Trade Discounts for Owner Builders

Owner Builders and Trade Discounts

16/6/2019

Owner Builders Blog

Are owner builders entitled to builders or trade discounts?

I get asked this a lot by many of my owner builder course students.

When I respond, I always think of a famous quote;
“you get what you negotiate, not what you deserve!”

I guess that goes for owner builders as well. Simple truth is, that with the advent of the mega hardware stores Like Bunnings, the volume they sell and the deals they can source through their buyer dictate the price point that the are able to offer any of their products.

So, does that mean that owner builders should just accept what they are offered at full retail?
No, you always need to ask. I have many a good friend who has been very successful in a variety of areas and the one common theme is that they always buy well.

Then, how can owner builders make get the best price out of their suppliers and contractors.
It takes work and organisation. To get a great deal out of your hardware supplier, the most successful approach is to do exactly what a savvy professional builder or contractor would do. Have the suppliers compete for your business and have them quote on a job lot.

Show them you are serious, go to the suppliers trade department with a well compiled and organised set of tender documents. Specify exactly what it is you want to purchase, provide, quantities, product and model numbers, profiles and colours. Let them know you are seeking offers from other suppliers, make them work for your business.
Making the supplier want to be your provider of goods, is the best way to get a good deal, but make certain you know exactly what it is you want before you present the tender documents to them. Understand that each supplier may have different products they will offer, so be sure you understand your own mind. What is negotiable what is not and what represents a suitable alternative.

Remember that this does not just work with suppliers, you need to do the same work with the selection of trade contractors for your owner builder project.

Always seek three quotes and make certain the tender documents include specifications and work instructions that give you the best opportunity to receive quotations that can be compared like for like and that they are based on exactly what you have specified and that they meet your expectations.

Sounds easy? Well, it’s not. Like all areas of owner building, the best way to ensure success is to be disciplined and organised.

Good luck with your owner builder project.

Rick

34 Comments

Geffrey Holgate

5/8/2019 20:50:34

Trade discount, but it depends on who you know not what you know!

rick heaton link

10/4/2020 11:02:31

Hi Geoffrey,

To some extent this is correct, but as you will see from some of the student replies below, you need to make yourself known.

I agree with the comments around going into the store.
Talk to the manager or the sales department.
Give them an opportunity to quote on all your project requirements.

Let them know you are shopping around.

If you go in with well identified specifications on all you materials and PC's. including model number etc

Show them you are organised and have an understanding of how to get the most from your suppliers.

Great post though, and really good to see everyones thoughts.

stephen pumpa

21/8/2020 13:03:51

Also agree their are discounts to be had. Shop around, but talk to the same person in the shop to build a relationship.

Steven Riley

17/5/2020 11:57:15

I agree. The difference in pricing depending on who you say you know, or who referred you can be huge

Tristan Tran

5/11/2021 03:53:47

Yes, totally agree. There are so many products and suppliers of these. It is integral to compare and do the research to get the best price.

Andrew Spanos

6/10/2019 17:56:23

And if you actually ask. If you let someone know that you will be buying all your construction materials for the projects from their store they are likely to set you up with a trade discount.

Nenad Vicko kalebic

1/4/2020 12:57:56

I agree with you Andrew, I think a good approach is to try and package up a number of items with a supplier to get an overall bulk discount.

10/4/2020 11:04:34

I agree Nenad.

See my comments to Geoffrey above.

Steve Turner link

17/1/2021 17:45:19

i agree with Andrew all you need to do is ask for a better price but dont expect to get the same price as a builder building 50 houses a year . But any saving is a good start

10/4/2020 11:03:27

Hi Andre,

I agree and see my response to Geoffrey.

Mitchell Cameron

8/9/2021 12:49:44

Yes, I agree! When they know you're going to buy all of your products and materials from their store they will definitely be inclined to give a trade discount.

Kristen Garratt

4/12/2019 11:26:29

Ask and you might get a discount. I found if you be nice, and let the sales staff know your going to be purchasing a larger quantity or will be coming back often for an ongoing project, they would be more willing to offer a discount to ensure repeat business and build loyalty. Ultimately you as a consumer have the power, so you need to find the best balance between price and also other items such as product quality, after sales service and advice etc.

(Evidence of technology use and to promote discussion)

10/4/2020 11:07:06

Agree Kristen,

You need to approach this professionally and as a registered builder would in order to make certain you get the suppliers attention.

That said, there is so much competition and margins are so tight, the discount is not to the same levels as it has been in the past.

What you will most likely save is the builders mark up if you buy well.

Rick

Ian Dawson link

10/10/2021 17:01:08

Its worthwhile to shop around. I've found discounts where i least expected to before.
Saving on the builders mark up is definitely a bonus though.

Andrew Nez

10/4/2020 10:52:53

How about we start to support the little guys again..!
Go & see your local small hardware store, plumbing, electrical supplier etc,(if you still happen to have any left in your area) introduce yourself & your project/construction requirements. I am sure they will be more than happy to offer up competitive pricing, technical advice, quality local trades people, area specific materials & personal service.
Look after these guys & they will more than look after you.
Remember, initial price is an important factor to any build, but you can get so much more, that will probably end up saving you a lot more in the long run... some thing that people tend to forget in these days of instant gratification..

10/4/2020 11:10:02

Hi Andrew,

Agree 100%.
It would be great to see the little guys back and competitive.

It is tough though.

The big guys have so much purchasing power and the ability to price match and are better positioned to do job lots that meet the clients specification more closely.

The small hardware stores are pretty limited in choice these days with which wholesalers will even supply to them.

Personal service is still valued and hopefully it can somehow make a resurgence.

Adam Attwood

19/10/2021 10:00:17

This is so true! Many a time when I've tried to use a local supplier only to find that either a they don't stock it or b need to order it in and then (seem to) charge an even higher price for it.

I still try to use them when possible but before I do I have already researched rough prices and no whether I'm being taken for a ride with respect to their markup or whether the markup is reasonable

Jerome Andrew

20/5/2020 14:26:11

There is definitely many options out there- the best thing to do is size up as much material you will need and buy in bulk. Yes Bunnings do trade discounts for owner builders, however the quality is very hit and miss. If you are prepared and obtain at least 3 quotes from local suppliers you are likely to get the best deal whilst also supporting smaller businesses.

Margareta Carter

4/8/2020 11:43:38

A good start is to look at prices on line before going in to the stores. They will take you more seriously when you know what you are talking about generally.

Kristina Smith

19/8/2020 09:02:14

I find searching online really useful and then ringing around local suppliers for their pricing. Often telling them you can get a better price elsewhere is enough for them to sharpen their pencil.

William Elphinstone

3/12/2020 14:59:43

Thanks for the good tips everyone! As mentioned previously if you don't ask you most likely won't get. There are often discount schemes in place that the general public are not aware of, but if you ask you might be able to access.

Bernie Brown

6/1/2021 14:36:40

I've been lucky to manage a number of hospitality venues over the years and have been a part of a number of renovations and extensions up to $4m plus. Just simply asking questions and getting different builders contacts has allowed me to source not only competitive tenders but access to suppliers as well. Im careful to disclose any conflict of interest and would never jeopardize my roles by using taking any advantage. Simply put, ive been able to bypass potentially poor results by directly approaching only reputable, recommended trades and suppliers. If big builders continue to engage with certain suppliers with their business reputation on the line you can be fairly well assured you are on the right track.

Zhu Jiehan

23/2/2021 07:02:19

If we can get the cheaper supply from overseas, it might be a lot cheaper than bunnings and stuff. Is it worth the time to get it? Or is there any policy we need to follow or documents to submit.
Thank you

Sean

2/4/2021 09:12:38

Remember you always get what you pay for. Sometime the cheapest way to do things is the most expensive. Do it once do it right

Damien

6/6/2021 14:41:30

Can't agree more. Be mindful of some (not all) cheaper materials, fixings and fittings. I know a case where after a winning tender plumbed a school, the water quality was deemed unsafe to drink as it had a high lead content. The cheaper (Chinese) fittings that were used to price the job actually contained lead, which was unknown to the tradesmen. It is good to question.

walter mcloughlin

29/4/2021 08:58:12

There are certainly discounts out there, but rather than go to the mega hardware stores, try your local hardware store first. They are very keen for your business. Even if they are a few dollars dearer on some items, we need to support them, but if your ever have a problem they will go out of there way to help and generally there service is more professional and accurate.

Kristy Davison

8/6/2021 11:11:24

Hi all,
Will haggle and shop around a lot more the next time I buy materials. I couldn’t believe some of the savings on items I have been getting by shopping around.
I was too scared to ask in the beginning but now it’s like a game.
I’m winning at the moment !! Haha

Peter Curtis

29/6/2021 21:09:16

It pays to check prices of multiple items.
Eg sometimes places like Bunnings will provide a good price on pipe but then make up for the difference with all the fittings. I agree with the more you can shop at one place the better.

Mikhaila Aubrey

24/8/2021 15:13:38

In regards to Bunnings, does anyone have any insight into how you get your Powerpass up from the standard 5% discount? I am pretty sure it would be based on purchase amounts but was wondering if by being an owner builder (rather then just a business customer) it may bring it up to 10% automatically?

James Morrison

3/9/2021 08:26:45

I always try to negotiate where possible and always shop around for items. It's amazing how much you can save if you give it a go! Great article. Thanks

8/9/2021 12:45:19

I agree, I doesn't hurt to ask for a trade discount. You can shop around and compare pricing. It is surprising on what you can save by exploring your options.

Dean Carlton

6/11/2021 13:12:27

Great suggestion about presenting a tender document to suppliers to 'make them work' for my owner builder business - and to encourage them to discount - I will use that one.

laith

9/11/2021 21:01:27

ensure you dont change your scope of works as stated in the article. This makes it harder for you to compare quotes if some have quoted on the older price. you will have to call them or email them again to update the quote. dont update the scope of works unless its crucial.

Patrick Chevers

2/1/2022 17:20:56

Likewise, if you have things needed and sorted into job lots its much easier to discuss requirements and negotiate.
I do really prefer dealing with small businesses so I can develop a relationship.

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