Now that the Internet has made pricing so transparent, it gets even
more frustrating to walk into a local supply house and realize that
you are not getting the same deal that contractors get.
- Any tricks on how best to get "contractor discounts" from the local
- How big are the discounts typically to their parallel off-the-street
retail (not list) price?
- Is the discount typically the same for plumbing vs. electrical
vs. building materials vs. gardening/landscaping, etc.?
- What about for "finished" fixtures (e.g., lamps, fawcetts,
cabinets) vs. basic materials (e.g., wire, pipe, lumber)?
Register as a business, get the proper tax ID number and do the reporting
required by licensed businesses. Some suppliers require a minimum purchase
per order or per year to qualify.
I can take you to places that will not even let you in the showroom unless
you are a contractor or are with a contractor.
I once saw a fellow hand a couple of eggs to the server at a Braums
Ice Cream store for them to put in his milk shake! So yes, sometimes
people take their eggs to the restaurant to have them prepared!:~)
(Remove the Primes before e-mailing me)
Braum's has a pretty limited area. Where are you?
Dan in Oklahoma City
Keep the whole world singing . . . .
DanG (remove the sevens)
Contractors discount is mostly myth these days at the modest end of the
I haven't seen much better than 10% in a long time, and plumbing and electrical
Costco and the Borgs are generally as cheap.
Volume in lumber sales will get you a cheaper price but if you shop around,
drive a hard bargain you can even get those deals.
But if all you are building is a sundeck most places are going to charge you
But if you are in the high end market ($400 toilets, etc) designers and builders
can get deep discounts.
This is Turtle.
What your asking here is how to get a contractor's discount on product and not
be a contractor. First let me tell you a little secret here. If you get a
wholesale warehouse to sell to you as a customer / John Q. Public at
contractor's rates and the other contractors find out about it. Your going to
cost that warehouse about a 100 times in lost sales to real contractor that they
would ever hope to sell to you. If they sold you say $500.00 of wholesale goods
they would loose about $50,000.00 to $500,000.00 worth of equipment that the
contractor would have bought without knowing about the sale to you. The
Wholesale suppliers would have to be water headed to sell to you with that big
of a lost they are looking at.
Nothing is free in this world ! Go get you a contractor licences, Contractor
Liability insurance, and a Sales tax number and start buying wholesale. You can
then brag about being a wholesale buyer and everybody will be happy. I buy maybe
$300K of wholesale goods in my HVAC business a year and get a pretty good
discount. If you could buy say $10K of good from them a year. They would give
you pretty close to my discount on goods. The more you buy the more the discount
The only other choice it to suck up to a contractor and let you buy off his
account for a discount.
This is one of the most ridiculous things I have ever heard, more
reminiscent of the old Soviet system than the current Internet-enabled
world with ever more transparent and competitive pricing.
Why would the contractor care (other than indirectly) if I saved a
couple of dollars on a project that I am going to do myself anyway,
particularly if I could always get the items at the same or better
pricing on the Internet or maybe even at Home Depot?
In fact, I would turn your argument on its face -- if a contractor is
getting good service, selection, and pricing at his/her current
supplier, why would he ever consider risking pricing and service on
$500,000 of spend just because I saved a couple of dimes on some
switch or a couple of bucks on some fixture.
Globalization, the Internet, and increasing competition are changing
the face of business forever, making pricing more competitive and
transparent than ever before. Now that pricing can be looked up and
compared on the Internet, it is a lot harder for suppliers to price
discriminate between retail and wholesale customers except on the
basis of true volume efficiencies (e.g., buying pallets or cases) or
when the purchaser has dominant purchasing power (think Walmart). The
differential between wholesale and retail pricing erodes as big box
retailers push down the retail price while Internet-suppliers (and
others) allow individuals access to contractor-like pricing.
Those who can't adapt to this reality are not going to survive.
Each supplier is free to decide what discount is required to maximize
its profit (volume x margin). If a supplier believes that selling to
enough people like me at a discount brings them more profit and
prevents me from going to the Home Center or Internet then by all
means they should sell to me at or near the contractor discount. If
they believe that they need to give you more of a discount to retain
your business or that you are cheaper to serve due to your volume then
maybe you will get a bigger discount. However, in this day of
multi-billion dollar purchasers (like Walmart), your power as a volume
buyer is a lot closer to my thousands of dollars a year than to Home
Depot or Walmart's purchasing power.
Finally, from a "moral" viewpoint, I have always thought it to be
borderline sleazy that contractors make an additional *hidden* margin
by marking up the price of materials. I am happy to pay a fair and
competitive hourly labor rate and to pay a delivery charge on
materials, but I fail to see why a contractor should make an
additional hidden profit by marking up materials due to the old "cozy"
relationship between suppliers and contractors. I now use the Internet
all the time to challenge contractors on marked-up materials pricing
thereby avoiding being gouged and getting a better sense of my labor
vs. materials cost. In fact, this is no different from the uproar over
hospitals marking up the price of Tylenol (beyond the cost of goods
and administration) or government contractors marking up the cost of
Sounds like you have a case of bitterness here. If I can get
contractor-like pricing without doing the above than all the power to
me. Since you weren't going to get that business from me anyway, it
doesn't really hurt you, except perhaps your ego that some "layman"
like me is getting competitive pricing without belonging to the
That is of course another tried-and-true alternative :)
On Tue, 02 Nov 2004 13:31:13 GMT, email@example.com (Jeffrey
J. Kosowsky) scribbled this interesting note:
Then I suppose it is ok with you when we get lower prices on shingles
when we buy by the truck-load as compared to buying by the shingle
like you can at Home Depot?
Wal-Mart doesn't carry anything that will help most contractors in
their day-to-day business. Even Home Depot is only marginal when it
comes to carrying good, quality product and tools. These are
"consumer" oriented stores, not stores that really cater to
We don't mark up the cost of our materials. Not all contractors do.
But I understand the reasoning. Look, you will end up paying the
contractor you hire the same amount, regardless. Contractors have what
are known as fixed expenses. You know, things like licenses, liability
insurance, worker's compensation insurance, health insurance,
insurance on trucks, equipment expenses, and other overhead expenses.
These expenses must be met. Then there is labor that must be paid; yet
another expense that must be met. After all these items have been
satisfied then, and only then does the contractor pay himself. Would
it help you to feel better if the bill you received showed the price
paid by the contractor for materials as being the price paid by you
and the rest of what you seem to think of as an inflated price charged
to you as "profit?" (Although you don't know what the true profit is
since you don't know what that particular contractor's operational
Who has a case of bitterness here? Take the time to learn how to
service your own HAVC without killing yourself. Learn how to do
concrete work, framing, drywall work, electrical, plumbing, finish
carpentry, tree trimming, irrigation systems, appliance repair,
masonry, etc. There are countless things you need to know and buy when
working on people's houses. Learn all these things, get all the
required paperwork, do enough business (although you probably won't
come close to any kind of volume to warrant economies of scale
discounts) and you too can get discounts at real supply houses.
BTW, the "discounts" places like Home Depot give to contractors? That
is still higher than what real contractors pay at real supply houses.
And the materials and equipment you buy at place like Home Depot is
usually of inferior quality since they like to squeeze their suppliers
for every penny they can and charge the customer just as much as they
can get away with.
(Remove the Primes before e-mailing me)
I have no problems with discounts -- the "market" will typically
decide the most efficient and profitable way for suppliers to
price. The only thing I was opposing was the entitlement atitude that
somehow a license entitles a contractor to a god-given right to
special pricing unavailable to homeowners. Volume is obviously one
reason for better pricing, but the usediscounts depends on the volume, on the
margins, on the volume efficiencies, and on the relative power of
buyer vs. seller.
WalMart and HomeDepot are only examples of how purchasing and pricing
power is shifting. Obviously, I wasn't saying one should buy
specialty electrical supplies from Walmart
I fully understand that the business only works if the homeowner
covers the cost of licenses, liability, workers comp, health, etc.
I just think it is more straightforward if that is built into the cost
of labor rather than as a hidden materials markup. After all, we all
know that if I am paying $40/hour for an assistant, that assistant
is not taking home $40/hour. However, I would prefer the price of
materials to be equal to the actual cost plus a small markup for
reasonable pickup & delivery charges.
What I am saying is that licenses have nothing to do with pricing in a
free market. Volume is another story, but in the current more
efficient supplier marketplace, pricing is much less sensitive to
volume than people think (as evidenced by Internet pricing and big box
I am not bitter because I trust the market and know that I have many
ways of learning the actual pricing and getting a reasonable mark-up
I agree, but Home Depot has still forced many smaller hardware stores
and supply stores to lower the price that they charge consumers since
otherwise they will lose all the consumer business and even some of
the small-time contractor business (despite the quality issues at Home
I agree that a business has to cover overheads, but many want to cover
the overheads twice over: once by marking up the materials, and again by
marking up the labor charge.
When we lived in Taiwan, I never paid labor charges to get my car fixed:
the markup on the parts covered the workers' wages. In NY I paid retail
price for the parts PLUS $90/hr. labor charge.
Whether you vote Democrat or Republican today, the country will still be
run from boardrooms in the USA and elsewhere, not by your elected
On 11/02/04 10:04 am Jeffrey J. Kosowsky put fingers to keyboard and
launched the following message into cyberspace:
It's all the same in the end: zero markup on labor plus ten dollars markup on
parts, ten dollars markup on labor plus zero on parts, or five on each, all
add up to the same thing. The contractor has to make his profit somehow. Why
quarrel over what he chooses to call it?
Well, duh! Mechanics in NY get paid a bit more than mechanics in Taiwan. If
the service stations in NY adopted the same pricing structure as you describe
in Taiwan, they'd have to charge a *much* higher markup on the parts in order
to make their profit -- and then you'd be screaming about the outrageously
high markup on parts.
It's all the same in the end.
Because pricing transparency is more fair and market efficient. People
and contractors can make better (and fairer) decisions when the
pricing is not distorted and each party can make an informed decision
based on true costs and true benefits. Same reason that laws call for
truth in labelling.
The only thing that really matters is the total cost of the job. Assuming that
the quality of materials and workmanship are equal in both cases, what
difference does it make if one guy charges $100 for materials and $400 for
labor, and another guy charges $200 for materials and $300 for labor? The
final cost is the same either way. If you maintain that one bid is "better"
than the other because the cost breakdown goes one way instead of another,
this would seem to me to indicate a need for therapy.
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