Question for builders/remodelers (how much, new home, buying)

[JerseyJames]

I am doing preliminary research on a a new business model. I will be doing in depth market research, but for now I have a question for builders and re modelers on costs.

What is the average % costs for materials only of the following compared to your TOTAL costs(materials and labor) of a project for new home construction and major remodeling? This is for builders who buy direct from lumber yards.

• Wood and composite Interior and exterior trim work(no stairs)
• Windows and doors(both interior and exterior)
• Wood flooring
• Cabinetry/millwork

I don't need a breakdown for each just a general number.
Example:

New home construction costs 400k. All materials costs 24k. Total of materials is 6% of my overall construction costs.

[wileynj]

Originally Posted by JerseyJames

I am doing preliminary research on a a new business model. I will be doing in depth market research, but for now I have a question for builders and re modelers on costs.

What is the average % costs for materials only of the following compared to your TOTAL costs(materials and labor) of a project for new home construction and major remodeling? This is for builders who buy direct from lumber yards.

• Wood and composite Interior and exterior trim work(no stairs)
• Windows and doors(both interior and exterior)
• Wood flooring
• Cabinetry/millwork

I don't need a breakdown for each just a general number.
Example:

New home construction costs 400k. All materials costs 24k. Total of materials is 6% of my overall construction costs.

Nice try : ) I have a feeling you won't get many responses though as no builder wants anyone knowing what their markup is : ) There is a book out that will help you with figuring out the costs of materials vs. the cost with labor. I'll see if I can find the name of the book and dm you with it.

[JerseyJames]

Originally Posted by wileynj

Nice try : ) I have a feeling you won't get many responses though as no builder wants anyone knowing what their markup is : ) There is a book out that will help you with figuring out the costs of materials vs. the cost with labor. I'll see if I can find the name of the book and dm you with it.

Oh hmmmmm. Didn't think of that. I am not looking to be the builder . Looking into being the supplier of the products.(distributor)

Thanks for the offer, I will keep my eye on the inbox. If any builder doesnt want to share those numbers in public maybe you can Private message me?

I don't care how much your markup or labor is. Profit is good All I care is what I need to do to compete with existing distributors for those specific products only.

[wileynj]

Originally Posted by JerseyJames

Oh hmmmmm. Didn't think of that. I am not looking to be the builder . Looking into being the supplier of the products.(distributor)

Thanks for the offer, I will keep my eye on the inbox. If any builder doesnt want to share those numbers in public maybe you can Private message me?

I don't care how much your markup or labor is. Profit is good All I care is what I need to do to compete with existing distributors for those specific products only.

I wood..lol - start with lowes and home depot. They will be your biggest competitor in this industry. Then I would call other distributors..pretend you are a builder and ask them for a price quote. Much easier than trying to get a builder to talk prices with you...especially now that he/she knows that you are trying to sell them something...they will low ball you : )

[desertsun41]

Originally Posted by wileynj

I wood..lol - start with lowes and home depot. They will be your biggest competitor in this industry. Then I would call other distributors..pretend you are a builder and ask them for a price quote. Much easier than trying to get a builder to talk prices with you...especially now that he/she knows that you are trying to sell them something...they will low ball you : )

Home Depot and Lowes will only be your competitor in consumer recognition. Not price. Those RETAIL stores charge top dollar for everything they sell. Some items are marked up even higher then MSRP.

You want to be a distributor huh. Good luck. Many large Retailers do just what Walmart does. They bully wholesalers into selling their items so cheap that the profit margin is tiny. Well either sell us at that low price or we will spend our billion dollars else where. Whataya do?

Your issue will be finding a supplier who is able to sell to you. Many large Retailers make wholesalers sign a contract saying they will not sell to him or him or even no one at all but them.

You have a whole lot of research in front of you. Then even when you have the information, how the hell are you going to convince a retailer to buy from you? You may convince some small time remodelers who have to save the few dollars to survive. But what are you going to offer them in return for the convenience HD and Lowe's offers?

Here is one hint. I been in the cabinet business for a life term. The markup from wholesale is 65% depending on brand. I buy my gold screws from a wholesaler. He tells me he sells to Lowe's for 85 cents a pound box. Lowe's retails it for $5.97 per pound box. Pretty good huh? Those 2 X 4 framing studs you pay $2.50 each in Home Depot? Home Depot purchases them for 45 cents each. Now Joe's Lumber Yard likely will pay a dollar or so each because they do not buy the dollar volume Home Depot does.

Good luck.............

[Sergio M]

When I did contracting, I never gave a price based on square footage, because every home and every project is different. You may be comparing a home with only 10 windows, to a home with 20. Some may be happy with vinyl single hung windows, some want Pella windows with built in mini blinds. Custom work is priced on case by case basis and not square footage. An old builder once gave me some advice that still hold true to this day, You should pay 1/3 for the land, 1/3 for the construction and you should make 1/3 for yourself. There is a local lumber yard that may be interested in selling, I can look into if you are interested.

[JerseyJames]

Originally Posted by wileynj

I wood..lol - start with lowes and home depot. They will be your biggest competitor in this industry. Then I would call other distributors..pretend you are a builder and ask them for a price quote. Much easier than trying to get a builder to talk prices with you...especially now that he/she knows that you are trying to sell them something...they will low ball you : )

Thanks Wileynj,

I already know what the box stores sell for as well as regional/local privateer lumber yards including trade and volume discounts. I was looking for the ratio of product costs compared to overall costs of construction.Guess I didn't explain myself well enough, and now that I think of it I would give away too much information to get the answers I am looking for specifically.

Originally Posted by desertsun41

Home Depot and Lowes will only be your competitor in consumer recognition. Not price. Those RETAIL stores charge top dollar for everything they sell. Some items are marked up even higher then MSRP.

You want to be a distributor huh. Good luck. Many large Retailers do just what Walmart does. They bully wholesalers into selling their items so cheap that the profit margin is tiny. Well either sell us at that low price or we will spend our billion dollars else where. Whataya do?

Your issue will be finding a supplier who is able to sell to you. Many large Retailers make wholesalers sign a contract saying they will not sell to him or him or even no one at all but them.

You have a whole lot of research in front of you. Then even when you have the information, how the hell are you going to convince a retailer to buy from you? You may convince some small time remodelers who have to save the few dollars to survive. But what are you going to offer them in return for the convenience HD and Lowe's offers?

Here is one hint. I been in the cabinet business for a life term. The markup from wholesale is 65% depending on brand. I buy my gold screws from a wholesaler. He tells me he sells to Lowe's for 85 cents a pound box. Lowe's retails it for $5.97 per pound box. Pretty good huh? Those 2 X 4 framing studs you pay $2.50 each in Home Depot? Home Depot purchases them for 45 cents each. Now Joe's Lumber Yard likely will pay a dollar or so each because they do not buy the dollar volume Home Depot does.

Good luck.............

Thanks desertsun41,

I am already set up as a distributor of "some" of those products on my list and have wholesale pricing lists on the rest of it. I already buy and can buy the rest for less than half what the big boxes sell for. Same as above I cant give more detail.

Originally Posted by Sergio M

When I did contracting, I never gave a price based on square footage, because every home and every project is different. You may be comparing a home with only 10 windows, to a home with 20. Some may be happy with vinyl single hung windows, some want Pella windows with built in mini blinds. Custom work is priced on case by case basis and not square footage. An old builder once gave me some advice that still hold true to this day, You should pay 1/3 for the land, 1/3 for the construction and you should make 1/3 for yourself. There is a local lumber yard that may be interested in selling, I can look into if you are interested.

Thanks Sergio,

You are correct. Variables are too wide and I cant give more info. Thanks for the offer on buying the biz. I want to start from scratch. It will cost less to start from scratch then to buy an antiquated system and infrastructure.Business model is too different. This will be my third company



Thanks for your time and input everyone. I cant give more info. Time for serious research