If you buy elsewhere, you'll probably still have to add his percentage. That's how he earns a living. Cost-plus means whatever it costs plus a percentage for the contractor. Buying it yourself doesn't exclude it from the cost of the project (unless that's specifically stated in your contract).

Otherwise, you could buy ALL of the materials and then the contractor would install it for absolutely free since there is no cost!

Our contractor was happy to let us buy things at better prices as long as we took full responsibility for having the material on site when he needed it and we made up the difference in his profit margin, giving him the same money he would have gotten if we had used his supplier even though we paid a lot less. It ended up as a win-win, we saved several thousand dollars, particularly on plumbing and electrical fixtures, which we ended up spending on other upgrades with the contractor. We ended up with a nicer product and he ended up with more money. Not sure what's not to like about that arrangement unless there are under the table kickbacks that change the math.

I never found the big box stores to be a useful or particularly cheap source of anything. Best deals were found online, on Craigslist, or at the Habitat ReStore.

We did not attempt to do anything like this with everyday supplies like lumber as that would have been a logistical nightmare.

As far as the quality and warranty, if the items have the EXACT same model numbers, then they are the same items. Sometimes big box stores pressure the manufacturers into lowering their prices so the manufacturer will use inferior parts but then they have to change the model number even if they still call it the same thing (and it might look the same).

Regarding warranty, maybe the contractor means HIS warranty. If something breaks or whatever and he bought it from his supplier then he can probably quickly get a replacement and install it. If you bought it from overseas and got it shipped to you, he's not going to deal with the Chinese reseller and shipping the old unit back and waiting for the new unit to arrive. That's on you. And if waiting on your materials delays other aspects of the project, that's costing him time and therefore money.

"We ended up with a nicer product and he ended up with more money"

Should read:

We ended up with a nicer product with no warranty and he ended up with more money and doesn't have to worry about replacing defective product. I LOVE it when that happens.....

Thanks for the replies. Honestly, it is just something I am trying to understand, not trying to take money out from anyone or be cheap. It has only come up with this as it is something I can easily see the price of online and order myself; I would never try to do it with actual build materials. This is our first time working with a contractor so just learning as we go, and sometimes that involves asking questions, hopefully I have not offended any of you contractors :)

I just don't understand the supplier giving me a retail price and a contractor price to show the savings of going through them but I can buy for the contractor price from any retailer I have found.

In the end, I did decide to go through the supplier just to avoid any delay of parts I order showing up at the wrong time or in bad condition and to keep the project on schedule.

My first thought is that if anything is defective, like bad wood for flooring or bad tiles, possibly defective fixtures, tub finish came out bad, toilets not working, defective cabinets, damaged or badly milled doors, the contractor wont warranty it because you supplied them. Plus you will still pay extra with the cost-plus contract. And you will have to have the product ready when he needs it, there are a lot of materials and that is extra stress to figure it all out. Basically you might save some money but your products wont be covered by the contractor. Not worth it IMO. You should of course be allowed to choose what you want though, via the contractor.

Sounds like some people here feel threatened by an owner buying what they like, from where they like.

IMO, this supplier / contractor discount needs to fade into the sunset. It's a remnant from years and years ago. Today there are so many products that suppliers cannot carry them all. Or the supplier carries that same old / same old. Even the 'high end' places have no stock - but they can order it - well duh I can order it too on the internet and get a lower price with no sales tax. And if your purchase is over several hundred dollars, most places throw in free shipping.

As for warranty, the manufacturer warrants the item. Who knows if the contractor / plumber / etc will be in business 3 years from now?

And... Start a file - be sure that you get receipts for the purchase of the products - with your name on them, and make sure the trades people don't throw away the installation instructions, and get the model number(s) from the boxes. Many manufacturers will replace parts for free - but they require a receipt as proof of purchase.

The plumber on our build would not warranty anything not bought through the plumbing supply store. Do you want to encourage 'payback' from your subs?

I think an owner should get the products they want, but when it comes to defects, installation, and mess-ups, the contractor warranty can be very important. I personally would get the doors, cabinets, vanities, countertops, and flooring through the contractor at least.

@Vith: "but when it comes to installation and mess-ups" The products should be installed as to the manufacturers specifications. If the installation is 'messed up' then the contractor has not hired the correct trades people.

The most notorious for this seems to be plumbers who refuse to read instructions.

It's another story if the customer wants to buy 'cheap sh*t'.

That is fine and dandy, he didn't hire the right people but it becomes a giant mess when you have to deal with trying to get the product that you purchased paid for by him because they messed up. Or if the product you bought has defects and they don't notice or care, he wont be willing to redo it on his dime. If he buys the product and installs it, it is completely his problem.

If something goes wrong with the product, a lot of the time the manufacturer is going to say it's an installation problem and the installer is going to say it's a manufacturing problem. It can be a really big headache to prove which one is telling the truth and actually get it sorted out. That headache is yours to deal with.

If the installer also bought the product, then you can just say "Get it fixed" and you don't have to worry if it's the installer or the manufacturer that pays for it. It will be fixed and the installer can battle it out with the manufacturer if they want to. You don't have to do anything.

If nothing goes wrong, then either situation is fine.

So the question is how much of a savings is it worth to take the risk. And also, is the contractor even interested in dealing with a customer that supplies their own materials. If they don't allow it, then you have to either accept that or find someone else.

@greg: "If the installer also bought the product, then you can just say "Get it fixed" and you don't have to worry if it's the installer or the manufacturer that pays for it."

A warranty is nothing more than a contract. How enforceable is the contract? What is the exact wording. So many ways to weasel out.

"It will be fixed and the installer" You are saying it will be fixed - that's just your assumption. Maybe it's two years later?

If I'm remodeling a home I don't want the plumber to tell me I have to buy a Delta, when I like the Grohe better. And how much is his warranty worth: If you have to pay $200 more by going through his supplier (which is just a legal form of kickback) is that warranty really worth it?

Same with tile or flooring or any big item. Suppliers, manufacturers, installers, contractors are going to fight like hell to make any substantive repairs. They are going to try and patch it up.

All good things to consider when picking a contractor.

Jessica-

I won't address the issue of the warranty or what is necessary if repair/replacement is needed, but I will tell you your contractor is blowing smoke about the quality. He's worried about losing his percentage on the stuff you buy. We just finished a fairly high end remodel and some of the plumbing fixtures were not available locally, or at least at good prices. My contractor was fine with me ordering wherever I wanted or having him order for me, but he would have to add 9% State sales tax. We both got prices and compared, and we were very close...turns out we were both shopping at the same, reliable online vendor (Build.com) which had free shipping and no sales tax. So I ended up doing all the ordering. He guaranteed his work regardless of who bought the items, and he only insisted that I use name brands he thought were reliable.

Kinda like paying $10 for popcorn at the movies. Telluwhat, damn good kernels at that theater, quality service, seating, audio and all. A real quality moviegoing experience at this theater totally forgot the cost of the popcorn.

Years ago my wife and I vacationed in Honduras and took a chartered fishing trip. The resort restaurant offered to cook our catch. I don't know how familiar folks here are with chartered fish, but they probably cost $80.00 per pound or more.

I am amazed that folks who would never show up at a restaurant with their own raw steak have no trouble asking to provide their contractor with his raw materials because they can get it cheaper.

What am I missing here?

The restaurant analogy just doesn't work, you have used it repeatedly and it has never been a very compelling analogy. Hiring a chef to cater your party or as caterer are both much more comparable to hiring a builder or contractor, but the analogy breaks down because both are often asked to use customer supplied food and they do.

There is a legitimate debate about end comsumer value for trade relationships. My father's company does several million in orders from his favored plumbing supply house. The relationship that developed was (my father retired) sacrosanct to him. That relationship made his life easier which translated to value passed to customers. However, if the price isn't also competitive the economic benefit is largely erased. You can't blame customers for questioning the seemingly intangible benefits of trade relationships that cost them thousands of extra dollars.

Edit: I believe the value is there but contractors are often uncomfortable explaining it and revert to some spiel about quality.

our contract was different in that we were responsible for our light fixtures, towel bars, etc. we bought our plumbing fixtures through the contractor at a plumbing supply shop. for me, there was a big difference in the quality of the items through the supply shop vs. what I could have purchased at a big box store. the items are heavier and seem to be better made.

we bought our plumbing fixtures through the contractor at a plumbing supply shop. for me, there was a big difference in the quality of the items through the supply shop vs. what I could have purchased at a big box store

The idea that there is a quality difference between the big box stores and supply shops is about 75% misunderstanding and 25% wrong. Any special order item from a big box store will be the exact same item that any supply shop has. In fact, any item that has the same part number will be the exact same item. While you can choose to believe anything you want, the simple truth of it is, most big box store items are of equal quality. I am going to spend the rest of the post explaining in great detail why.

So to understand why today most items are of equal quality, you have to understand a bit about the process, the history and a little bit about cost accounting.

The process: The big box stores look at the available products from a manufacturer and decide which items it wants to stock and display. The big box stores then make guaranteed offers on those or similar models, if you can sell it for X we will guarantee Y orders. The manufacturer can then accept or reject. Along with these products that the big box stores make offers on are the products that the manufacturer wants to push out, often a deal gets cut for both, if you can provide product A for X price we will buy product B also. The thing that drives these deals is typically the time the product has been made, the longer the product has been made the cheaper it is to make more.

The history: Manufacturers originally made the price goals set by the big box stores by using cheaper parts to make the items. Some still do this but many do not because....

Cost accounting and economics: Many of the savings that were supposed to materialize from using cheaper parts never really did. The reason is largely demonstrated from Activity Based Costing, many manufacturing costs are not driven by the costs of the products but are driven by things like change over costs (the costs of stopping making one product, getting all of that product's parts off the assembly line and loading the new parts for the new product), warehousing costs, tracking costs, and customer relations costs. In short, the savings from cheaper parts is largely eaten up by the trouble of making and stocking multiple parts. Any left over savings are usually eaten up by the liberal return policies of the big box stores.

The conclusion: Today most of the products seen on the shelves of the big box store are substantially the same quality and special order products will be the same quality.

"The restaurant analogy just doesn't work, you have used it repeatedly and it has never been a very compelling analogy"

what about the movie analogy?

jennifw-

I agree that there is a fair amount of middling or lower quality stuff at the big box stores. However, I also agree with bry911: if you find exactly the same item at the plumbing distributor as at the big box store they are the same. And, of course, if you order online from someone reputable, like build.com, you are going to get the quality you expect from the known brands. In the past year I have ordered all the fixtures and hardware I needed for two bathroom remodels online at substantial savings, and did not return a single item or have any issue with quality.

I have also found that, if you buy products manufactured by companies such as Moen, Newport Brass, etc., they will provide replacement parts or even replace the whole item if it fails in any way while you own that home. I just got a high end faucet replaced by Moen after 15 years, and all they needed from me was a photo of the faucet and a mailing address. They don't ask you where you bought it.

I'll ask another way. Do you want to antagonize your plumber -- or any sub? Seems to me you can do it his way or find another sub. (Why would your GC agree to that?) As just one individual building one house with one contractor, you may be paying the piper, but you can't call the tune.

My view is that if you have to be afraid of antagonizing your plumber because you want to control your costs, you've either chosen the wrong one or you're not really in charge. My money, my project.

If the GC will be marking up the Cost of the Work, he might be willing to let you use his discount when you buy from his supplier. The difficulty might come when you want to buy something that is normally supplied by a subcontractor (like a plumber or electrician) since they might not have a cost plus contract with the GC and might rely on the markup in addition to their labor.

However, I have worked for many years with a contractor who allows the owner to buy many things from his suppliers at his discount and doesn't include it in the Cost of the Work. I suspect he makes up for it by doing all of the carpentry work and keeping his overhead low.

"My view is that if you have to be afraid of antagonizing your plumber because you want to control your costs, you've either chosen the wrong one or you're not really in charge. My money, my project."

You chance to control your costs is right before we ink a deal. After that, a deal is a deal.

It is your money, but your project will be done the way I want or it won't have my name on it.

Joseph-

I agree...to a point. This just illustrates the need for the owner to scrutinize what a contract says before signing. Many I've seen are vague about owner purchases, which can work to one's advantage or disadvantage, depending on your personality and the contractor's disposition. Nothing substitutes for discussing this in advance so neither party is surprised halfway through the project.

I have also found that the big box stores (e.g., Home Depot) can get nearly any readily available home improvement product (with free shipping) if you are willing to special order. And special orders only take about 5-7 days.

However, if you move up to a better quality product than what is stocked in the Big Box store the price may be almost identical to what you will get through your GC's supplier. Home improvement products are a very competitive market and for many retailers there is not enough markup to enable them to give anyone a big discount.

Bruce

1) I absolutely agree with Joseph that anything you do along these lines need to be pre-negotiated and part of the deal.

2) The only way this works id if you make the contractor indifferent to the substitution by insuring that he has (at least) the same amount of money in his pocket at the end of the project and has not had any hassles as a result.

3) Warrantees, as far as I can tell, are a red herring. Aside from on the car I bought new and some things from very high end, classy companies, I've never succeeded in collecting anything on a warranty, and I doubt most other folks have either. Who has the time, energy, and organization to fill out the forms, retain copies, keep the receipts, etc for every light bulb and tube of caulk used on your project? Even then, how much is it worth after you pay the shipping or subtract the depreciation? Has anyone, anywhere ever gotten back their $4 for a tube of "lifetime guarantee" caulk that failed after 20 years? Warranties on the physical equipment in your building are provided by the manufacturer, not the plumber or contractor. If my toilet is defective my practical experience is that no matter where it came from its between me and the store or manufacturer to get it fixed. Since it's unlikely I have the receipt I just get a new one and replace it myself, it's not the plumbers fault that the part is bad, it would be absurd to expect him to to do the labor a second time on his dime. If he installed the piping with leaks, then yes, I would attempt to get him back (but wouldn't hold my breath on that happening).

On my current house it's been two years and I haven't been able to get the electrician back to diagnose a cross-wired circuit (outlets powered by two different breakers), I keep calling and he keeps saying he's coming. It's not a big enough deal to start hiring lawyers over. The AC system the HVAC guys installed never worked. They came back seven times over 18 months, sending the owner's idiot son each time. He'd fool with it, assert it was fixed, and it wasn't Finally I hired a competent tech who found five different leaks in their piping, tightened things up, and now it works fine (all it took was a bottle of soapy water to discover the leaks). I wish I'd saved myself a year and a half of aggravation (and sweating) and never called them back in the first place.

Warrantees are just a marketing tool, and a bad joke if something actually breaks. I'd prefer to do without, and just depend on finding problems before the bill gets paid-- another strong advantage of buying online-- if what you buy comes broken you can dispute the charge with your credit card company, a much more powerful consumer protection than any warranty.

It depends. The warranties that come with some solid surface countertops are no joke. I've witnessed DuPont warrant jobs that were obviously customer abuse.

You chance to control your costs is right before we ink a deal. After that, a deal is a deal. -

This is completely and totally incorrect. Not only is this wrong, in my opinion, it is the entire problem with the construction industry at the moment, too many contractors design their entire business model around keeping customers in the dark by doing something that is tantamount to lying to them.

The entire purpose of a cost plus contract is to allow the customer access to competitive bidding. It is the entire reason that they exist. Really since World War 2 - it is the only reason that they exist and the only reason that they migrated from military to business to homes. If you don't want consumers going out and finding better prices on items, then get off your lazy ass and construct an accurate fixed price bid.

Today builders seem to think that they can pass all the risk to the buyer, they can use a contract designed to allow competitive bidding and then simply lie to or brow beat customers when they attempt to use the contract as it was designed. Which is perfect for contractors, they have no risk of underbidding ever and they still get paid no matter how bad they do.

I am all for contractors denying people the right to competitive bid, simply tell them the bottom line on a fixed price basis. Other than that, stop whining when they do what you were too lazy to in the first place.

Edit: Obviously this is a pet peeve of mine and I sound pretty harsh about it - but I want to clarify, from previous postings I know that Joseph Corlett doesn't actually do business like this. I responded to his post but my rant is really not directed towards him.

If I specify Kohler fixtures for a bath remodel from my local plumbing supply house, and the customer wants to change that and second guess the selections that I chose based on their aesthetic, availability, reliability, and customer service support, then no, that's not going to happen. I'd rather take my design documents and go home and good luck with your import no name knockoffs and ''handyman'' to install them. You're not getting my help to butcher the design. I specified Kohler from the plumbing supply house for a reason.

Sure, if you ask about that American Standard model instead, that can be a option. But not from Bob's Bait and Bargain Basement. NOT gonna happen. And I am not about to spend 2hours searching the internetz searching for $10 off of a towel bar without someone paying for those 2 hours. The one $10 higher comes from someone that I know won't have brackets or screws missing or flaws in the finish. Not being willing to search for "bargains" isn't lazy. it's allocating time resources wisely. Would you rather pay $10 more from my preferred supplier, or $200 more to cover my time spent bargain hunting?

And if someone isn't willing to pay for that availability, reliability, and customer service, then that is someone who nickels and dimes a project to death and isn't worth working with. If $500 means that much to you, then you are underfunded for the project to begin with. Give up that Starbucks latte for a year and buy what needs to be bought from someone trustworthy to supply it.

TANSTAAFL.

bry911:

I have no problem with customers using the contract as it was designed because a deal is a deal.

From my reading, this is not what the OP is attempting to do. She agreed to the contractor's supplier cost plus a percentage and now wants to shop herself and avoid paying the percentage she agreed to pay.

Sophie-

I think you just illustrated why customers and contractors need to be sure they have compatible outlooks. There are plenty of customers who want quality products but don't want to pay an arm and a leg for them, and have no problem doing the searching and the ordering. Now, if a customer is paying you for a design, and then wants to substitute crap, I can understand why that is a problem. However, I've never quite understood why I should pay a contractor much more for the project if I choose a quality $6000 bath tub rather than a quality $1500 one if the install doesn't require anything different.

With my last bathroom remodel, I hired a highly regarded contractor who gave me a detailed, task-by-task bid, with options that were also separately priced. The total bid was fixed price regardless of what I spent on fixtures and tile. I consulted with him along the way about my choices, made a few adjustments based on his years of experience, and went ahead and ordered the items on my own. My contractor was totally fine with it: his view was that his profit should be based on what he charged for his skills, not whether I bought a $10 towel hook or a $300 one. And that's the only type of contractor I'm willing to work with.

@ Sophie

The entire reason that cost plus contracts were born was to remove contractors from quality decisions. For example, when NASA wants to build a rocket, they want to ensure quality rather than that it can be done under budget. This is done by control of the bidding process from all subcontractors. This idea of quality control and it's side effect of cost control was perfect for capital investments by businesses and so shortly after WW2 they stole it. When used well, by parties who understand the ideas, it works well for home construction also.

However, too many contractors want to use it as if it is essentially a fixed price contract without any risk to them. If you want to ensure quality, or protect supply house relationships, then use a fixed price bid. However, if you want to be largely indemnified from any loss by using a cost plus contract then you give up all rights to dictate quality.

There are many far less complimentary words to call someone who takes advantage of the lack of knowledge and experience of their customers. I went with lazy, because I believe the reason most contractors do this is because they simply don't want to go through the effort of producing a fixed price bid, when they can do a serious bid for their money and rough estimates for everything else.

@ Joseph

Nothing in the original post makes me think they agreed at any time to use his recommended supplier. They even call it a recommended supplier rather than a required supplier. Just because they are agree to a standard cost plus (contractor's net cost, plus contractor's set fee) doesn't mean he gets to decide where his costs come from. That is the consumer's purview in a cost plus contract.

Little Suzy Homemaker doesn't know squat about building a house. She doesn't know she needs to (or could) vet every sub and question the size of the nails (or should those be *screws*?). All Suzy can do is vet her GC, best she can. THIS Suzy isn't planning to ever build a house again and feels merely lucky there were so few problems.

What is your point Chisue? Because a homeowner doesn't know any better, it is OK to take advantage of them?

We are not talking about picking screws or nails, we are talking about fixtures, items that were specifically allowanced in the contract so that the owner could pick them. Even choosing between competitive bids between subs doesn't necessarily require a whole lot of knowledge. You get five bids, 1 is really low, 3 are very close and 1 is double any other bid; now you have a frame of reference to ask questions. If your contractor recommends the most expensive or the cheapest even Suzy Homemaker can ask why.

For many, if not most, homeowners these things never present as issues. Their contractor takes the time to explain where savings are possible and reasonable as well as areas that savings are not advisable. If a customer finds the same fixtures for a lower price the contractor will take that bid to the supply house to see if there are options available. We deal mostly with Ferguson, I can't think of a time when they have failed to match prices and as an added benefit they have warned us away from products that had potential problems.

None of these things are being done by the OP's contractor. He is telling them a bold face lie. The same part numbers will be the same quality no matter where you buy it. Period.

Which brings us to vetting of contractors. I maintain that about the only thing you can do is get information about timeliness and communication. The average person is completely unqualified to judge any quality below surface aesthetics. So most recommendations are all but worthless.

back in the day suszie homemaker didnt have the gardenweb of diy homeonwners mis-informing her at tha same clip ill telluwhat

$10 popcorn tastes better than ever

Well we are talking today...not back in the day. Since this discussion would have been mostly irrelevant back in the day as cost plus homebuilding has really only gotten popular the last 30 years or so.

I guess to sum up everything, talk to your contractor. You can still buy things for your project but, buying the items for a little bit cheaper wont make that big if a difference due to the cost-plus contract. His claim that big box products are sub-standard is not true if you buy quality fixtures and are willing to wait for a special order, its just an inconvenience getting materials from you because you might not have them ready when he needs them where he could just get them from the distributor that same day. Also, he is thinking of the little man (which more of us should), do you want to support the 'walmarts' of hardware stores or help out your friendly local folks? I am not trying to be a hypocrite, as I shop at menards and HD all the time but just something to think about.

A little planning and ordering from the right places should prevent any delays. Build.com and Amazon are both excellent at giving firm delivery dates. I had no problems with my recent remodel. I got all items within 2-5 days of ordering, including a bathtub that was shipped from California to Washington State in 3 days using normal (and free) delivery. And I probably saved a couple of thousand dollars in this project by buying online instead of locally.

After reading this I feel lucky that I have inherited the talent of working with my hands. I've remodeled two of our homes - complete gut of bathrooms / kitchens / family rooms / windows / doors. I bought all the bathroom fixtures / toilets / tubs on line. We bought the tile locally.

The internet has changed business. No longer do you have to find a 'supplier' and then have them back order, nor do you have to guess about the cost. It's all there online. The internet cuts out the wholesaler - you buy right from the manufacturer or distributor. An easier and honest way of doing business.

The other week I needed front rotors for my Volvo. I told my mechanic I could get the OEM rotors from RockAuto for $X, should I supply them? He actually met the price.

I have a diverse array of interests and follow several different special interest forums and news sites. I see this everywhere; the world is changing quickly, but not everything moves at the same pace. That difference in the speed of change creates friction.

That is exactly what you're looking at here. Once upon a time, contractor pricing on materials actually WAS a good deal. The available sources were overpriced stuff from a dinky hardware store or a high-end retailer vs. quantity pricing that only contractors could get.

Guess what...contractors didn't change how they do business, but the world changed around them. When "contractor pricing" was invented, your contractor could get a better deal on plywood and 2X4's than you could. Now you can go down to lowes or home despot and get Chinese lumber as cheap or cheaper than contractor pricing from a whole-sale supplier. Quality the same? Not on some things, but yes on others.

For a contractor it is a lot easier to keep doing things the "old way". If a contractor wanted to be bothered with all of the scheduling and interaction with a homeowner that wants to shop around, he could just get his profit in a more direct way. "I need to make $20,000 on your project in order for it to be worth my while...however you want to work the materials is fine with me". It might sound good to you, but to him it sounds like a hassle.

It is likely that eventually contracts will evolve from where they are and have been to something that is more in tune with how the world is now...and by then the world will be different again.

Now you can go down to lowes or home despot and get Chinese lumber as
cheap or cheaper than contractor pricing from a whole-sale supplier.
Quality the same? Not on some things, but yes on others.

And that's a problem, because many homeowners don't know the difference. I was in a big box store years ago where they were selling non grade-stamped lumber; something we would never have used.