Buyers Guide – Plumbing Material (Secrets About Buying They Don’t Want You To Know About) Part 3***PROFESSIONAL SECTION***

plumbing material

Break Up Your Plumbing Material Into Groups of Like Material

We’re not sure who “they” are or why “they” wouldn’t want you to know about them but here are some purchasing tips you can use to save money and aggravation.

Figure out what you need to buy and categorize the material into these basic groups. If you know you’ll be installing copper for water piping and PVC plastic for the waste and vent you’ll have the material take offs to easily send over to the appropriate stores. Please note these are basic groups we can break down into more detailed phases but for now this is adequate.

  • Waste and Vent Piping
  • Water Piping
  • Fixtures/Plumbing Equipment and Trim

plumbing materialThe simple reason for this is some supply stores are better at things than others especially at the wholesaler level. Some supply houses specialize in commercial plumbing material, some supply mostly residential. Some sell more plumbing trim than others, some sell a ton of copper or plastic. This results in better pricing and you can split the order up if it’s big enough. If you are a contractor and you’re in a sizeable metro area it is important to figure out who does what best.

Margins are so tight these days that wholesalers make their money off of the manufacturers rebates at the end of the year. For instance a certain copper piping manufacturer may give a 3% rebate on  copper sales. If you sell 15 Million in copper your rebate check can be significant and thats just one commodity.

It’s All in the Multiplier

Professional Plumbing Supply houses usually price off a manufacturers list price or they produce their own price sheet and give you a certain discount like 56% off of cast iron or 80% off of copper tube. To get to a net price you subtract 56 from 100 and you get 44, move the decimal over two places and you have .44. Multiply .44 by the list price and you’ll get your net pricing.

If a wholesaler makes a discount a bit more complicated and gives you 40% off plus two 5s, they mean just that 40% plus 5% off plus 5% off. Here’s how you figure out that multiplier. Subtract 40 from 100 which leaves you with 60 or .60 then subtract 5 from 100 which leaves you with 95 or .95. and then repeat for the second 5%. So you multiply .6 x .95 x .95 which equals .5415 So if you multiply that by your list price you’ll find your net.

Wholesale Direct Plumbing Products

There is one other purchasing option that is plumbing professional exclusive. We call it a stocking or jobbing store. Wolverine Brass is one such company. They make quite a bit of their own product and they sell direct using no manufacturers reps or wholesalers. They sell brass products, p-traps, angle stops, tailpieces, basket strainers, a small competitive line of faucets, ball valves etc. They also sell a ton of repair parts. The reason we refer to them as jobber or stock shops is that their customer base is dominated by service plumbing companies. These companies put lists together of their most common repair parts and stock those materials. They will also custom etch a company name on certain products like basket strainers or print your name and phone number on a ball valve to add to you advertising campaign.

We hope this help you in your quest for all things plumbing. As always this article is open to comments. We will answer any questions you have and clarify anything you find isn’t clear enough.

3 comments

  1. most supply houses purchase through a buying group. In these buying groups they get massive discounts based on purchase size. If plumbers teamed up to purchase under one PHCC group or by “” pick the group, there could be massive savings on the plumbers end. The thought would be to have one name to purchase under and on the PO have the company and job name, then figure some money in for having an excel or Data Analyst work with your accountants to finalize material purchases at the end of the year. This would take the power away from the supply houses – Kind of like taking the middle managers out of a large corporation.

    Plumbers – Supply houses are banking on the fact that you are simple minded and they are exploiting this. Take a look into the house you are dealing with. Some of these companies are your competition. Take for example company XYZ – They are owned buy person A, who works closely with person B. Person A and B share in profit, and Person B who is in the trade gets material at the same price as person A due to their relationship. This makes competing with you easy because their material cost is significantly less than your. And because they are beating you on jobs they continue to grow and attract more workers.

    Additionally, If you look at fittings at supply houses, they are typically making 30% Gross Profit. In addition to the rebates at the end of the year – which can be in the single or double digits. Try calling a purchasing group and see if they will give you information. Another thing to consider is these long standing houses are strong because they all are working together exchanging ideas, while you as a plumber work alone and depend on the supply house from time to time for help on a job.

    I’m not telling you what to do. And if what you are doing is working great. When is the last time you got a lead from a supply house? They want those leads to go to their B person or the person that they are supplying material to a wholesale or cost prices, so they will stick with them.

    The purpose for this comment is to provide information to plumbers who don’t know the whole story about supply houses.

    It bothers me to see your hard labor exploited by people with deep pockets. Many of the large plumbing and mechanical outfits try hard not to purchase from supply houses, most likely knowing the game from people they have hired. Where possible large businesses will try and go direct to the manufacturer to cut out profit sharing, and funding of the competition.

  2. Fitting Gross Profit Revision – Black Malleable, Copper, PVC, and Press fittings are huge. If not the largest money maker for supply houses. Mark ups on these small items can be in the 80% gross profit range.

    Also, plumbers have separate website login. Ever wonder why that is? So that the price you are given at the store is the same price you are charged online. Then the supply house appears as they are giving you a great deal. Here’s another thing about the “house” in the game of poker the “house” always wins and it is set up that way. Companies are typically put into a system and ranked 1 to ….pick a number it doesn’t matter, different numbers have different meanings. And in this example let’s say a home owner who comes in off the street to buy a part or faucet is rated a 1, they are paying full mark up on that item. Say you come in and your new – you may be getting the same number as the home owner on a specialty item, and for your “big ticket” they may look like they are at cost. However, that is not across the board. See because you have a personalized account as the different materials you buy change – so do the profits for the house. And as the manager how this all works – sit down have lunch and really go over what margins you are paying – If they really are your friend wouldn’t they be open to speaking with you about numbers?

    In addition, what about when you have a multiplier established? What happens then? Say you make a mistake or the house makes a mistake. Do they eat it or make it up on you in a delivery? Most likely the later.

    How do supply houses pay fro these large trips give -aways, food, and outings? It has to come from your pocket or one of the guys standing next to you.

    And I get that supply houses are not an all around bad thing. There is sometimes a need for someone to research, acquire, find something you don’t have time for – Would you benefit from having a “contracted firm” paid on an hourly rate to look into this – or take your chances that the Hourly paid guy at the house will serve your and your customers best interest?

    There are always opportunities for improvement. And if what you are doing is working great – stick with it. If there is something in here that will help you, your company, and family – great.

    It’s important that the people doing the work are compensated appropriately.

    1. Hello John Doe,

      I sincerely wish you didn’t sign this anonymously. I do understand why though. The information you provided here is obviously insider info so you don’t want your name in the open. Still I wish you would reach out so we can chat a bit. Now having said that, very early on in my career in the plumbing industry I started out in purchasing for a very large commercial plumbing contractor. Suffice to say that this contractor helped build the skyscrapers that still dominate the Chicago Skyline. During that time we never used a separate buying a group for our material. However, we did buy from specific supply houses and had special buying agreements that no one really knew about. Like we would order truckloads of cast iron or copper and the supply house would store is for us to be used at a later date. Sometimes those prices would come off of sheets that were years old and we would have a discount of 40% and 10 5%. So although it wasn’t a buying group it was a deal made with a local supplier and consummated by the manufacturers. I’d love to hear more.

      Sean K.

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