You need to have relationships with multiple suppliers. After you have worked a few jobs, you can look back and compare the quotes you have received from different suppliers and see what your potential savings are working with one supplier or another for different materials. When you contact a supplier for a quote, try to get a feel for how bad they want the project and see if they are willing to give any.
You are not trying to cheat anybody or do anything wrong. You are just trying to get the most profit possible out of your project, which is the job of any business owner. If a supplier is going to give some, then he will. If he can’t, then he won’t.
In my experience, I have been able to pick up 5% to 15% savings just from making phone calls and saying, “Hey, can you help me out on this project?” If it is a substantial buy, then a small percentage break in price can make a big difference to the bottom line. Say you need $200,000 in material – a 5% to 10% savings can mean $10 – $20 thousand in additional profit – a pretty good savings upfront before you even start the project.
A lot of times you want to try to build relationships with a certain supplier. That is not uncommon. A lot of companies choose to use one particular supplier most of the time. In having that type of relationship, you would hope for the cheapest price upfront. A lot of times, you can call that supplier and say, “I need a little bit of help.” If you have that relationship built, then they are usually more than willing to give you some money back.
But ultimately you have to do what you have to do to get the best price on materials.
Once you have ordered the materials, you need to also think strategically with regard to things like how much of the materials to get at once and where to put the materials on the jobsite.
A lot of construction managers overlook this, but your suppliers are going to charge you delivery charges. You want to try to get full loads every time to take advantage of that, because you want to get as much material as you can for that one delivery charge. If you need just a handful of material, the supplier is going to charge you the same delivery charge for that as for a full load.
It is important to make sure that you have room on your project site to store your material. A lot of times projects are tight as far as workspace and you can’t handle more than one load at a time. If you’re lucky, you can handle two or three loads. It may be important to strategically order your material in phases, as you need it to optimize your delivery charges.
Proper material placement is up to the foreman on the project. He has to be conservative about where he is going to put his materials and where he can hold the most materials. It needs to be strategically placed so that it is easy to get to, with easy access in and out.
One of the worst things you can do is stockpile your materials and then find out a few days later that it is in the way. You end up having to move it, wasting labor, wasting equipment, and wasting fuel. These people working for you could be doing other things to move the project forward, but now they have to move materials because you didn’t think it through and put it in the wrong spot.
In my opinion, I would say that stone is one of the most wasted materials on a job site. The key to making good use of your stone is to be proactive in conserving materials. Before you order the first load of stone, you need to figure out exactly where you want to put it. Tell your loader, “Hey, we need to get an area cleaned off. We need to have a good smooth surface to stockpile this stone.”
I have seen it happen too many times. Stone shows up and nobody is ready for it. You put it in a wet, muddy spot because it is open. But you also lose 10% or even 15% of your stone in the process – every time you do it. Maybe the spot is full of ruts. You can never get that stone back out of those ruts.
You also want to think about ease of access. When you pick the spot where you want to stockpile stone, you don’t want to put it in the furthest corner away if you can help it. You don’t want your loader man to be wasting time driving across site to pick up stone when you could have had a central location for easy access from all points of the job.
So put stone somewhere where you have easy access but also where you minimize how much of it you waste.
Say you are doing utility work. You know that it is going to take you one load of stone per 100 feet of pipe. I would try to pick a dry day before we start the project, order my stone that day, and then space it out every 100 feet. If that doesn’t work or isn’t possible, try to do two loads every 200 feet. Try to get to where your loader can choose from one side or the other, wherever there is quickest access to keep production up and speed your project along.
Managing your materials can have a big impact on the success of a job.