There’s no better friend to any merchant than a fair competitor.
—James Cash Penney
They say when your back’s to the wall, you find out who your friends are. And as times get tighter than an over-tuned banjo string, we estimators tend toward two polar-opposite camps: those of us who wheedle every dime for the short-term edge, and those who continue to rely on long established relationships to see us through. I certainly don’t condemn those who choose the former avenue, given the smell of desperation in the current atmosphere. But where the material side of the equation is involved, experience dictates that I side with the latter and rely on those who have delivered in the past, both literally and figuratively. Not that I’m sentimental, I’ve just seen what works and, more to the point, what doesn’t.
I know a number of commercial drywall contractors who believe they have developed a creative advantage on the material side in various ways that theoretically gives them a competitive edge in bidding and performing work, but from what I’ve seen, the assumed benefit from their purchasing schemes is seldom if ever realized. Some have developed direct-buy relationships with manufacturers’ reps, while others simply rely on buying in volume from an independent, low-overhead distributor. In each case, this sort of approach requires the costly maintenance and handling of large amounts of material that may or may not be suitable for the jobs they may or may not procure. In addition to the “hidden” cost of storing, tracking and stocking, a strong sense of the clairvoyant is necessary to guard against falling on the wrong side of price fluctuations in an unstable market. I have seen many a contractor stockpile a yard full of drywall or metal at what they perceived as a volume discount, only to see an unanticipated price reduction in the market upon which his competitors were free to predicate their bids.
Then there were those who fastened their fortunes to volume purchases of cheap Chinese drywall. ADM (ah, Dios, mio)! But hey, that’s another whole story.
For myself, I’ll stick to the tried and true method of letting the professionals on the material side of the industry compete for my business while I focus on what I do best: procuring and building projects. I like to keep as few as three or as many as five regular distributors quoting to me on a regular basis—preferably suppliers who give me the security of being affiliated with a national network but who have developed a history of service and integrity that is small-town friendly. Even in this bottom-line atmosphere, I shy away from material-men with upstart, low-overhead outfits who promise me the world and deliver nothing but heartburn.
I have a strong sense of loyalty to the three or four suppliers who quote to me, and these relationships have a long-term value that outlasts the kind of dark times we are going through. I value them not because they take me out to lunch or to a ball game, but because they have come through for me and pulled my fat out of the fire when I was compelled to make unreasonable demands of them under deadline. Or because they hung in there and continued to provide me with competitive quotes through long periods when I could not justify awarding them my purchases. Or because they honored price commitments when it was damaging for them to do so. Or because they remedied a stocking error by physically pitching in to help correct it.
I try to repay these demonstrations of extra effort with the same kind of honesty and integrity that they show me. I continue to factor in past performance when I award the buyout of a project (bottom line is first, but not necessarily foremost), even in these dog-eat-dog times. I give my suppliers constructive feedback when their price is not low. I never give a preferred salesman “last look.”
So here’s to all those mutually beneficial relationships born of fair competition in a free and open market. They’ve seen us through the good and the bad times. I see no reason to abandon them now.
Vince Bailey is an estimator at Darrell Julian Construction, a commercial drywall/framing contractor based in Albuquerque.
