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6 Ways Contractors Can Save Money on Buying Building Materials

Posted by Jeson Pitt on Mon, Aug 26, 2019 @ 10:45 AM

Residential Const SiteEvery construction project requires you to spend money on labor and materials. One way to generate higher business profits is by lowering the cost of building materials. It is possible to save money while buying building materials — you just need to know the right tactics to reduce overhead expenses.

Let’s look at six ways to do that.

Article Summary

  1. Buying Building Materials in Bulk or at Wholesale
  2. Buy Easy-to-Install Building Materials
  3. Choose Prefabricated or Modular Materials
  4. Have a Network of Suppliers
  5. Negotiate Free Delivery
  6. Establish Good Payment Terms

Buying Building Materials in Bulk or at Wholesale

concrete blocksWhen you buy materials in wholesale or at bulk, you can acquire large quantities of products from manufacturers at a much lower price. This price will be lower as compared to buying from single retailers.

Generally, single retailers require you to buy a minimum quantity of goods to get a discount. That is not the case with wholesalers. Since building structures requires hundreds of construction materials, it would be sensible to buy some of those materials in bulk to save money rather than purchasing at retail.

Most builders divide the materials into separate sections of constructions, such as interiors rooms, frames or exterior structure. Estimate the retail cost for each section and determine which ones will be available in wholesale and which ones won’t.

Buy Easy-to-Install Building Materials

When you use products that are easy to install, you will save money, time and labor. Use products that are designed to be simple because that minimizes the risk of failure. If employees know exactly how to install the product, it won’t fail after installation.

Laminate Flooring InstallationFor example, if underlayment or moisture barriers are installed incorrectly, then the flooring may fail and crews will need go back and make the necessary adjustments.

Various kinds of construction electrical products such as electrical outlets, light switches, electrical boxes, electrical conduits, motor controls, etc., are available that are easy to install. Look for products that will fit your needs perfectly. You can even ask the retailers to suggest prod­ucts that are easier and faster to install. Make sure the archi­tect is on the same page as you when it comes to using simple-to-install products in the building.

Also be aware of the developments in an ever-changing marketplace. Given enough time, you will often find a better, easier or more efficient solution to buying building materials. Keep track of the different innovations in the construction industry and research products that can be easily installed.

Choose Prefabricated or Modular Materials

Prefabrication of building refers to the assembly of different parts of the building at the manufacturing unit. prefab wall-1After that, the subassemblies are transported to the actual construction site where they are all assembled.

Even though the pieces of each building are custom-made, modular construction is inexpensive. This is because prefabricated construction takes a lot less time than traditional construction. You can save money on construction financing, labor, overall raw materials and construction effort too.

Modular materials also provide easy and extensive redesigning opportunities.

Have a Network of Suppliers

When you do business with just one supplier, you have to pay the price they quote. Maybe you will get some discount; maybe you won’t. However, if you have a network of suppliers, you can buy materials from those offering the cheapest prices. They will try to give great discounts to win your business.

If you do come across a supplier who offers you good prices constantly, you can choose to stick with them. But, it would be better if you do not commit your business to just one materials company.

Your negotiation skills will matter when you buy construction materials. You must negotiate well with the suppliers to get the best prices. Employ the right tactics and you can successfully cut down costs on buying building materials.

Negotiate Free Delivery

After negotiating the material costs with the suppliers, ask them to deliver the materials for free. It won’t just reduce your costs, but also free up your crew and truck to be more productive on the job site.

In most cases, they will comply with the request, but you do have to ask. If you don’t, you will end up paying for something that you could have gotten for free.

Establish Good Payment Terms

dude writing checkIt is a good idea to establish good credit with suppliers when buying building materials. As a contractor, you can apply credit terms with your materials suppliers. For instance, some suppliers offer forms of trade credit which specify that the net amount is expected to be paid by the buyer within 10, 15, 30 or 60 days of the date after the materials are dispatched to the contractors. This means you can buy the materials and then pay for it in 10 – 60 days depending on which type of trade credit your supplier has opted. If you can pay earlier than expected days, the same suppliers may even offer discounts. This will help you save money while buying building materials.

Other Payment Arrangements

Contractors can optimize the payment process by dealing with sellers who use CrossCheck check guarantee services.

When buying building materials from a new supplier, for example, contractors can leverage CrossCheck’s Check on Delivery (COD) service into delivered items without credit terms or delay. COD may be added to Standard Check Guarantee or Electronic Check Processing.

Drywall in new homeCheck on Delivery is ideal for delivered building supplies because check payments are pre-approved over the phone before the delivery trucks leave the yard. Here’s how COD works using Electronic Check Processing.

The supply dealer’s office receives an authorization number from CrossCheck after entering the estimated sale amount and the contractor’s phone number on CrossCheck’s online portal. Drivers deliver the order and pick up a check payment. Back at the office, the check data is captured with desktop imagers and is sent to CrossCheck via its online portal where merchants enter the final amount and check number. The payment is now guaranteed by CrossCheck.

Download our free guide to learn how Check on Delivery can create a win-win situation for building supply dealers as well as contractors.

check on delivery, cod

Jeson PittsGuest writer Jeson Pitt works with the marketing department of D & F Liquidators in Hayward, Calif. and regularly writes to share his knowledge while enlightening people about electrical products and solving their electrical dilemmas. He's got the industry insights that you can count on along with years of experience in the field. Jeson lives in Hayward, Calif. and loves to explore different cuisines that the food trucks in the Bay Area have to offer.

Tags: Building Materials