Every pound saved during a construction project can make a significant impact on the bottom line. The ability to accurately benchmark pricing for materials and ensure you’re getting the best value is therefore an essential component of a project’s success.
Here are our tips for effectively comparing pricing and maximising value.
Market Research
Conduct thorough market research to understand current market trends, including pricing fluctuation and availability of construction materials. Monitor industry publications, online marketplaces, and supplier catalogues to gather pricing data.
Request Multiple Quotes
Obtain quotes from multiple suppliers for the same materials to compare pricing and negotiate better deals. Request detailed breakdowns of costs, including material prices, delivery charges, and any applicable discounts.
Utilise Price Indexes
Refer to industry-specific price indexes, such as the Builders Merchants Building Index (BMBI), to track price movements for construction materials over time. This data can help contractors gauge whether prices are trending upwards or downwards.
Negotiate with Suppliers
Negotiate with suppliers to secure favourable pricing terms, bulk discounts, or preferential payment terms. Building strong relationships with suppliers can also lead to better pricing and value-added services.
Consider Total Cost of Ownership
Evaluate the total cost of ownership beyond the initial purchase price, including factors such as transportation costs, storage expenses, and maintenance requirements. Opting for higher quality materials with lower lifecycle costs may result in better long-term value.
Explore Alternative Materials
Consider alternative materials or suppliers that offer comparable quality at lower prices. Evaluate the performance, durability, and environmental impact of alternative materials to ensure they meet project requirements.
Monitor Exchange Rates and Tariffs
Stay informed about currency exchange rates and trade tariffs, especially for imported construction materials. Fluctuations in exchange rates and imposition of tariffs can significantly impact material costs.
Engage in Consortium Purchasing
Collaborate with other contractors or join purchasing consortiums to leverage collective buying power and negotiate better pricing with suppliers. Pooling resources can result in cost savings for all parties involved.
Track Historical Data
Maintain records of past material purchases and pricing data to identify pricing trends and patterns. Analyse historical data to forecast future pricing and anticipate potential cost saving opportunities.
Regularly Review & Update Pricing Strategies
Continuously review and update pricing strategies based on market dynamics, project requirements, and supplier performance. Regularly benchmarking pricing ensures that contractors remain competitive and maximise value for materials procurement.
By following these strategies and actively benchmarking pricing for construction materials, contractors and housebuilders can effectively manage costs, optimise procurement decisions, and enhance overall project profitability.
Quick & Easy Price Benchmarking with The Build Chain
At The Build Chain, we understand that the process of benchmarking pricing and finding suppliers that offer the best value can be time consuming. That’s why we built our online materials procurement platform for contractors and housebuilders.
We remove the manual, repetitive elements of procuring materials, such as calling round different suppliers and chasing quotes, and replace it with a simple 4-step process:
- Submit one enquiry form for the required materials
- Instantly connect with suitable suppliers local to site and receive quotes
- Compare all quotes in one dashboard based on price and distance from site
- Buy direct from the supplier of choice in the way you usually would
We know that pricing isn’t the only important factor to consider. This is why we encourage our network of over 500 merchant branches to respond to enquiries quickly – over 80% of accepted quotes are received within one hour of sending the enquiry.
Each quote received also includes an ESG savings percentage. To calculate this, we take a 26-tonne truck and based on how close to the live site per mile work out the percentage savings of carbon emissions from the furthest to closest supplier.
Want to find out more? Book a demo!
