Pay Less for Materials – Carrier Slocomb, from 35 years in the trades.
--Learn more about my strategies for contractor success at
www.thriveorsurvive.net, under the heading Pro Desk.
Remember when you started out, how hard you worked to get a decent deal? It's time to crank that talent up again. Why? Because after six years of this 'new economy' most everyone's near broke, yet the sad fact remains, stores are still trying to get away with charging you high market prices!
Don't let this happen to you.
What would you say to saving, on average $8,000 and $12,000 a year on material costs? Here's a tip we can share: give those big box stores a pass; visit them only when you have to, like when they're selling quality doors and windows at unbeatable prices. Otherwise, nurture a new supply source.
You're on a mission - a mission to make friends, gain loyalty, and do better than you've been doing the last six years. Your mission is to influence people and win friends at the top of the supply chain, and you can't do that in big box stores headquartered half a country away.
Get out there and cultivate your neighbor, the smaller lumber and supply yards. They've been here forever and, like you, they're weathering the times waiting for the rebound. It's amazing, but it's almost like they've been waiting on you to quit the big boxes and come back in. Suddenly, their prices don't seem as high as you recall. They run a friendly, clean yard and they're convenient. The guys speak your language and the coffee's decent. This is the yard you've chosen to turn things around in.
We recommend you study the yard first. Learn contractor prices for everything you buy, comparing them with other stores in a reasonable, gas-smart radius to your business. Once you know their prices, head over when the place isn't busy. Dress like you're on an estimate and, this is very important, silence your phone, because you don't want any interruptions. You're there to talk to the store manager and, no, you don't have an appointment.
Assuring him you're a customer and not some tool salesman, softly demand a private chat. Once settled, introduce yourself, your company, what you build, how many men you employ, mention your years in the trades, that you're licensed and who some of your better clients are. Then reveal to him that you're on a mission for the very best prices, and that you've picked his store to start in. He'll be interested, if not a little flattered, but don't be surprised if he doesn't show it, because it's poker time.
From what you told him so far he can approximate what you pay yearly for materials. Stay with his eyes. Sweeten the pot some; tell him you're done shopping the big box stores. Oops, there it is! He blinked. That's right; you're going to be friends.
Keep talking. Maybe say, "Look, I don't want what every other yahoo in a truck gets who shops here. I want your special pricing. Not regular contractor prices." Now watch him either lean back, or lean toward you for how receptive he's going to be. Talk on. Explain what you mean.
Tell him you don't expect something for nothing; that you want to set up an account and will shop here exclusively so long as prices work for you. Exclusivity is not your key argument, however. Your key is this: promise him that every month you'll settle your yard bill in full in 25 days or less. And that you won't be paying it off by credit card, but by check.
Cash is king.
While he's thinking how good this sounds, dig in. You already know his contractor prices; undercut them by 10%. Run a few of your amended 'price per linear feet' by him so that he knows that you're dead serious. As he's considering the possibility of cutting you this special deal, deduct the built-in credit card fee that every business has on sales' items - an additional 2%-3%.
You're too smart to pay for that fee; especially when it's a damn tax against those of us who pay cash.
The store manager can do the math: a special deal for you means selling everything in his store at 13% less than he gets from every other yahoo with a truck. That's right; you're not one of them!
When he crosses his arms and stares at the ceiling fan don't despair. Pop the kicker in. Tell him you're a fair and decent man. If for some odd reason you can't pay your yard bill in full at 25 days then this gentleman's agreement fizzles, and you'll revert back to what every other yahoo pays. The burden only seems like it's on you, but it's a discipline that we can show you how to grow into in our contractor tutorial, Cut & Earn™. Hey, your annual yard costs might be $8,000 to $12,000 less! Beat your chest!
Poor Credit? Can't possibly get an account? Here's your solution!
You still go through the same routine; you just need to tailor it differently. Here's reality: jobs build credit and work builds firms - that's our mantra. Your firm's not the only local business having trouble these days - the lumber and supply yard is too. The store manager's had to go, hat in hand, to some of his suppliers. Remind him that we're all in the same boat and offer him a solution. Ask him to create a 'holding account' for your company. This is a collateral account that remains at the yard backing your monthly yard bills. That is, you park money covering the maximum monthly yard bill in an account at the yard. This money remains untouched for a period of six months, or whatever time you agree is sufficient to restore your credit with him. And, excellent businessman that you are, you get interest on it.
Sound like probation? Forget it! This collateral account allows you to cut the best deal possible for one of your biggest expenses. Second, it grows you a brand new credit source for your future. Know what else? It gives the yard exactly what it needs: default protection. But it runs a defined time and it earns interest, which, when it ends, the entire yard will learn that you're a man of his word.
13% under contractor prices and a chance to rebuild your credit? Don't think he'll bend? Just try it.
Like anything else, these strategies are footed in common sense. Common sense is something we’re supposed to learn early on;
however, common sense in business is usually a well fought over talent, one that we gain at huge personal cost. Yes, it took me
thirty-five years to even get most of it right. --Learn more about my strategies for contractor success at
www.thriveorsurvive.net, under the heading Pro Desk.