It’s no secret that summer is often the busiest time of year for construction projects. With favorable weather conditions and longer daylight hours, builders like you seize the opportunity to push forward with your projects.
However, amidst the hustle and bustle, managing material procurement can become a daunting task, leading to delays, cost overruns and project bottlenecks. This is where having a group purchasing organization by your side can help provide streamlined solutions, enabling you to keep projects moving smoothly during the peak summer season.
Top challenges builders face during summer construction season
Before we dive into how CBUSA assists builders, let’s outline the challenges you’ll face during the season that never slows down.
Increased demand
During the summer months, the demand for construction materials surges as there are hundreds of thousands of projects happening simultaneously across the country. This means builders are all going after the same resources, which can lead to potential shortages and price hikes.
Time constraints
Because there are so many jobs happening at once, and the start date for your next project is dependent on the completion of your current project, you must adhere to strict timelines. This leaves little to no room for delays caused by procurement inefficiencies.
Cost management
Rising material costs coupled with competitive bidding for limited resources can put a strain on project budgets. This not only puts added pressure on your clients to provide more funds but could also impact your profitability.
Labor shortage
The ongoing labor shortage presents a significant challenge for home builders across the industry. As demand for new homes continues to rise, the shortage exacerbates construction delays, leading to increased costs and potential project bottlenecks.
Supplier management
Trying to coordinate with national vendors, manufacturers and local suppliers for various materials and products can be overwhelming. Having to manage the day-to-day operations for multiple projects without the right resources can lead to additional administrative overhead and unnecessary errors.
How can CBUSA’s group purchasing organization combat these challenges?
CBUSA offers a comprehensive solution to streamline material procurement. Here are four ways group purchasing will ensure seamless operations during your hectic summer season and beyond.
1. Combined purchasing power
By leveraging the collective buying power of its builder network, CBUSA is able to negotiate favorable pricing and terms with suppliers. These are deals that independent home builders could get on their own.
“[Small builders] go out and try to negotiate their own contracts with vendors or manufacturing partners,” said Mitchell Bode, president of Boone Homes in Richmond, Virginia. “Closing 70 homes a year doesn’t seem like a lot to these national partners, but when you group us all together and work as a team, it makes us look bigger, so we can negotiate better.”
As a combined group, CBUSA ended with 15,000 home closings and $10 billion in revenue in 2023. Based on this combined number of closings, we ranked within the top five of the Builder 100 list. This means our members are performing at the same level as national builders, which enables them to access high-quality materials at competitive rates.
Getting materials at the same price as national builders means you’re saving money and increasing revenue. Having more money in your pocket improves cash flow and expand your capacity to take on more jobs during the busy season.
2. Committed buys
By committing to purchase materials from specific suppliers, builders simplify their procurement process. They can establish long-term relationships with preferred vendors, reducing the need for repetitive bidding processes and administrative overhead associated with sourcing materials from multiple suppliers.
Committed buys, or negotiated locked-in material pricing, also allows CBUSA member groups to lower their material costs – ultimately lowering costs for homeowners.
“Honestly, one of the biggest [benefits of CBUSA] for us has been the lumber pricing and the committed buys,” Mitchell said. “All the commodity prices have been up and down, and CBUSA has helped us provide more of a stable pricing structure. That has allowed us to price our homes a little more efficiently for our customers.”
Committed buys ensure you’ll always have the material you need on hand ahead of time. This will ensure your deadlines are met and projects continue to move on your packed schedule.
3. A team of purchasing experts
CBUSA’s dedicated team plays a pivotal role in simplifying the procurement process for builders. With extensive industry knowledge and expertise, our team works closely with our builders to understand their specific project requirements and challenges. We leverage our extensive network of suppliers and negotiated contracts to source high-quality materials at competitive prices.
“It’s nice having CBUSA watch out for things we don’t have the bandwidth for,” Gerry Felton, co-owner of Triple A Homes in Raleigh, North Carolina. “Whether it’s helping with national contracts, creating relationships with manufacturing partners or just having someone watch pricing – it’s been extremely beneficial to us.”
The team at CBUSA provides personalized support and guidance throughout the procurement process. By offering proactive communication and efficient logistics management, we free up capacity and allow builders to focus on what they do best – especially during the busiest time of year.
4. Cost savings and transparency
Through competitive pricing and a streamlined procurement process, CBUSA can help you optimize your material budgets – maximizing profitability without compromising on quality. You can also leverage negotiated contracts to provide homeowners with clear and upfront pricing information for materials and services.
“We’re able to use our better pricing as a competitive advantage and adhere to our client’s bottom line, which they appreciate,” said Lain Chappell, president of Solid Rock Custom Homes in Colorado Springs, Colorado.
CBUSA builders can accurately communicate costs, giving clients a good understanding of what their project budget will be from the beginning. This transparency enhances customer satisfaction and contributes to a smoother construction experience for everyone.
Ready to experience the benefits of group purchasing?
Imagine yourself as CBUSA member. Summer is here, and you’ve got more jobs than you know what to do with, but you’re not stressed because you have a leading GPO on your side. You have a team to negotiate the best material pricing, a group of supportive, like-minded builders, you’re increasing revenue and growing your business.
Ready to get started? Send us an inquiry today.
