Construction purchasing groups are a proven resource to save you money and bolster the networking power of your business.
Here’s proof: Check out our blog, 4 benefits of joining construction networking groups, that outlines the top reasons for connecting with fellow builders.
Even after checking out that article, you might have your doubts about construction networking groups. Why would you work with the competition? Are GPOs a waste of time? It is just plain awkward?
You’re not alone. These worries are common — but far from the truth when it comes to CBUSA’s construction group purchasing organization.
Most current members of CBUSA have a little hesitation before they join. Soon, however, they’re proved wrong — in the best way. But don’t just take our word for it. Hear from other builders on how networking with your peers — dare we say, even your competition — is the right solution to get ahead in this competitive industry.
3 reasons to join a construction purchasing group
Do you fear you’ll have to give away all your secrets? Do you wonder if the membership is worth the commitment? Are you afraid that expanding your network will create extra work?
Keep reading to learn three reasons why you should join your local chapter. Get advice below from CBUSA members that said yes to the savings, the stability and the supportive community.
1. The savings
Let’s get right to it. The savings are why you looked into joining a group purchasing organization in the first place. And there are so many benefits that fall under savings, including negotiations, supplies and rebates — to name a few.
Luis Jauregui from Jauregui Architecture Interiors Construction out of Austin, Texas, learned his company became stronger once they worked with the competition. Luis scores major savings because CBUSA has paved the way for a simplified purchasing process.
“Sometimes smaller builders rely too much on their salesperson for purchasing,” Luis said. “I always felt when you do that, you’re a little bit at the mercy of the quality of your salesman. With CBUSA, a builder has more infrastructure to lean on. A smaller company can have CBUSA provide the support to make the process of purchasing way easier.”
Many builders already have close connections with their suppliers. Randy Reitz of Urban Nest Homes felt this way, too, until realizing building is a competitive industry and most suppliers are primarily concerned with their bottom line.
“As a small builder, we prided ourselves on the relationships we formed with suppliers and lumberyards,” Randy said. “We thought, ‘oh yeah, you know this guy, they are our buddies and are really trying to take care of us.’ But pretty quickly you realize the lumberyard is there to make money and rightfully so.”
The revenue stream from CBUSA’s supplier partnerships is an appealing benefit. Tim Jackson of Tim Jackson Custom Homes finds the real savings in the rebates and CBUSA pricing.
“CBUSA is another revenue stream we look at,” Tim said. “It’s nice to look back and see we’ve got $40,000 or $50,000 in rebates a year.”
The CBUSA purchasing process helps streamline business. Plus, there’s no overhead for preparing contract negotiations and price quotes are immediate.
“How I purchase with CBUSA is a game changer for my business,” Tim said. “With the CBUSA website, I’m able to get access to CBUSA pricing immediately versus having to get actual quotes for multiple different vendors.”
2. The stability
Maybe your business is running along smoothly with only minor hiccups. Why shake things up? Well, other small builders are experiencing the same minor (or major) hiccups you are — and when you work together, you find real solutions.
“As small builders are trying to grow their businesses, they have the same struggles we did,” said Mitchell Bode, president of Boone Homes. “They go out and try to negotiate contracts on their own with vendors or manufacturing partners. 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.”
During these past couple years, the construction business has been anything but steady. Many builders found refuge in the constancy of a group purchasing organization.
“Honestly, in the past two years with COVID-19, one of the biggest things 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.”
New Leaf Builders out of North Carolina jumped into a CBUSA membership mostly because of the minimal commitment but later found their membership paid dividends on their purchases.
They’ve expanded their business from building about 10 homes per year in 2010 to over 75 builds a year in 2022.
“We did jump into the program because of how low a risk it was for our business. The commitment as a builder is super low financially,” said Alan Baslow, New Leaf co-founder.
“We started switching over more and more products over time,” Alan said. “Very quickly my hesitations with CBUSA were squashed. There were so many places we could benefit from just by how we approached purchasing.”
“We aren’t opening our books,” Alan said. “But we are talking about real opportunities on how we can make each other stronger.”
3. The supportive community
In many areas of life, a supportive community leads to success.
A building community does this by banding together to create purchasing, negotiating and networking power in numbers.
Luis Jauregui wasn’t initially sold on partnering up with his competition.
“At the onset, we had a tendency to be a little more protective of sharing our subcontractors or our secrets. However, we’ve found we’re all stronger when we work together,” Luis said. “There’s a good comfort level now with people jumping in and offering support wherever someone needs it.”
Luis, a trained architect, wanted to start building his designs. When working with CBUSA, he found the group purchasing particularly helpful. He was able to lean on his community to ease the complications that come with purchasing materials. This made the network worthwhile.
Jon Showalter, chief operator officer at Homes by Dickerson, sees the advantages of CBUSA connections, such as sitting down with vendor execs like David Kohler. Homes by Dickerson is one of the most successful home builders in the Raleigh, North Carolina chapter — and Jon gives credit to the network.
“It’s because I’m part of this group I have the opportunity to sit down with people like David Kohler, head of Kohler, and have a discussion,” Jon said. “The doors are open to so much more networking than any one business.”
Alan Baslow of New Leaf agrees: “The most appealing thing is the accessibility to people on the manufacturing side you won’t get anywhere else. I had dinner with the vice president of sales at Lennox. You just don’t have access like that as a small local builder without a CBUSA membership.”
There’s success in camaraderie
Randy Reitz at Urban Nest Homes recognizes the value of the savings, the stability and the supportive community.
“We joined CBUSA in 2019,” Randy said. “It has probably been to date one of the best things we’ve done for our company. We benefited not only from cost savings and purchasing but with camaraderie and mentoring relationships with other established builders.”
“I’m competitive. So yes, CBUSA is saving us money, and we definitely appreciate that side of it. But, at the end of the day, like every one of those guys in my group or nationwide, I’m trying to be the one to beat.”
Become a member today and start working with this successful group of builders.