make it advantageous to the end consumer.

Companies need to pay their bills, meet payroll and make a profit. So don't expect to pay "cost".

A homeowner can get a contractors license in most localities, for their own work. That means pull your own permits, schedule inspections, contract with any subcontractors, make deals with suppliers and get the job done on time within budget. Or, just pay a good contractor to do all these things and get your best price after consulting several contractors.

I'm hoping this info might help to settle your mind a bit on "sticker shock" and, to make you aware of what's involved and what to expect when choosing a good contractor. Never be afraid to ask for some value added incentives. For example, an upgrade of a particular item. The difference in contractor costs isn't that much and unless they are a very busy company, will do that "if they get the job". A good contractor might charge a refundable fee (if they do the work) for estimates. That allows them to give a good rock bottom competitive price from the very beginning.