Roofing companies have a lot to consider when it comes to purchasing roofing materials for their projects. One important factor to consider is whether to buy materials in bulk or on a project-by-project basis. There are several benefits to buying roofing materials in bulk, which we will explore in this article.
First, let's define what we mean by "buying in bulk." In the context of roofing materials, this typically refers to purchasing a large quantity of a particular product at one time, rather than buying smaller quantities as needed for each project. This could mean buying multiple pallets of shingles or a large volume of coil nails, underlayment, ice and water shield, or Bullet Boot pipe boots.
Purchasing roofing materials in bulk can be a beneficial practice for your roofing company for a variety of reasons. Here are some key points for your roofing company to consider when deciding whether to buy in bulk, or not:
- Improved quality assurance: When ordering materials on a per roof basis, your project could be delayed if your distributor sends you a dented vent or a bent flashing. Ordering in bulk and keeping materials at your warehouse allows you to keep a closer eye on the condition of the roofing materials before they are delivered to your customer’s roof project location.
- Reduced risk of material shortages: Buying roofing materials in bulk can also help to reduce the risk of material shortages. If you are working on a large project and need a large quantity of a particular roofing material, it can be difficult to predict how much your supplier actually has on hand. By buying materials in bulk, you can ensure that you have a sufficient supply on hand to complete the projects without having to worry about running out of materials.
- Improved cash flow: Buying roofing materials in bulk can also help to improve your roofing company's cash flow. When you purchase materials in large quantities, you expect to receive a much favorable price per unit purchased. This allows your roofing company to net a higher profit margin per roofing project. Higher profit margin is the main benefit of buying roofing materials in bulk. When you purchase a large quantity of a product, you are often able to negotiate a better price. This is due to the economies of scale – the roofing materials distributor is able to reduce our costs when we sell and ship a large volume of coil nails or any other roofing product, and we pass the savings on to you. Additionally, buying in bulk means you are not paying for shipping and handling.
- Storing requires less space than you think: Most products come in pallets measuring 40 inches x 40 inches. For added support, those pallets sometimes come on top of a pallet measuring 40 inches x 47 inches. There are companies that sell large shelves that can make better use of your space. The warehouse racks allow you to stack high without the pallets touching or transferring their weight onto materials stored below them.
- Size of orders are smaller than you think: Buying in bulk does not mean you are required to buy truck loads of roofing materials. For coil nails, your order qualifies as a bulk order with a 48 box purchase. Hand driven nails qualify as a bulk order with a 26 box purchase. If your roofing company installs 2 roofs a week (average size roof being 30 squares), the 48 boxes of coil nails will last you 2 to 2 1/2 months.
- Become less affected by price increases: The past several years distributors raised prices several times during the year. The price increases were so substantial that a few products even doubled in price. Buying in bulk helps keep your gross profit margins stable and more predictable over time. As the saying goes, if you can measure it, you can make decisions about it.
- Improved supplier relationships: Buying roofing materials in bulk can also help to improve your relationships with your distributor. When you purchase a large quantity of materials from a supplier, they may be more likely to offer you additional support or assistance when you need it. This can be important for building long-term relationships with your customers and ensuring that you get more bang for your buck.
- Buy some materials, don't buy others: Roofing materials like nails, cap nails, coil nails, Bullet Boots, Vents are not perishable items, which means they won’t go bad. Items like caulking and paint do have expiration dates so don’t overstock on those items. When storing roofing materials, make sure you stack them properly. Manufacturers have strict guidelines that prevent from stacking too high because it voids warranties.
- Predictability: Buying roofing materials in bulk can also help with inventory management. When you have a large quantity of a particular product in stock, you can more easily track your usage and determine when it's time to reorder. This can help you avoid running out of materials and keep your projects on track.
- Enhanced sustainability: Buying roofing materials in bulk can also help to enhance your company's sustainability efforts. When you purchase materials in large quantities, you can help to reduce the carbon footprint associated with transportation and logistics. This can be important for companies that are looking to minimize their environmental impact and demonstrate their commitment to sustainability.
Of course, there are also some potential drawbacks to buying roofing materials in bulk. One concern is the upfront cost. While you may save money in the long run by purchasing a large quantity of a product, you may need to front a larger sum of money, initially. Buying 104 boxes of coil roofing nails at $28.95 each is a total of $3010.80 and you receive free shipping. Buying 32 units of 1 1/2 inch Bullet Boots costs $447.68. This can be a challenge for tiny roofing companies or those with extremely limited working capital. The upfront expense is definitely worth it because the current average price of Coil Roofing Nails across the United States is $55 per box. That means that for every 104 boxes you buy, you're making an additional $2800 in profits by not paying the increased cost from your current business model. Click here to watch a YouTube Short of Cody from Integris Roofing stating his experience.
Most common mistake roofing companies make is waiting too long before buying roofing materials in bulk. Year 3 is usually when you notice your roofing business has plateaued and you start looking for ways to cut costs.
Despite these potential drawbacks, buying roofing materials in bulk is still be the best option for most roofing companies. The key is to carefully consider your specific needs and circumstances, and weigh the pros and cons. If you have a large volume of work and can negotiate a good price with a supplier, buying in bulk may make sense for your business. On the other hand, if you have a more varied and sporatic (inconsistent) workload because your roofing company model resembles more of a part-time model, it may be more practical to purchase materials on a project-by-project basis.
Overall, the benefits outweigh the disadvantages of buying roofing materials in bulk for roofing companies. From cost savings and increased efficiency to improved supplier relationships and enhanced sustainability, bulk purchasing can be a valuable practice for any roofing company. By carefully considering these factors and weighing the potential benefits against the potential drawbacks, roofing companies can make informed decisions about whether bulk purchasing is the right choice for their business.