Frustrated with product shortages, costs, and delays, growing numbers of remodelers are rethinking their ordering practices to leverage efficiencies, get better service, and save time and money.
From the perspective of lumberyards and other suppliers, the trend reflects cost-cutting that has reduced or liquidated inventories, hours, and staffing. They’re also challenged by manufacturers that prefer to ship full truckloads — and trucks aren’t filling too quickly lately.
Local Jobs, National Legs
In one example, a five-month-old website called BidforMaterials.com lets contractors submit detailed specifications and receive real-time, confidential bids from suppliers. Contractors pay $50 a month, and suppliers bid for free. As of early March, 776 suppliers had used it, about a third of them on New York’s Long Island, where the company is located.
CEO Fred Cann says that he started BidforMaterials.com because his three construction companies “were spending too much time calling around and waiting.” He posted the site’s first request, 18 interior doors for a home damaged by lightning, and got 10 bids. Why was one $500 less, for the same doors? It was from a new supplier eager to break into the market.
Cann believes his concept can work nationally. “The economy has forced [suppliers] to go outside of their traditional territories to be competitive.” In one case, he says, a large request for plumbing supplies filled a half-empty truck that then traveled across the country.
In the Midwest, a group of high-end, design-intensive remodelers is developing an online “buying group.” Their goal is to bypass full-service lumberyards for items such as custom millwork and cabinetry, leverage buying efficiencies, and order directly from small local producers. “We can buy anything custom for 25% to 30% less than the lumberyards charge,” says the remodeler spearheading the effort.
He still appreciates larger suppliers for commodity items such as nails and knife blades, as well as for being distribution centers for big items like drywall and siding. He also understands that full-service lumberyards provide a real service to remodelers who don’t have showrooms or designers.
“But I really don’t want their kitchen planners designing my kitchens,” the remodeler says, nor can he justify paying overhead for design and showrooms, which his company already offers. His biggest challenge, he says, will be developing a robust e-commerce solution that can manage pricing and purchasing.
Some remodelers are buying “factory-direct” the old-fashioned way. Tired of high dealer prices and negligible service, Bullfrog Builders, of College Point, N.Y., has convinced two cabinet manufacturers to sell to it directly, at prices 20% to 25% better than dealer prices.
Manufacturers express reluctance initially, says Bullfrog Builders co-owner Dino Andreakos. But after researching his firm, they become willing to talk and entertain the possibility. “Manufacturers are in survival mode right now,” he adds. “Pricing can be negotiated, lead time is minimal, and customer service is better than it was during the building boom of a few years ago.”
—Leah Thayer, senior editor, REMODELING.