By Jeson Pitt
As a contractor, you must aim to cut costs wherever possible. This will help you win more projects and gain higher profits. One way to reduce overall costs is by reducing materials costs. Understand how you can bring down the costs of construction products or other materials. Let’s see how you can do that.
4 WAYS TO REDUCE MATERIAL COSTS
Track your materials. What materials do you have in your inventory? What is the quantity of those materials? Where are they located at a given point of time? You can answer all these questions by tracking your materials.
Set up an effective system to track every item. It doesn’t have to be complicated, just follow simple steps that can increase accountability in inventory tracking.
Tracking will allow you to figure out which materials you are running out of and which materials are in excess. Based on that, you can either order more materials or cut down some supplies. Moreover, by keeping a check on your materials, you can analyze their need and use.
Buy standardized products at a lower price. As a contractor, you will need dozens of parts for one equipment installation. You may even need the same parts for almost every job. So, when you buy these parts for a lower price, you will cut your overall costs. Consider using standardized parts instead of custom parts as the latter will be heavy on the pockets.
Try to source such parts from liquidators as they offer really good prices. Since they deal with discarded materials, they offer the parts at a price that is lower than the actual market rate. However, don’t assume that the quality is compromised since the price is low.
Minimize material stock. Do not overstock materials. Buying extra materials will increase maintenance and storage costs. They may also get lost or stolen. Avoid buying materials that you are never going to use.
Using standardized materials will help you keep the costs at a minimum. If you need a unique part for equipment, order it in the right quantity rather than buying an entire load of it.
Train your workers about when and how to buy the materials so that you can avoid spending extra on unnecessary things. Replenishing the materials as the stock runs out is a better option as compared to buying excess and storing it.
Hire a dedicated warehouse manager. It would be a mistake to give the responsibility of managing the warehouse to an existing staff member. They won’t be able to focus on their core tasks neither handle warehouse management properly. You may think that hiring a warehouse manager would be expensive but it will pay for itself in no time. The warehouse manager would know exactly how to organize the warehouse, implement the right warehouse processes, and bring down costs.
CLOSING THOUGHT
Construction can be an expensive business but by implementing the right measures, you can bring down your materials costs. Buying the construction materials from the right sources like liquidators will be helpful.
About the author
Jeson Pitt works with the marketing department of D & F Liquidators in Hayward, CA and regularly writes to share his knowledge while enlightening people about electrical products and solving their electrical dilemmas. He’s got the industry insights that you can count on along with years of experience in the field. Jeson lives in Hayward, CA and loves to explore different cuisines that the food trucks in the Bay area have to offer.
Modern Contractor Solutions, October 2019
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