Razor-thin. Too often, that’s how many home builders would describe their profit margins – sharp and slim.
As a result, many in the residential construction industry look constantly for ways to cut operating costs. Group purchasing organizations have risen as one of the most effective solutions. In fact, a Pro Builder article by noted industry expert Tony Callahan argues the numerous benefits.
As both a certified professional in supply management and certified supply chain professional with nearly two decades of experience, Callahan is uniquely qualified to present the positive impact a group purchasing organization can have on home builders’ bottom line.
Callahan also acknowledges that group purchasing organizations aren’t for everyone. He asks in the introduction, “Are you willing to share cost information, change from your existing suppliers and trades and alter your material specifications? If not, you’re unlikely to benefit.”
Additionally, he goes on to note that not all of these organizations have their members’ best interests at heart, nor are they all dedicated to ethical business practices. Or, as Callahan says, “Remember how your parents warned you about hanging out with the wrong crowd? That advice is GPO-relevant.”
In the remainder of his article, he provides clear advice on what to look (and look out) for when choosing a group purchasing organization. You can read the entire article here, but spoiler alert: You’ll find everything Callahan touts in a reputable, top-notch group purchasing organization right here at CBUSA.
If those are some of the potential cons to joining a construction group purchasing organization, then what are the pros? We started with the bad and are now diving into the good. That’s because the benefits heavily outweigh any of the drawbacks.
Here are three of the biggest pros for home builders looking to join a group purchasing organization like CBUSA:
1) Drive your purchasing costs down
This is the big one – the benefit that persuades most to go from doing business alone to doing it with the support of a construction group purchasing organization. CBUSA can help lower your cost to build, plain and simple.
That happens through a variety of ways. First, we are constantly negotiating with suppliers to get the best prices on essential materials like lumber or block and siding. But that’s just the beginning. The savings really start to come in because you’re no longer just buying as a party of one.
By combining your volume with other CBUSA members in your market, you’ll get the type of price reductions usually only saved for the biggest builders nationwide.
2) Gain access to exclusive rebates
Group buying isn’t the only way an organization like CBUSA leverages lower costs for custom and independent home builders. You’ll also boost your bottom line after joining through exclusive rebates.
CBUSA specifically works with 15 national brand names to bring those savings to you. Our members can get the high-quality supplies their clients want at a low price they’ll love. And it’s all because we work with these brand partners to deliver rebates only available to CBUSA home builders.
3) Streamline procurement processes
The best builders want to work on their business – not in it. These types of contractors don’t have hours and hours to spend negotiating better prices or delivery times from suppliers. Every second counts. CBUSA knows this and does the hard work for you by taking on much of the stress of material procurement.
We know the amount of hours and effort it takes to research different suppliers and find the very best prices. We’ll take care of that, so you can spend less time searching and more time building your business.
4) Network and problem solve with other leading home builders
One is the loneliest number … that phrase doesn’t just make for a timeless song lyric. It also makes for a poor way to do business in a highly competitive market. Because nobody knows the challenges a home builder goes through quite like other home builders.
When joining a group purchasing organization like CBUSA, you’re immediately part of our builder network. This network includes 500-plus other builders who face the same challenges you do. Now you can lean on one another to get better prices, brainstorm solutions to problems and gain a competitive edge over others.
You’re not just better together. You’re stronger. More profitable. More successful.
Interested in joining the ranks of independent builders who are benefiting from all that a partnership with CBUSA has to offer? Contact us today!