Explain/justify builders discount?

Sausage dog

In the middle of a renovation of our home with a builder as main contractor. Can anyone explain "builders discount" which is added on for PC items which we have chosen. Only input from builder in regard to these items is collecting them from the supplier & paying for them. Delivery costs by supplier would not be even half of the cost being quoted so I'm at a loss as to how or why the builder can charge us? Anyone more knowledgeable like to explain it or is it another rip off? Thanks.

wirehairmax

Time, overheads, travel, profit, time, time, and more time

Calvin001

Sausage dog wrote: »

Only input from builder in regard to these items is collecting them from the supplier & paying for them. Delivery costs by supplier would not be even half of the cost being quoted so I'm at a loss as to how or why the builder can charge us?

Assuming the builder is in business or a company, and not a family friend or relative, then they are entitled to be paid for whatever they do.

If you have an issue with the builder looking to be paid a "discount", then pay the supplier direct and arrange all deliveries without any imput to suit the builders programme - and "gift" them free of charge to the project - unless you feel this will be too much hassle, and in that case pay the builder to undertake the hassle.

Markcheese

If your not happy, ask...
The term sounds weird, who's getting or giving the discount?
The other thing would be If your not happy with the "margin" the builders charging to buy, collect and deliver items, arrange it yourself.. But if there's a cock up it's Now your issue, which could include you paying for staff who were on site at x time specifically to fit the thingy you were arranging to have delivered

Sausage dog

Thanks Calvin001, I suppose I'm just annoyed at seeing this cost added on when I could have done as you suggested if I had known in advance. At this stage of the build it can be very frustrating to see a charge we'd never heard of previously & when you see "discount" you think it's in your favour.

Mech1

when a chef cooks your meal do you pay tesco prices for the steak?

secman

MCD is usually added to costs of the various trades on a contract. 1/19 th is the rate, it's the main contractors "fee" for handling , dealing with the sub contractors on the job.

It stands for "Main Contractors Discount"

Calvin001

Sausage dog wrote: »

Thanks Calvin001, I suppose I'm just annoyed at seeing this cost added on when I could have done as you suggested if I had known in advance. At this stage of the build it can be very frustrating to see a charge we'd never heard of previously & when you see "discount" you think it's in your favour.

You would think its in your favour, but then it says "Builders Discount", not "Clients Discount"

Mech1 wrote: »

when a chef cooks your meal do you pay tesco prices for the steak?

I don't understand this comparison?

Builders work in an industry where they need to buy materials, pay wages to a group of direct workers, and costs to a group of sub-contractors, and then charge a price to the clients which is the lowest price out of the 3 or 4 contractors who tendered for the Project.
Imagine if the customer designed their dinner menu, and asked 3 or 4 restaurants to bid their lowest possible price to make the meal, and then expect to get the very best of ingredients and a michelin star chef to cook it.....

Mech1

Calvin001 wrote: »

You would think its in your favour, but then it says "Builders Discount", not "Clients Discount"





I don't understand this comparison?

Builders work in an industry where they need to buy materials, pay wages to a group of direct workers, and costs to a group of sub-contractors, and then charge a price to the clients which is the lowest price out of the 3 or 4 contractors who tendered for the Project.
Imagine if the customer designed their dinner menu, and asked 3 or 4 restaurants to bid their lowest possible price to make the meal, and then expect to get the very best of ingredients and a michelin star chef to cook it.....

Every trade, every business, buys its "materials" at a discount. that is why restaurants, shopkeepers etc can buy at wholesalers and the general public cant.

Builders Merchants also deal with the public so have a Discounting rate set for builders. Same as Motor Factors have for Mechanics.

You dont supply your Tesco steak to the restaurant because you know and expect them to make a profit on the "materials".

Calvin001

Mech1 wrote: »

Every trade, every business, buys its "materials" at a discount. that is why restaurants, shopkeepers etc can buy at wholesalers and the general public cant.

Builders Merchants also deal with the public so have a Discounting rate set for builders. Same as Motor Factors have for Mechanics.

You dont supply your Tesco steak to the restaurant because you know and expect them to make a profit on the "materials".

I agree, but the chef dosen't serve the "tesco" steak in the tesco packaging, in exactly the same way the chef bought it?

The OP's issue is that they selected an item (lets say its a specific floor tile), and all the builder is doing is paying the price (max price is that agreed between the client and the supplier) for those items.

The builder is paid separately to lay the tiles, provide and mix up the grout, etc.

BryanF

Sausage dog wrote: »

In the middle of a renovation of our home with a builder as main contractor. Can anyone explain "builders discount" which is added on for PC items which we have chosen. Only input from builder in regard to these items is collecting them from the supplier & paying for them. Delivery costs by supplier would not be even half of the cost being quoted so I'm at a loss as to how or why the builder can charge us? Anyone more knowledgeable like to explain it or is it another rip off? Thanks.

You dont have to leave Pc sums in the contract

the_pen_turner

its called being in business.
you have all the direct costs like time, deasil, overheads etc
indirect costs like cost of lending money to the customer


what happens if the product breaks . who is responsible.
if the product breaks in the collection period then the builder will have to pay to replace it
if the product breaks in the year afterwards who has to come out and fix or replace it


remember if the customer supplies materials then there is not warranty on those materials from the installer .
many tradesmen wont start over jobs where the customer supplied the materials unless they are 100% to spec

Sausage dog

Interesting to note what you say about the warranty, I wasn't aware of that.