Construction Bargain Strategies
7-8. Buy materials separate from labor. - Electronic Edition
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Naturally, a tradesman who handles materials for customers will add to the cost to provide for overhead and profit. This mark-up could range up to 100% of the tradesman’s cost. Since list prices are artificially high, the tradesman can point out that his marked-up price is “still under list price.”
However, the mark-up can range to 200% of original cost. And often you can even beat the original cost by making a special, well-researched buy. There are several examples of that here in the comments by O-B's. One thing I notice in the comments is that if the sub provides the materials, they are responsible for replacement if the items fails. On the contrary, the vendor is often responsible for replacement when you buy directly from him, I find. One example is paint, purchased by O-B's Greg and Debbie C. from Sherwin Williams. There was some kind of a problem in matching the paint on one wall with the other walls in their dining room, or with paint in the hallway, and they called Sherwin Williams out to see for themselves. They agreed with Greg and Debbie, and supplied materials and labor to repaint. Then the O-B's still didn't like it and called SW out again. Again SW agreed it wasn't right, and paid again for paint and repainting until all agreed it matched properly. For us, a big example was plumbing fixtures. My plumber handed me a list of fixtures he wanted to supply, literally scrawled on the back of an envelope. It was a thousand or more dollars over what I had budgeted. I said I'd like to price it separately, and he made the usual spiel about how it was his responsibility if any of the fixtures failed. I wasn't worried about that, I was worried about the thousand dollars that wasn't in the budget. And it happened that our friend, the school janitor had a good friend who was a rep at the plumbing supply. We bought under his account with our credit card using his generous "friends" discount, over 40%. We saved the thousand dollars of overage and then some. But that wasn't the end of the story. The plumbing, good fixtures from Moen, had a lifetime warranty. It turns out this is typical in the plumbing fixtures market. That meant that we called Moen any time we had a problem, like a handle that stuck a little bit when used, or a spigot that leaked a little bit. They replaced with courteous prompt shipping at no charge every time, maybe five times now we've called. And when they couldn't match your original model, they offered you an upgrade at a nominal charge and free overnight shipping. I doubt you'd get service like that from a plumber you used nearly 20 years ago... if you could find him. The most dangerous thing about letting a sub buy major materials for you is potential materialmen's liens. This is where the sub procures material for you, but neglects to pay. The items are installed at your house. You pay the sub, who still neglects to pay the supplier. The supplier comes after you, filing a lien on your property.
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