Always get 3 quotes
If you are going to build, developer, renovate or re-develop then there is one golden rule that you need to live by:
ALWAYS GET 3 QUOTES…for EVERYTHING!
On one of my current jobs in Coogee, NSW I have saved more than $47,000 in the last month just by refusing to use the first quote and making sure I get 3 quotes.
When you get a trade or supplier to give you a costing for a job or material, you probably don’t understand their industry enough to know whether or not their quote is competitive, fair, or crazy expensive. The only way you can really get an understanding of this is to get experience and do a lot more developments.
But I know that’s not going to help you right now on your current project. But 3 quotes will. Getting 3 quotes is the best way to get immediate experience and a cross reference so you do know what your doing and don’t get the wool pulled over your eyes.
A perfect example and what made me quickly open up a word doc and write this blog today:
I was ordering some modwood for outdoor decking. I need 63 square meters, or 85 lengths of silvergum modwood plus the clips to help install.
Modwood is a composite wood product which contains about 70% recycled plastics and 30% wood. It is more expensive than wood, but can be cheaper and more durable long term as it does not need constant treating and it doesn’t ware as fast.
So back to the pricing and quotes…I called a local supplier that I use a lot, North Shore Timber and got a quote. They are just a stockist, as would be other timber companies – they all get the product from MODWOOD and so you would think they would all have a set price…so I almost didn’t call 2 other places. But 3 quotes has been hardwired into me since I was a teenager and so 3 quotes it had to be!
The price from NorthShore was $9560.
I then called Danias who I have also used before, and they immediately gave me the price of $8198. That’s a 60 second phone call that just saved me $1362! Sweeeet.
And it’s exactly the same product…I called Northshore back to double check we were talking about the same quantities and sure enough we were. They said they would see if they could match and get back to me.
Meantime I called a third supplier, Waynes World of Timber in Botany NSW. They said they could also supply the product next day as with the previous two companies. They couldn’t give me a price on the phone but said that they would call back. 5 minutes later Wayne himself called and said he could supply the same materials for $7729!
So for about 2 minutes of work from me, over a period of 10 minutes I have just saved $1831. Niiiiiice.
Moral of the story? Get three quotes…and don’t think that just because a supplier is cheaper here that they will be cheaper all the time. I did the same call around a couple of weeks ago in regards to vjointed timber and Waynes World wasn’t the cheapest for that.
If you are using a project manager or a builder to get your supplies for you, then implement a purchase order system whereby they have to provide you with three written quotes with a cover sheet purchase order which lists each company and each price. This makes it easy for you to make decisions and to manage your costs. If you lose hold of the reins here, I absolutely 100% guarantee that you are paying more than you need to for supplies and materials.
One more thing…when you call around to all these companies, keep a little directory of all the suppliers so you build up your own contact book.
Okay that’s all from me for now.