When you are successful, your supplier is successful ...

But if you are not honest and up front with your supplier then they have no reason to want to do business with you

Always keep your supplier posted if you are going to be late on a payment and/or if your general contractor is late on his payment to you.

Try to be loyal to one major supplier as this will most often benefit you and your pricing. That age old adage 'the more you buy the more you save' does apply to some (if not all) suppliers. The higher your volume of purchases the better your discount is.

If you spread your orders to several different suppliers of the same product then you most probably will spend more money on your materials than if you give all of your business to one supplier.

Remember that the discount you receive on your material purchases helps you to be more competitive in your bidding.

A consideration when choosing your supplier is how many locations do they have? If you plan on doing work in just your local area, you can get away with a "one-location" supplier but, if you plan on venturing outside of your supplier's normal delivery area you might pay quite a premium on delivery if they don't have a 'store' near your jobsite.

If you are a new contracting company, chances are you do not have a lot of money to buy materials to supply and install on a project. I know that my materials on a project can run anywhere from $500 on up to $50,000 and more.

Often times my material needs are greater than my bank account, so I am fortunate that my supplier utilizes joint check agreements. Talk to your supplier about joint check agreements to find out if they use them or if they would consider using them.

Warehousing your materials

Frankly, I warehouse as little material as possible. When I have a project ready to start, I send a purchase order to my supplier and have the material delivered to the jobsite.

I don't have to keep track of inventory (which can make taxes a lot easier to deal with) and because I don't warehouse the material, I seldom have to carry the material on my truck.

I do occasionally pay a delivery/set-off fee but, in comparison to the headaches of running an inventory and the time and costs involved with picking the material up at your warehouse and hauling it yourself (or having an employee pick it up and haul it), that delivery/set-off fee is pretty reasonable.

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Something to be aware of: If your employee is carrying your material in his vehicle, your insurance will have to pay if he has an accident. If your supplier is hauling your material and something happens, your supplier's insurance picks up the tab.

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Because the city of Victorville will not allow me to run a contracting business from my home, I rented a commercial location in a neighboring city. Because I do not stock material I was able to rent a small unit (with it's own address and mail box) for a monthly rental fee. I use my warehouse to store left over minimal amounts of material, from my completed projects, that I know I will need in the near future (hint: your warehouse is also handy for hiding Christmas presents for your little ones!), and I use the warehouse address for business licenses.

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