Money saving idea/question for contractors

[bradleyheathhays]

Hey there once again. My daytime job finds me at my buddy's 'cabinet shop' where no actual woodworking is done. We're a cabinet supplier with a little warehouse space to hold contractors' and clients' orders. We can order cabinets either built or flat pack unassembled. Over the last couple years working there I've asked a few contractors how much different the pricing would be if they got their cabinets unassembled instead of assembled...and most of them said they'd save about 50%. 100% of our contractors order them built btw. Building them is crazy easy but everybody opts to pay thousands more to have us put their cabinets together. A wall cabinet takes about 10 min to assemble and an average base about 15 min. We just delivered 20k worth of kitchen and bathroom cabinets to my other buddy's contract built house; it was about 32 cabinets altogether. If we were to have put together these same cabinets it would've taken us about a full day.

So you see where I'm getting to here? Why don't I advertise myself to contractors as the guy who's been building their cabinets for the last two years and see if they're willing to order unassembled, save a ton of money and pay me maybe half of what extra they would've spent? Sounds like a win win huh?

So my question is...what issues aren't I seeing yet with my idea? My contractor buddy who's helping me work on developing this says he doesn't think contractors will want to get into the minutia of adding a different step to the process they've already settled into...building houses the way they do. The way he put it is that contractors want to know one 'cabinet guy' who gets it all done from design to supply to installation. Almost all the contractors we deliver to also use our company's two installers, and my idea would make things a little bumpier for them. I'm sure lots of contractors in my city of 330k population have their own installers but my contractor buddy says that good installers are few and far in between. Of course, all I see is a big chunk of change to be made, for both me and the contractors, and I think they'll be interested in hearing about my idea.


Any thoughts? Thanks as always.

 

[jttheclockman]

I had my kitchen redone as well as my bathroom 2 years ago. I used a contractor that is basically a general contractor and they do all aspects of both interior and exterior work. They handle all aspects of the build including cad drawings, ordering of materials from nuts to bolts, they have contractors that they trust and have worked for them for years. yes they push certain products but they are mainly higher end products. They stand behind all warranties as well as life time warranties on their work . Now I know for fact I could have saved money if I were the general contractor but that means I now have to chase contractors and schedule deliveries and work schedules. I would have to handle inspections and permits and all those little headache things. It is not as easy as many may think. Especially if you are working a full time job too.

But to your scenerio here are some things to think about. There are so many different grades of cabinets, so many options of finishes, so many options of styles, so many options of custom sizing, so many options of configurations that no one size fits all unless you are doing a housing complex or apartments, or even office complex. That is where you can make money because all is cookie cutter. When doing custom work it is definetly not cookie cutters. You must warrenty your work and one bad call can wipe out much of profits. Insurance for workers is a must unless you plan on running a sweat shop. You need room to build cabinets. You need to take care of finishes and not throw them around. The money is not in building them, the money is in the materials so when they say 50% of what? definetly is not 50% of cost of cabinets. Cabinet makers are getting paid for labor to cut, as well as finish the product. That is a huge part of the price as well as materials. Not sure contractors want to add another player in the mix with cabinets. They are the ones the customer is going to complain to if workmanship is shoddy on the cabinets. then the contractors now have to decide who to chase to stand good for product. Dealing with one entity is far easier.

 

[Lew]

I'm going to come at this from a business perspective. The reason that contractors will spend the extra money to have the cabinets built and installed is that it would cost them much more to do it themselves. Contractors on builds are on an extremely tight schedule and getting everything done quickly is money to them. If they have to take a half day to put the cabinets together, that means they may have to push the schedule back by that much or more which keeps them from their next job. The more jobs they can get, the more money they make. Also, they don't want to be the ones to disrupt the schedule on another build to come back and correct mistakes in the cabinet work. They would prefer to call the sub back.

Your main issue is going to be convincing the contractors that the money you're going to save them won't be offset by higher costs for labor for constructing and installing the cabinets as well as the scheduling issues. If you can overcome these obstacles then you have a fighting chance, but you're going to have to come up a very good argument to convince them of what you're saying and overcome any objections they may have.

Best of luck. Hope it works out for you. Business people who come up with new ideas are the backbone of this country.

 

[rixstix]

Agree with John and Lew comments. Here's my experience with recent kitchen cabinets.

We've had kitchen cabinets both ways. Each has it's own place based upon budget and case. I would never use RTA cabinets in my kitchen again. Less visible areas of the house, maybe. In a camp or vacation place, sure. Rental property, sure.

Flat pack or RTA cabinets (in no particular order)

• May come from different shipments or dye lots.
• May come with different hardware, ie: mismatched hinges between Chinese factory runs.
• Heavy and some finishes do not survive shipping and cannot be field repaired.
• Difficult to offload from delivery truck @ jobsite and survive offloading, ie: loaded on truck with forklift and driver only has a pallet jack.
• RTA cabinet sales 'designers' suck at comprehending the desired finished layout and no design flexibility.
• Assembly is relatively straight forward IF you have plenty of floorspace, assemblers who comprehend assembly techniques and verify the assembled unit is not slightly 'racked' before the glue dries.
• There will be slight dimensional differences after assembly.
• Door alignment in a longer run is problematic at best, ie: manhours to get a straight line.

Cabinet shop built

• Built to customer desire, layout and customizations
• Designers have common sense and avoid common layout issues.
• Everything finished so that there are no dye lot issues
• Fits together without hiccup
• All hardware hinges match
• All shelf peg holes line up properly
• Delivered by cabinet shop and are handled accordingly
• Everything fits perfectly the first time & aligned

 

[darrin1200]

As I see what your looking at.
The contractors are buying from, essentially, a supply warehouse. They pay, lets say, $5k for flat pack cabinets and an additional $5k for the cabinets to come, from the warehouse supplier, fully assembled. You are looking to offer to be an intermediary. They order the cabinets for $5k, then you get the cabinets and assemble them for $2.5k. Thus saving them $2.5k.

While this sounds like a good plan, I see two flaws.
1. as mentioned above, the contractor scheduling an extra step in the process, when dealing with multiple jobs, will essentially add an unnecessary risk of delay.
2. Warranty issues. If they order fully assembled from the warehouse, if a cabinet arrives broken, they call the warehouse and it's dealt with. If a cabinet arrives from you broken, then they have to hope you can get it sorted out. Because the warehouse won't ship another cabinet that as far as they are concerned arrived in good condition.

The last part to consider, is the contractor doesn't care so much about the savings. The client is paying whatever it costs regardless. The amount they would be saving is probably very minimal and would not significantly change a bid. And if they are charging full value to the client, and then pocketing the savings by using you, then that is a whole other issue.

While overall, I think it sounds good, but I don't think it is sustainable as a lone business model. If your buddy doesn't mind, I would suggest trying it as a side gig, by making the contractors aware that you are willing to assemble their cabinets at a considerable saving. They might use the available option occasionally, when they need to save their clients some money or assembled cabinets aren't available from the warehouse for some reason. Who knows, it may blossom into a viable business plan.

Just a few thoughts.

 

[maxwell_smart007]

Contractors don't use cheap tools - they pay for the guarantee that that tool will work every time. They pay for convenience.

While you're offering to save them money, you're not saving them time or convenience. I would guess that the trade-off won't be worth it for many. Most would just pass the assembly fees on to the client regardless.

Would you order the cabinets for them? If so, where would you store them? If the client is ordering and then having to arrange for you to come assemble, that might be another liability they might not want.

Would you go with the contractor to the build site and assemble there?
I'd also guess that a lot of contractors wouldn't want to have clients see cabinets being assembled like Ikea furniture. Weekend warriors might be a potential market, though.

 

[jttheclockman]

Contractors don't use cheap tools - they pay for the guarantee that that tool will work every time. They pay for convenience.

While you're offering to save them money, you're not saving them time or convenience. I would guess that the trade-off won't be worth it for many.

Would you order the cabinets for them? If so, where would you store them? If the client is ordering and then having to arrange for you to come assemble, that might be another liability they might not want.

Would you go with the contractor to the build site and assemble there?
I'd also guess that a lot of contractors wouldn't want to have clients see cabinets being assembled like Ikea furniture.

This is sooooooooooo true especially what they pay for them.

 

[wood-of-1kind]

IKEA furniture (kitchen cabinets) gets a bad rap. Dollar for dollar they are well made for their price point. Custom made cabinets are most often overpriced for what you get. My brother recently dropped $50K recently for a modest kitchen cabinets delivered and installed (counter surfaces) were extra. As someone with over 20 years of high end furniture cabinetry experience, I have a good idea of value/good design. The profit margins on kitchen renovation is huge. But we (men) are willing to overpay to keep our sweetie happy with her new kitchen. I think your idea to assemble and save the contractor/customer might generate some good business potential for you. One caveat however, stay away from high end installations and focus more on lower to mid range pricing. Hope that business does well for you.