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Vinyl fence is going up around here like crazy and I want a piece of tghe action. After some negotiating, I finally got my lumberyard to give me prices on their full line of vinyl fence. The problem is their price is about twice what I can get it for elsewhere.
I can’t get any fence suppliers to give me prices for their full line. The want me to call them on a case by case basis for each fence I want to price. I can’t sell fence if I can’t tell the customer what it costs. I can’t get anyone to cooperate.
I understand that it would take some employee an hour to hand write a sheet with prices for all the styles and options available but no one will do this.
I’ve explained that I want to sell fence, their fence, and I can’t do this without knowing the prices. I’m not asking for a 30 day guarantee on prices, just prices that are good today.
I placed a $6K vinyl fence materials order, paid cash cause’ I don’t have an account with any fence places yet. I hoped this would give me enough clout to get the secret numbers, no dice.
I even tried to get list prices from the manufacturer’s, and just ask the distributor what % of list I pay. Again, no dice.
The first guy that understands what I want and helps me will be my fence supplier but nobody wants the job.
I won’t go see a client unless I can give them prices on the spot, no more estimating in my office for me. Any advice on extracting this information?
Replies
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Ryan - Is there anyway you'd be willing to compromise your "on the spot pricing" for a few months until you build credibility with suppliers? I bet they hear "I want wholesale prices so I can sell your product" from lots of folks who are really only looking for a one time deal. If you could just sell a few jobs you would be establishing a track record with them (or their competitors).
*This to me is a perfect example of the snake oil that hurts this industry. Everyone has multiple prices that they parcel out based on some criteria that no one knows but them. Makes you wonder if maybe someone is giving a kickback for the 'privilege" of buying from them.
*Fred, I don't have any problem with multiple pricing structures. Predominantly they are based on volume and there is justification to the distributor in that structure with reduced costs in selling and servicing the products, or retaining long term customers. Ryan, a couple of suggestions. Go ahead and set up an account with one or two suppliers. Most suppliers have both charge and cash accounts. This gives them the opportunity to check you out and lets them know that you have some intention to buy from them. It also puts you "in the system" so you can get pricing.Find out if they work through area sales reps. If that is the case, find out who handles your area and discuss your needs directly with the rep. Reps can be your best buddies when you need help or information.As far as in home pricing, set up a couple of "model" jobs and get them priced up. Then find out some of the "what if's" and price them up. This will give you the unit pricing you need to either close the sale or at least qualify it. You won't necessarily have all parts and pieces information you need to order the job, but you really don't need that to sell it. Ken
*Well from a seller's perspective it costs a given amount for the material that is being resold. That cost varies very little with quantity except for sale transaction overhead and shipping. With today's inventory tracking methods and mechanized sale accounting the quantity sold has very little to do with sale transaction overhead. Yes there can be substantial shipping cost differences based on quantity purchased. In a lumberyard's case the shipping cost varies by the quantity it purchases in total, not by the quantity in any individual sale. So the only reasons to give any kind of substantial discount based on quantity sold is if it is a large special order(like someone buying material for 200 homes), or for marketing PR per my original post.Nope there is a de facto restraint of trade involved here.
*Fred, I don't see what your agenda of beating up on distributors pricing policies has to do with Ryan's question about how to get them to work with him. Since you bring us "a seller's perspective" perhaps you can tell us what your experience in distribution is and can give us some examples of how Ryan can use the distribution system to get the information he needs.Ken
*Ken:Very simple, the problem is that distributors often are are a major obstacle in a person getting a new business off the ground. This case is a good example. All he wants is a complete price list so he can bid jobs and make money for both him and the distributor. Does he get that? No. Instead he gets a secretive treatment that becomes a real obstacle to his business.How can he use the policy? Go somewhere else to do his business. Find someone, somewhere who will do business with him based strictly on mutual support and profit. Then cut his local yard completely out of the picture on everything, even if it is a bit of a hassle. Encourage everyone else to do the same thing. Sooner or later they'll come around or go out of business. In the meantime he has a reliable, known cost supplier he can use to build his own business.Oh by the way, my "agenda" is the same one it is for all my Business posts. To point out that folks here are first and foremost running their own businesses. Anyone or anything that distracts from that is an obstacle that must be bypassed or overcome.
*Hey Ryan,Do what I did when faced with the same situation.You may not like the idea, and most everyone here will say "Oh HELL no don't do that", but it worked for me.Go to Home Depot, or Lowe's and go to their contractor's desk. Give them a list of vinyl fencing material, in every style they carry (Most of them will give YOU a list of all they carry). They will list out ALL prices for you, for every single item that deals with this fencing system. It's kinda like doing a bid for you. They take your material list, and price it out for you. This sounds like a lot of work, but it ain't. I did it in about 45 minutes (including the printed out price list). I now have a list I carry with me, that covers all the styles, all the pieces, and all the prices. I have included my markup % in MY list prices for customers, and I can guestimate pretty accurately on the spot, or spend a few minutes in my office and get VERY accurate. I have also done this with many other types of materials, and I find that they are very cooperative about the whole ordeal. Every three or four months or so, I take my list back in, and they upgrade the prices for me, at no charge. Now that I have done that, I can either buy the material from them when needed, or go somewhere else. Usually, but not always, somewhere else turns out to be cheaper, and I make more money on my material sales (remember, I quoted the price based on my list)But that's just how I handled this same problem...James DuHamel
*I have a question. Does it seem very unprofessional to have a Home Depot or Menards or Lowes truck deliver materials to your job site? My opinion is definitely.Seems to me that clients are looking for a professional to do their work but the professional is getting his/her material at a, basically, home owner oriented store.Try to justify that mark-up when the home owner can just look at the Sunday sales paper, compare the sales price to what you are charging with your mark-up. You'll hear, "I could have bought the material myself."The last big package I ordered was for 18K and I did not even think about Home Depot. Just faxed my order to Heinz Lumber, got a 30 day freeze on the price, contract signed, material delivered, Good Quality Lumber, no client price comparison.By the way, Home Depot charges .39' for base shoe and Heinz charges .21
*James,I did exactly the same thing at HD with skylights about two weeks ago. Got a quote on every skylight and option Andersen Sells. Took me and the counter guy about 20 minutes with the computer and I got 18 pages of prices and options. Unfortuantely this was much easier than getting the same prices from my lumberyard. Fred's right, I'm alittle pissed that I buy almost all my material from them, pay them on time, suggest them to my customers, and still they don't want to work with me on this.The problem with HD for fence is their fence is junk. At least the brand they carry here. I can't and won't sell their fence although it is cheaper.
*OK, Fred, I can buy into that. But it's not the distribution system itself or the multitiered pricing structure that is the problem, just the attitude of some of the individual distributors when it comes to customer service. Like you said, you have to keep poking around until you find someone willing to work with you - even if it is the "new local" home center.Ken.
*i The last big package I ordered was for 18K and I did not even think about Home Depot. Just faxed my order to Heinz Lumber, got a 30 day freeze on the price, contract signed, material delivered, Good Quality Lumber, no client price comparison. That's great Bill, but who is Heinz Lumber? And why WOULD anyone order 18k worth of material from Home Depot, Lowe's, or Menards?I do not build homes, and I do not do MAJOR remodels. If, and when I go to Lowe's or Home Depot, it is for convenience. Sometimes I just need one of something, or a small item. Sometimes I do purchase larger ticket items, or special order something. It doesn't make one iota of difference to me if the customer sees the Lowe's sales paper or not. Especially for lumber. Not a single home center or lumberyard around here gives lumber prices in their sales papers anyway. The market changes too fast for them to do that.There USED to be 4 lumberyards around here that were wonderful. Long before Lowe's and Home Depot came to town, we had a Sutherland's Lumber. They were just like Lowe's and Homer Depot. They also had most of the business. So, the other lumberyards started setting up like them, offering all the goodies for the homeowner that they did. Most of them are now Ace Hardware/Lumber stores. Lowe's and Home Depot just added to the pile. No matter where I buy my materials, or how much I pay for them, there will always be the occasional customer who complains that they could have gotten the material cheaper. It comes with the terrtory, I'm afraid. But not a single time have I ever had to "justify" my material markup. On the contrary, when I sit down with my potential clients, I discuss material in depth. They have a clear understanding BEFORE we begin work that I do indeed mark up my materials. I also discuss why I prefer to obtain the material, and what warranties I offer on these materials. I discuss the fact that if they provide materials, we only gurantee to install them correctly, according to manufacturer's specs. After that, any problem they have is THEIR problem. It will cost them for the labor to remove the defective material, labor to install the new, and more than likely, a delivery charge (even on warranted items). They understand that if I provide the materials, I take care of all removal, installation, pickup, and delivery of material. Just something to think about...James DuHamel
*I am replying as a (somewhat educated) homeowner...I would not be dismayed to see a Home Depot or Lowes truck. I would not be further surprised to see a markup on those materials. I might see some irony, but not enough to be upsetting. It takes time for any contractor to price, plan, order materials and coordinate their delivery. That time needs to be accounted for, and doing a markup on materials is a way of itemizing that time billed to me, instead of just charging some fee out of thin air for the aforementioned services. Further, even if I did go to Home Depot and buy them myself, I don't have a pick-up. I would have to arrange their delivery. I believe delivery is about $35, or I can rent a 'Load N Go' truck for $20 an hour. At half hour for drive time one way, half hour each loading and unloading, I'd be lucky to get away with $40 IF I don't go over. So, I figure $35-60 additional for my purchase. Compare that to 20% markup on a $1000 materials bill, and I make out at saving maybe $150. But, since I'm not as familiar with ordering these materials, it's gonna cost me a few additional hours to figure it all out, and make sure it's all the right stuff. I lose.As a DIY, I don't mind doing that stuff, as I consider it my hobby, what I enjoy doing. When I'm paying one of you to get something done, I want it done, not for me to be putzing around with something that could cost me more. (IE, I get the wrong thing, and you have to go get the right thing, it'll cost me. If you got the wrong thing to begin with, I'd expect you to eat that cost.)Just $.02Sean
*James,Your points are well taken.The 18k of material was for an addition that had three piece crown, all oak, all solid core oak doors, three skylights, 2x12 doug fir rafters, etc. It was for one of the AFFLUENT clientele market that I've been trying to service and have finally broken into that segment of the market. Wasn't easy but that's beside the point.Heinz lumber is a major lumber supplier here in the Chicagoland area.Heinz, Home Depot, Menards, and every other supplier, for the most part, advertise lumber prices every week. Your suppliers don't do that in Texas. O.K. fineThe ONLY reason I'll go to Home Depot is for convenience. Some miscellaneous items I might need. I used to do the exact same thing you do when the client wants to supply the material. I warranty the installation ONLY. By writing that in my contract saved my ass on one particular occasion. That's good business. I've been fortunate enough to be able decline clients that want to supply their own material, too many headaches. This discusion was started by Ryan trying to get prices. Seems my post has made this conversation drift to something completely different. Ryan, for that I'm sorry. I don't have any information to give you and should have stayed on the side line. Judging by the way my post seems to have riled James I should not have even bothered. While I'm here just a note to Sonny and Rick Ritivoy. I'm finally starting to work ON my business instead of in it. Good book Sonny. Rick, when I was swamped and pulling the hair out of my head and posted on the R.O. site your reply about examining the STRUCTURE helped immensely. Thanks to the both of you for enduring all of my inquiries, no matter how stupid they might have seemed, and sharing your knowledge. At least you didn't tell me to go through the archives. I'm home now and it's 11:38 am and the three jobs I have going are doing just fine without me having to be there!!!!
*Bill,i This discusion was started by Ryan trying to get prices. Seems my post has made this conversation drift to something completely different. Ryan, for that I'm sorry. I don't have any information to give you and should have stayed on the side line. Judging by the way my post seems to have riled James I should not have even bothered. It always goes this way. We start subjects, and get WAY off of them before it's over.As far as riling me, it just ain't so. The internet is a hard place to try to figure out tone, attitude, and intent. I was simply joining in the discussion. I was not riled the least bit (Just so ya know)I was actually gaining knowledge about a lumber yard chain I had never heard of. Thanks for the info. Now I know who Heinz Lumber is. As far as "shouldn't have bothered..." ALWAYS bother. It's what makes for good discussions and conversations. If nobody ever bothered, no one would ever discuss things here. Join the discussion, say what you want, and get involved. James DuHamel
*ryan... i've been in the wholesale / retail business on a limited basis.. and the pricing is always crazy...also just when u think u've got it figgered , they change the rules..use the pricing u know ( the one from ur lumber yard..)sell with that price.. and if u get the job .. shop ur price or give it to the lumber yard...see, r u a fence supplier.. or a remodeler ?...i go crazy tryin to figger prices these days.. but it is never the materials that do u in anyways..it's the labor , isn't it ?...i would guess that if u sell a few jobs with current pricing the supplier u want will sit up and take notice and give u the pricing u need...but u will have already proven to urself that you can sell at the higher break-point so it will all be just gravy...(((yes , mamn, this one is our best seller, and we can install that for u for $12 a foot)))she doesn't give a damn if U paid $2.63 or $5.67..if she does... u already know the answer....move on...the guy building stone walls two years ago was getting $10 a foot.... now he's getting $20/ and he's booked to the fall..if you can sell the product ... they 'll get you the pricing ...or someone else will..b but hey , whadda i no ?
*Mike, on the stone walls, is that $20.00/facial sq.ft.? If so, that is still cheap. What kind of stone walls? Dry stacked or mortarred? Either way, there is no chance he was making any money at $10!
*$20 dollars a running foot about 30 inch high..labor only ..no two man stones..drywall... no mortar..great looking walls..
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Vinyl fence is going up around here like crazy and I want a piece of tghe action. After some negotiating, I finally got my lumberyard to give me prices on their full line of vinyl fence. The problem is their price is about twice what I can get it for elsewhere.
I can't get any fence suppliers to give me prices for their full line. The want me to call them on a case by case basis for each fence I want to price. I can't sell fence if I can't tell the customer what it costs. I can't get anyone to cooperate.
I understand that it would take some employee an hour to hand write a sheet with prices for all the styles and options available but no one will do this.
I've explained that I want to sell fence, their fence, and I can't do this without knowing the prices. I'm not asking for a 30 day guarantee on prices, just prices that are good today.
I placed a $6K vinyl fence materials order, paid cash cause' I don't have an account with any fence places yet. I hoped this would give me enough clout to get the secret numbers, no dice.
I even tried to get list prices from the manufacturer's, and just ask the distributor what % of list I pay. Again, no dice.
The first guy that understands what I want and helps me will be my fence supplier but nobody wants the job.
I won't go see a client unless I can give them prices on the spot, no more estimating in my office for me. Any advice on extracting this information?