Money saving idea/question for contractors
bradleyheathhays
| Posted in General Discussion on
Hey there once again. My daytime job finds me at my buddy’s ‘cabinet shop’ where no actual woodworking is done. We’re a cabinet supplier with a little warehouse space to hold contractors’ and clients’ orders. We can order cabinets either built or flat pack unassembled. Over the last couple years working there I’ve asked a few contractors how much different the pricing would be if they got their cabinets unassembled instead of assembled…and most of them said they’d save about 50%. 100% of our contractors order them built btw. Building them is crazy easy but everybody opts to pay thousands more to have us put their cabinets together. A wall cabinet takes about 10 min to assemble and an average base about 15 min. We just delivered 20k worth of kitchen and bathroom cabinets to my other buddy’s contract built house; it was about 32 cabinets altogether. If we were to have put together these same cabinets it would’ve taken us about a full day.
So you see where I’m getting to here? Why don’t I advertise myself to contractors as the guy who’s been building their cabinets for the last two years and see if they’re willing to order unassembled, save a ton of money and pay me maybe half of what extra they would’ve spent? Sounds like a win win huh?
So my question is…what issues aren’t I seeing yet with my idea? My contractor buddy who’s helping me work on developing this says he doesn’t think contractors will want to get into the minutia of adding a different step to the process they’ve already settled into…building houses the way they do. The way he put it is that contractors want to know one ‘cabinet guy’ who gets it all done from design to supply to installation. Almost all the contractors we deliver to also use our company’s two installers, and my idea would make things a little bumpier for them. I’m sure lots of contractors in my city of 330k population have their own installers but my contractor buddy says that good installers are few and far in between. Of course, all I see is a big chunk of change to be made, for both me and the contractors, and I think they’ll be interested in hearing about my idea.
Any thoughts? Thanks as always.
Replies
Well most contractors that I know and have done work for operate on a percentage over cost, calculated carefully and award based to cover risk or they work Time plus materials plus a percentage. The first needs to know what things are going to cost in total before making a bid. Any bumps in the road and that is a loss in money and for small contractors possibly bankruptcy. To do business with a subcontractor that delivers in a timely and efficiant manner but is maybe a little high priced is a precious thing .
For a T&M guy there is no advantage. If he's honest he must pass that saving on to his client and with that he also loses his percentage for the more expensive item. The " honest" part might be a little over your head.
But, your employer--- or is it your " buddy" brokers cabinets and also offers assembly and installation services. He pays workers to do that work and all the other expenses that goes into actually paying someone -workers comp ,SSI Etc. and takes a profit . Hes not making much on the cabinets because hes competing with Home Depot ,IKEA and 50 other places , its the full service that his business offers --that is his business not cabinets--- but your talking about end running old buddy ,pal o' mine and snaking the part of his business that a 12 year old could do and that requires no overhead save for the cost of an electric screw gun! To think, all this time ,I've been wrong about the definition of " buddy"!
Oh by the way on the Nextdoor.com site I came across an advertisement( posting)recently that someone put up . "I can assemble your IKEA cabinets for you. I've done a few already." Did I mention that hes 12 years old? ...."Oh, and don't worry my Dad keeps an eye on me. " I wished I had some IKEA cabinets so I could hire him!
I deal with 100% commercial contractors but they do cabinets also. We do doors, frames, and hardware so I'm not speaking to cabinets directly. We offer pre-installed hardware which cuts out 90% of the on site labor to swing the doors and cuts down 90% of jobsite garbage from our division. The jobsite garbage is a bigger deal then most people realize. Our shop labor rates are much lower that carpenters on site labor. I can't say what you are suggesting won't work but here is a real world example of what's happening with labor.
If you first inform buddy #1 that you are leaving to open your own business, and second, stay away from ALL of his relationships you can take your shot.
If you go after his clients he will do what he can to kill your baby in the crib. If you how him the respect he deserves you might be able to leverage his supply chain and he may even guide business to you.
Nobody likes a rat, and if your idea does not fly you'll have trouble finding a job smelling like one.
I definitely appreciate all the advice. These nuggets will hopefully get me ahead of the game and think through some of these problems before they arise.
By the way, my boss does not deserve respect. He is a Baboon at times and everyone knows it. In our town he is known as the joke of the cabinet industry.
He's your buddy....
No I never referred to him as my buddy. Read more carefully please.
You referred to at least two different guys as your buddy several times.
You're right. I did refer to him as my buddy. Sorry. Actually he WAS my buddy when I first started working for him but I wouldn't say that's the case any longer.
Leaving aside the moral issues, this is certainly something that the contractors have already considered.
They could go to most any home store and buy flat packed furniture, but it's not worth their time.
You have to ask why they would buy yours rather than going to a cheaper supplier who has a large factory batching them out at very low cost in whichever country has the lowest labour costs and a stable power grid.
From the point of view of the installer, an assembled unit is in place in no time - no parts to find or lose, no faulty pieces either - imagine the cost if you found you needed an extra fixing, or part and had to go fetch one. They are also likely paying your friend quite a lot less than they would themselves be paid to do the work.
I am sure you would get some takers for the idea - just advertise like everyone else...
Thanks Rob. I appreciate the analysis and encouragement.
You are welcome. It is an interesting question. It got me thinking so I hope you don't mind a bit more...
I have been in the position of starting a business from scratch - I went asking potential customers what they wanted from a health centre and even if there was interest in opening one.
Thinking about this from your perspective, I would ask some tradies what their reason is for this.
Could you make it easier for them?
Is it the time? Or is it that they find flat pack daunting?
- Instead of Ikea style fixings, all in a strip, you could supply complete boxes with a few extras.
- You must know which parts tend to break if incorrectly fitted - provide spares of those perhaps.
- Half the time Unlike flat pack furniture, which has to make the package as small as possible, you can afford to stack things with the first used part on top.
- Could you pre-fit some fixings?
- Can you guarantee delivery of spares in a timely fashion if needed?
Yes I think it IS an interesting question. I'm on 11 different woodworking forums and I've posted this question on all of them, which I don't always do depending on how difficult the question is to answer. And I've gotten the entire spectrum of responses. All the way from encouragement to reprimand for stepping on my bosses toes. In the end, I recall being told at some point 'you're not really in business until you've been sued.' Not that I'm looking forward to it but I wouldn't mind being in the envious position of being sued, from my point of view now. Means I'm making some waves.
So glad you gave the suggestion to ask tradesmen around here why they order assembled instead of flat pack and go from there.
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