I've been in business for less than a year. Mostly small stuff my biggest job contracted so far has been less than $2000. Most of my jobs are in the $75 to $200 range. So I don't make a large monthly order. I have 2 supply house accounts set up in my business name, CES and Grainger. Grainger is so overpriced I haven't bought anything since the first purchase I made when I opened the account. CES is more reasonable, but my prices on wire are 15% to 20% higher than prices at Home Depot or Lowe's. Is this common or am I just getting ripped off. I went to HD/formerly Hughes supply yesterday and their rates are about the same as what I'm paying at CES. Should I expect this, all of the contractors I always worked for previously tried to stay away from home depot/lowe's for stuff we had to buy. So I'm assuming the supply houses are giving other contrators prices equal or lower than the big retail supply stores Home depot and lowes'. Any advice on negotiating to get reasonable rates? The supply houses tell me that home depot actually takes a loss on the wire they sell, i say that is complete bs. there is no way they would considering the price of wire and how much of it they sell.
I doubt that HD is taking a loss on anything, but with their purchasing volume with General Cable, they probably buy millions of feet per month. I'm sure that this, combined with buying directly from the manufacturer, they get it at a much lower cost than many supply houses. Same thing with Lowe's and Southwire. Even the bigger (national) supply houses probably don't purchase with that kind of volume.
I do find that staple items, such as cable and plastic boxes are cheaper at the home centers than at supply houses. Both HD and Lowe's have commercial sales desks and will offer certain discounts based upon your monthly purchasing volume. You need to ask them about it. I have a commercial account with both and I think that I get slightly better pricing than the advertised prices. Honestly, I haven't checked lately.
Grainger is great for those hard-to-find items, but I'd never buy any kind of electrical supplies from them unless it's a 600 volt pin/sleeve connector or something like that. With them, you are paying a premium for the convenience. I haven't bought anything from them in years, but they sure do come in handy when you are looking for that strange reversing starter. I must say that their inventory is mighty impressive to say the least. I don't mind paying more for that kind of stuff.
To answer your question, I really don't think that you are being ripped off. Discounts revolve around purchasing volume, and like you said yourself, your purchasing is relatively low. I know it's a Catch 22 situation, if you could get better pricing, you could do more volume, but the suppliers aren't going to take the risk. They expect you to make the first move.
Don't forget that the big box stores are very competitive with each other. If Lowe's has Romex at a price less than HD, HD will match and sometimes even beat it. Again, it's a matter of asking the question. Hope this offers you some insight.
I have often marveled at how HD and other big box stores can sell certain materials at retail, below what I can get them for at my supposedly wholesale suppliers. They don’t sell at a loss, they just negotiate directly with manufactures and distributors for better volume pricing, and remove the middleman [suppliers] from the process. I don’t like that they sell these materials to non-trades people though, but now most supply houses do that too anyway.
Last summer when I needed to restock my supply of #12 stranded THHN, wire prices had gone way up since the last time I purchased this wire and I was blown away at the prices that all of the supply houses where quoting, which were from $99.00 to $129.00 per 500 FT spool of BK, RD, BL, WH, GRN. I just happened to be at HD later that week for something else and saw the same brand of stranded #12 THHN for $60.00 per 500 Ft. spool. Needless to say, at around $40.00 less per spool, I cleaned the shelf off. I also noticed a significant price difference for 250 FT coils and 1000 FT spools of RX. Not so much for MC cable though. You do have to be careful when you shop at HD though. Sometimes the quantities are different in the packages or on the spools and can actually cost more per piece or per foot than at the supply house. Grainger is a great supply company for motors, but their other prices are definitely extremely high. No real discounts on tools either. I used to have to spend at least $5000.00 annually to get their contractor discount. Your also paying for all those pretty red and white boxes when you have items shipped
Re: Supply House prices vs Home Depot
#172871 12/28/0702:25 PM12/28/0702:25 PM
Are contractors just uninformed about these prices? The current prices at lowe's locally here are $39 per 250' roll of 14-2 nm and 59 for a 250' of 12-2 nm. Last week I was quoted $48 and some change for a roll of 14-2 at ces. I laughed and went less than 2 miles to home depot and saved 200 bucks on everything I had to buy. And the good thing about that is, if one store is sold out, I just go to lowes and they usualy match the price and I buy what I am needing.
I'm just frustrated that I was wasting my time with the supply houses, why throw that 15 to 20% difference into the pockets of supply houses which should be catering to contractors instead we can save money by going with big box retail that sells to every other do it yourselfer out there.
The 'supply house' has an advantage to those of us who do comm/ind work. Yes, big box probably will beat $$ for resi mat'l but.....what about what they don't have?
Also, the supply house account is net 30, sign & drive. I guess some of us remain loyal to the supply houses.
As to WWG....when the supply house doesn't have it, or can't get it in a reasonable time...ya pay the price. 24 hr emergency works at WWG, and net 30 accounts also. And as a bonus, parts for a whole lot of things.
HotLine1, I thinks it’s good to be loyal, as long as you feel comfortable that you’re not getting beat. However, I always have to keep a close eye the bottom line. Grainger is a good supplier for some commercial/industrial, but I still need to shop around regardless of the type of work. Other suppliers like McMaster-Carr Supply, MSC or Graybar also have 30-day net commercial accounts and their prices for explosion proof fixtures, motor controls, transformers and such are usually less than Grainger. They also usually have better freight rates as well, even when considering that Grainger used to ship free for orders over $900.00. If you do Telecom then Graybar’s telecom division is the place to shop as they have or can get you anything telecom. Compared to Graybar, Grainger has absolutely nothing for any real telecom work. It looks like Graybar is now carrying some decent fire alarm equipment too. If you need HV utility supplies, also take a look at Graybar and McMaster-Carr.
Re: Supply House prices vs Home Depot
#172876 12/28/0707:14 PM12/28/0707:14 PM
GRAINGER: Unless next door and in a pinch.... Pass therm by. Graybar by far (for this type supplier)is a better bet.
With that said, I do my fare share of HD/Lowes etc shopping. BUT... When I call my supplier at 10 to twelve on a SAT. or 5 past 5 on a Tuesday, and order.
They will either wate, or place it out behind the shrubs so I can get it!!!! Thats what LOYALTY gets ya. That I wont change. A little more sometimes, Yes. But SERVICE, and keep my As_ outa the sh-t, YES!
So I lean towards the supplier. Build a relationship (like anyother) and you reap bennefits.
With that you get some cell #s and they may just get you what you need when their closed.
Generally the more you buy on average typically the better pricing you can get with a wholesaler. It costs more per part to fill small orders then it does on large orders. In a sense the big EC's get bulk pricing. It is kind of like the difference in buying TP at Costco vs. the local grocery chain.
I DON"T do a large volume. It's the RELATIONSHIP, and the guys at the counter/inside sales.The more you are there, the more you are known,the better the RELATIONSHIP. I will go to them first. It has paid off more than twice.
Last edited by leland; 12/28/0707:43 PM.
Re: Supply House prices vs Home Depot
#172880 12/28/0707:47 PM12/28/0707:47 PM
I used to get better prices than my employer.On everyday small items (of course). But always watch their numbers. I remember 1 day at 7:45, I bought old work boxes for $.79,and at 3PM they were $.90. (commision).Different sales dude.