By Daniel C. Brown
Like most business people shopping for the materials they need, remodelers look carefully at price. But there is a lot more to cost-effective purchasing than buying two-by-fours by the rail car load at a deep discount.
To Christine Perkins, owner of The Construction Team Inc., service is more important than price when she buys materials for her company, a $2-million remodeler based in the Cleveland suburb of Chesterland. "I don't care if you have the best price in town," says Chris. "The few pennies I save in pricing are not worth the hundreds of dollars worth of anguish if you don't provide service."
One example of a recent near miss: Chris took delivery on a fiberglass tub that turned out to be damaged. "We called our supplier and they sent somebody out right away to repair the tub," she says. "They prevented a virtual disaster. I would have had to shut the project down for six weeks while we ordered a new one. Customers don't want to hear that."
In recent years, prices have been very volatile for commodities such as lumber and steel. As a result, Chris writes into her contracts with clients that the quoted price will hold for five days – not for the 30-day time span she used five years ago. But she's flexible.
"If the customer says yes to a deal in 10 days, the price may still hold," she says. "Five years ago, we'd get price increases once a year. But last year, plywood doubled in price when we went to war in Iraq."
Buying value
In Tucson, Ariz., high-end remodeler John McCaleb is even less price-conscious than Chris Perkins. The owner of McCaleb Construction Inc., a $3-million design-build remodeling contractor, John is more concerned about buying value for his clients than in obtaining the lowest price, even as he works to stay within the clients' budget.
"If a customer tells us they want to spend $300,000 instead of $500,000, we may need to trim square footage or change the design details," says John. "We may have to go to doors that cost $400 instead of ones that cost $1,000."
John designs all of the projects he builds, and he always puts value first.
"We'll be gun-shy if somebody we don't know submits a very low price," he says. "But if it's an identical door or window, we will shop for the best price."
Since John's company works on a fixed-fee basis, he tries to get the best prices possible for his clients and for his company. The better he can do with pricing, the more the client gets for their money, and the more profit he can make. With the back-up of service-minded suppliers, it's a win-win-win for everyone.
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