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Old 10-26-2006, 01:48 PM   #1
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Material Supplier Discount


Need some advice, what is the range of discounting a contractor normally receives from a material supplier?

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Old 10-26-2006, 02:53 PM   #2
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Material Supplier Discount


It varies widely depending on the geographic location, industry and the ability of the contractor to pay on time.

In some areas a slow paying small contractor may pay the same or more that the public.

I am familiar with the concrete industry. Because it is a high volume industry (and becoming more so), a home owner paying cash may no pay any more than slow pay contractor. If you are doing concrete work on many (25 to 100) homes annually the contractor will get a better price or at least better service and guaranteed availability in periods of shortages. Discounts in this industry are much lower than others that have a dealer - distributor arrangement.

Some industries have very small discounts, but very strict controls on who the sell to. They do this because they do not want to baby-sit each project.

Each is different.

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Old 10-26-2006, 02:59 PM   #3
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Thank you ! That makes sense, wish me luck!
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Old 10-26-2006, 03:15 PM   #4
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Material Supplier Discount


We have 4 levels of pricing:

"Job-quote" for very large commercial/municipal pricing.

"Truck load" for quantities greater than an 18-wheeler loads

"Less than Truckload" for small quantities in full packaging.

"Broken Packaging" small quantites, in less than full packages.

In this industry, what distinguishes Homeowners from Contractors is broken packaging, as a rule. Contractors will order to the nearest package, while homeowners want exactly what they need. Everyone that enters or calls says they are a contractor, of course, so we make no distinction in pricing (other than volume as shown above), only in service.
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Old 10-26-2006, 05:43 PM   #5
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Material Supplier Discount


Doing smaller jobs around here their isn't any discount.
I'd assume when a developer orders 2,000 sheets of plywood they get a discount though.

The paint store on the other hand will give me a 20% discount because I'm in there so often.

Last edited by Tmb9862; 10-27-2006 at 04:39 PM.
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Old 10-30-2006, 05:42 PM   #6
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Material Supplier Discount


wow that sucks. Up here it's by volume and who you know. Works out much better.
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Old 10-30-2006, 06:24 PM   #7
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Material Supplier Discount


If discounts are arbitrary, that usually means the price is bumped up to make up for the good feeling of a discount.

Volume discounts are just a business decision because of the lower sales/service cost and the buying power.

As a sales manager, have used dicounts applied to increases in purchases over the previous year. It is a common method to increase loyalty and familiarity.

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