If you’re looking to save money in construction, then paying attention to the materials you’re sourcing, and how you’re sourcing them, is imperative. For most firms, it’s possible to make substantial savings by buying commonplace materials like ballast in large quantities. But this practice also confers other benefits. Let’s take a look at some of the more important ones.
Cost Savings on Essential Materials
First, we should dwell on the financial savings that come with economies of scale. When your suppliers sell large quantities of the same material, they’re able to spend less on those materials on a per-unit basis. Fixed costs remain constant, which means that substantial savings can be made and passed on to the consumer.
Of course, this sometimes means that the construction firm has to shoulder the cost of storing any excess materials. For this reason, it might be worth pooling your resources with other firms and driving down costs by agreeing to make the same kinds of purchases.
Ensuring a Steady Supply of Materials
In most cases, a steady and reliable supply of key materials might be what prevents a construction project from grinding to a halt. Essential materials like cement, steel and ballast are used in just about every project – from multi-million-pound public buildings to garden renovations. If you aren’t able to source just one of these key materials, then you might find yourself unable to operate. For this reason, buying large quantities can make your business less risky. If you have a stockpile of key materials, then you’ll be better able to cope with interruptions. On the other hand, it’s also vital that you form strong relationships with reliable partners.
Lower Transportation and Delivery Costs
Another advantage of buying in bulk is that you’ll have to make fewer shipments. This can ultimately lower your carbon footprint, which can be essential if you’ve made an explicit commitment to more sustainable construction practices.
Stronger Supplier Relationships and Negotiation Power
The more materials you’re ordering in one go, the greater your leverage will be when you come to negotiate a discount. Major one-off purchases leave a psychological impact on suppliers in a way that smaller payments do not – even where the total sum being spent is the same. Ideally, you might look to negotiate a discount after you’ve demonstrated your reliability as a customer. It might be that you have to agree to spend a certain amount in advance, in order to get the best possible price.