Sourcing materials for Developers

6 Replies

Hello Folks,

I am planning to start a building materials business starting with just one product line due to starting capital. I don’t have the best selection or inventory, but will have the best prices.

That being said, I am looking for insight/feedback on the idea of developers forming partnerships with a supplier to optimize costs for them and in return help a supplier business get started. I heard this might be a good place to ask.

As being RE developers, would you be keen in this of deal? (Not with me per say)

Thank you in advance

Originally posted by @James Phan :

Hello Folks,

I am planning to start a building materials business starting with just one product line due to starting capital. I don’t have the best selection or inventory, but will have the best prices.

That being said, I am looking for insight/feedback on the idea of developers forming partnerships with a supplier to optimize costs for them and in return help a supplier business get started. I heard this might be a good place to ask.

As being RE developers, would you be keen in this of deal? (Not with me per say)

Thank you in advance


What is your product?  Many are very low margin these days so this is a capital intensive difficult business to be in and make a profit. First step is to identify your market and client. Are you speaking about builders or developers? This will be a very difficult uphill proposition as builders and developers will be very reluctant to do business with a start up especially if you are under capitalized. Builders and developers are also very loyal and are not easily moved away from their suppliers and vendors. Keep in mind someone comes along pretty much everyday who claims to be cheaper or offers cheaper prices on the first project to try and get their foot in the door.

Originally posted by @Greg Dickerson :
Originally posted by @James Phan:

Hello Folks,

I am planning to start a building materials business starting with just one product line due to starting capital. I don’t have the best selection or inventory, but will have the best prices.

That being said, I am looking for insight/feedback on the idea of developers forming partnerships with a supplier to optimize costs for them and in return help a supplier business get started. I heard this might be a good place to ask.

As being RE developers, would you be keen in this of deal? (Not with me per say)

Thank you in advance

What is your product?  Many are very low margin these days so this is a capital intensive difficult business to be in and make a profit. First step is to identify your market and client. Are you speaking about builders or developers? This will be a very difficult uphill proposition as builders and developers will be very reluctant to do business with a start up especially if you are under capitalized. Builders and developers are also very loyal and are not easily moved away from their suppliers and vendors. Keep in mind someone comes along pretty much everyday who claims to be cheaper or offers cheaper prices on the first project to try and get their foot in the door.

Greg,

The product is Construction Plywood. I’m looking at around 75% margin.

I’m targeting low-medium volume residential developers. My builder references primarily get their supplies from big-box stores. 

I’m hoping to negotiate a deal with developers who are just looking for the best deal and optimize cost by providing a complimentary service to source additional products for them.

I plan to offer a first-time buyer discount (20-30%) and commissions for referrals to build credibility and expand my inventory.

Thank you for your feedback, any other nuggets would be of great help!