Builders Merchants saw a slight decrease in sales in November. However, with a slight decrease in overall sales and revenue per location, overall profits dipped slightly. On one hand, construction equipment dealers saw a 3.2% decline in overall business while retailers saw a 4.5% increase. The overall industry saw a small increase in business, though it is unclear what this means for manufacturers.
As more contractors and smaller businesses look to distance themselves from traditional brick-and-mortar stores, Builders Merchants are turning to the Internet to attract customers and grow their business rather than local retailers. While many factors account for this change, the Builders Merchants Association says that there are several key areas where this trend will be most likely to take place. Builders Merchants use the internet to attract customers and potential clients who are looking for custom home building, remodeling, and repair. They use their websites to showcase their services and to show other contractors how they can best serve their local builders community.
Builders Merchants are able to tap into the enormous supply of independent contractors who have traditionally built homes and businesses on their own. This group of professionals has traditionally sourced building materials from their own suppliers rather than having to purchase the needed materials from a wholesaler. By using a combination of local materials and trade discount price, DIY builders are able to save their own money and generate recurring revenue. Additionally, because they are not tied to any one company, DIY builders are able to get the most value for their dollar, which maximizes customer satisfaction.
In the past, it has been difficult for independent builders and DIYers to find quality building materials from wholesalers and turn them into a profit. Builders Merchants have typically been able to leverage their trade contacts and vendors to help them find vendors with building materials at wholesale cost. Builders Merchants also have an advantage in that their customers are generally building contractors who are willing to sell to their association for a reduced rate. In return, the Builders Merchants collects a commission on the sale of the material to their customers.
Builders Merchants are able to take advantage of the fact that many independent contractors have little to no capital to invest in their own business. This is a great opportunity for Builders Merchants. Independent builders will often take advantage of their builder friends to help them obtain materials at a good price. However, the primary obstacle to entering the Builders/DIY niche is the fact that most independent merchants don’t have access to the specialized knowledge needed to be successful.
Most small-business owners who want to break into the home improvement arena will need to purchase their own equipment and will be unable to source it at the best prices. Builders/DIY independent merchants can take advantage of the fact that many experienced contractors and subcontractors are reluctant to build with non-included companies or suppliers. Contractors may be willing to work with independent merchants on a one-time basis in order to procure their services in the future.
Builders Merchants are also able to tap into heavy equipment suppliers. Power tools make up a large percentage of the market for heavy construction equipment. Many builders prefer to work with established heavy equipment suppliers because they are familiar with the companies and know that they are serious about building without waste. Builders Merchants who can locate a supplier of heavy equipment that is willing to do a reasonable amount of subcontracting can really make money. Additionally, these suppliers are often willing to do custom projects for a Builders Merchants business as well. These kinds of custom jobs usually involve excavation, leveling, and other heavy construction projects that are too large for most subcontractors.
As a third, Builders Merchants can tap into local contractors through the various trade associations that your area has. There are many trade groups and organizations of local contractors out there who want to do business with reliable Builders Merchants. You just need to find the ones that are most interested in partnering with your builder’s or contractor’s business. If you do some research on the internet you should be able to find a list of local contractors who might be interested in working with Builders Merchants. 6 Ways ERP Can Save Your Business Time and Money