When Tom Sterich, president of Kirk Development, noticed the economic downturn in his Phoenix market a year ago, he invited his trade contractors to a meeting to discuss the economy and the fact that homeowners were getting more bids on projects. “We needed their support with better pricing, and they were all onboard with it,” he says.
Such meetings are not unusual. Six months ago, Scott Balentine and four of his subs had one. “Some builders and larger firms have laid off staff, so we are pricing against people who are bidding a ridiculous amount, and that’s hard to combat,” says the president of Lifestyles Custom Homes & Remodeling, in Overland Park, Kan.
Why be shy? If bids at Shigley Construction, in Wichita, Kan., are higher, these days owner Tim Shigley is more willing to ask trades for pricing concessions. “I need to sell that job based on value and defining that value to the homeowner,” he points out.
And in lean times, a willingness to cooperate on pricing is not the only thing that remodelers need from the trades they work with. Some subcontractors are struggling, and North Carolina remodeler David Tyson, owner of David Tyson and Associates, finds that just getting trade contractors scheduled can be difficult. “I have spent 27 years finding good subs, and I am loyal to people who have done good work for me in the past,” Tyson says. “It’s hard to start over with someone.”
His existing subs have cut back on staff, so scheduling is more difficult, but, he says, they have been able to respond to any emergency calls.
A lean economy has also redefined relations with suppliers. Shigley, for instance, points out that today it’s difficult to get a client to pay extra for what would have been an easy upsell before the recession.
So he has asked some of his suppliers to reevaluate their quotes. On a recent job, the cabinetry cost $10,600 for a small kitchen. The higher-quality cabinets cost $2,200 more. Shigley asked his supplier to sell him the higher-tier cabinets for $10,600. “I told them, this job is going to turn on the cabinets. We need to call that manufacturer and tell them.”
A willingness to engage in mutual support is more about survival than anything. Robin Burrill, co-owner of Curb Appeal Renovations, in Keller, Texas, says that she has purchased plumbing products from Ferguson for a long time, but this year was the first time that the Fort Worth showroom referred a client to her.
The manager of the ProSource flooring showroom in Fort Worth sent Burrill a referral for a $60,000 kitchen remodel, which she recently completed. ProSource also had its custom grout company send a rep out to the job when she had a stain problem with grout — a first.