Buying materials is often the biggest expense for tradespeople and contractors. Making sure that your material costs are managed effectively can improve profitability and make your business more competitive in a price-sensitive market.
We've teamed up with BuyMaterials to identify six ways to make sure you’re getting the best materials for less.
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- Get quotes from multiple merchants
- Buy in bulk
- Negotiate
- Account for changes in seasonality
- Leverage trade credit schemes
- Organise your estimates
1. Get quotes from multiple merchants
Many tradespeople will use a small number of suppliers and remain loyal to them. There are some advantages to this, but getting the best price is rarely one of them.
Prices are highly variable from one merchant to the next and most will have varied prices on different products. By shopping around, you can usually find lower prices overall by buying each product from the cheapest supplier — but this can take time.
When purchasing bulk orders, it pays to get prices from multiple suppliers. Detail exactly what you want and send the order to as many suppliers as you can. Typically, you’ll find a cheaper quote than you would have otherwise, plus the comfort of knowing that you’ve got the best deal.
Of course, obtaining and managing quotes from multiple suppliers is time-consuming and requires a lot of organisation. Quotes come at different times, in different ways and there can be a lot of communications to juggle. Using price list software can help to keep things more organised. Once you create a list of local suppliers, you can refer to it each time you’re looking for a deal.
2. Buy in bulk
Purchasing materials in bulk is a straightforward way to reduce costs. Many suppliers offer volume discounts, meaning the more you buy, the less you pay per unit. This can lead to substantial savings, especially for commonly used materials.
However, buying in bulk requires careful planning and adequate storage solutions.
Price multiple jobs at once to increase order volumes and consider the long-term usage of materials. If you consistently use certain items, buying larger quantities upfront can save money over time. Ensure you have a safe storage space and manage your inventory to prevent wastage or damage.
3. Negotiate
Negotiation is a useful skill for tradespeople looking to reduce costs. It’s possible to achieve better outcomes with a few simple tactics:
- Have a solid understanding of the market prices for the materials you need. It might sound obvious but the more you know, the more effective your negotiation will be.
- Ask for “First Price Best Price” to avoid haggling and get the best offer out front.
- Establish strong relationships with your suppliers. Having a good rapport with the customer service people can make negotiations smoother.
4. Account for changes in seasonality
Material costs can fluctuate based on the season. Being aware of these trends allows you to time your purchases strategically to take advantage of lower prices.
Purchasing items like insulation or roofing materials during slower construction periods can result in significant savings. Additionally, suppliers may offer discounts to clear out inventory before new stock arrives.
Where possible, plan your projects around these seasonal price variations. Stock up on materials when prices are low, and you’ll reduce your overall costs. Keep an eye on market trends and stay in touch with your suppliers to get early notice of upcoming sales or price changes.
5. Leverage trade credit schemes
Trade credit schemes can be a valuable tool for managing cash flow and reducing material costs. These schemes allow you to purchase materials on credit and pay for them later, typically 30, 60, or 90 days.
By taking advantage of trade credit, you can complete projects and receive payment from clients before having to pay your suppliers. This can significantly ease cash flow constraints and allow you to take on more projects.
Additionally, some suppliers offer discounts for early payment. If you’re able to pay your invoices before the due date, you can take advantage of these discounts, further reducing your material costs.
6. Organise your estimates
Accurate estimates are crucial for managing material costs. Overestimating leads to excess materials and wasted money while underestimating can cause project delays and increased expenses. By honing your estimation skills, you can ensure that you purchase the right amount of materials, reducing waste and keeping costs under control.
To improve the accuracy of your estimates:
- Use software tools: Estimation software (e.g. Tradify Estimating Software) and calculators can help you create detailed and precise material lists based on project specifications.
- Hire a professional estimator: Whilst this is probably not necessary or feasible for smaller jobs, for larger jobs, using a specialist could save a lot of waste.
- Review past projects: Analyse completed projects to understand where you might have over- or under-estimated. Use this Profit Margin Calculator to refine your future estimates.
7. Use BuyMaterials!
In response to the challenges builders and tradespeople face, BuyMaterials allows you to easily get quotes from multiple merchants at once.
You quickly fill in the items you need for a project, click to send, and then get back quotes from various BuyMaterials quality local merchants.
By ordering this way you get the following benefits:
- Multiple quotes from a single request allow you to test the market.
- First Price Best Price – Merchants will provide their best, trade prices as they are competing for your business.
- Mix and match – our platform will pick the best value items across a handful of suppliers and make it one simple purchase – delivered when you want it
- Get instant estimates based in local pricing when you are providing estimates to your customers
- Organise your estimates and quotes “per project” to keep track of your paperwork and costs in one place.
BuyMaterials also has a universal Trade Account which gives 30-day credit across all merchants in one place – register once, spend anywhere on the platform. Get a £50 discount on your first order by registering here!
Get your admin sorted and start experiencing the benefits of an organised business. Sign up for a 14-day free trial with Tradify. No credit card required. No commitment. Or pop over to one of our live demo webinars to see Tradify in action.
