Every construction job has costs for material and labor. The lower a contractor can keep those costs, the more profit each job will generate. Negotiating good materials prices is just as important as having the right tools for the job, and that is why every contractor should focus on ways to get building materials at a discount and put more profit on the bottom line.
When you negotiate materials costs with suppliers, always be sure to ask for free delivery. In some cases, you will not get free delivery if you do not ask. Free delivery not only cuts back on your costs for buying materials, but it also frees up your crew and truck to be more productive on the job site.
Always Buy Wholesale
One of the biggest benefits of establishing a strong relationship with a materials supplier is the ability to buy materials at wholesale prices. The discount from retail to wholesale pricing is considerable, and you can establish wholesale relationships with suppliers simply by providing a copy of your business license or your contractor’s license. You should also consider establishing relationships for wholesale pricing with online suppliers as well, just in case your local suppliers cannot get you the materials you need.
Look For Seasonal Bargains
If your company builds decks, then recommend to your clients that they have their decks built in the fall to take advantage of lower materials pricing. Seasonal pricing is common for a wide variety of materials because suppliers have limited space in their warehouses to store certain materials. Pressure-treated wood is usually more expensive during the summer because that is when it is most popular. If you have a warehouse of your own, then you can save money on your summer building by storing seasonal materials at lower prices and using them in your upcoming projects.
Try To Get Payment Terms
It is always a good idea for any business to establish good credit, and you can do that as a contractor when you apply for credit terms with your materials suppliers. Some suppliers offer what are called NET30 terms, which means that you can buy materials today and then pay in 30 days. In some cases, these same suppliers offer discounts for paying your invoices early, which can help you to save money on the materials that you buy.
Create A Network Of Suppliers
Creating competition is one way to keep prices down for your business, and you can do that by doing business with a network of suppliers instead of just one. In some cases, you might have suppliers constantly trying to give you discounts to win your exclusive business. If you come across that one supplier that constantly offers great pricing, then that is a good way to save money. However, your negotiating power comes from your network of suppliers and you should be very careful not to commit your business to just one materials company.
Paying for supplies is a necessary part of running a contracting business. If you start a course with PDH Contractors, you can learn how to maintain, renew, or upgrade your contracting license in your state. You can also use the library of information on PDH Contractors to learn different ways to get your supplies at discount prices and learn how to negotiate with suppliers as well as customers.