Ethics of sharing competing supply house prices with each other

[George Stolz]

Two different supply houses have asked me to hand them a bill of materials from the other, to "smack their factory rep with" to get better prices.

Is it really ethical to share Supply House A's numbers with B? Seems kind of wrong, somehow.

[hardworkingstiff]

I will share a number verbally. I will only do this after buying the material from the lowest original bidder.

[BLACK4TRUCK]

Sounds like a bad idea. Much better to put a materials list together and let them bid it out.

Then you can use the best price per item and nobody can talk bad about.. behind your back, of course :grin:

[480sparky]

The price they get from their rep is between them. None of my business. If I can get a better deal at supply house A, then supply house B can 'slap their own rep' themselves.

I ain't getting involved.


Do you ask your builders, "Hey, can you show me the bids of the EC's I'm up against when I bid your jobs?"

[cadpoint]

I would have asked for thier skeu numbers for there price lists! :rolleyes:

[480sparky]

I would have asked for thier skeu numbers for there price lists! :rolleyes:


SKU, not skeu. Stock Keeping Unit.

[PetrosA]

I don't know that I'd leave them any kind of printed material, but... Let's say that supply house A is 1/2 mile from your shop, while supply house B is 15 miles away. SH B is almost 50% cheaper for your preferred brand of recessed lighting than SH A but you primarily use SH A because of location (this happened to me recently). Would you be willing in that case to talk to someone at SH A about their pricing, at least to bring it to their attention?

You wouldn't think that pricing can be that radically different from one SH to another, but I've seen double or more on various occasions ex. $15 vs. $33 for the same single pole ITE/Siemens bolt down. That's ridiculous whether it's the fault of the rep or the guy setting the margin.

[benaround]

Two different supply houses have asked me to hand them a bill of materials from the other, to "smack their factory rep with" to get better prices.

Is it really ethical to share Supply House A's numbers with B? Seems kind of wrong, somehow.

I agree, let them do their own dirty work.

[jrannis]

I let them know if I think I am in the wrong discount column. You can usually see the percentage difference in the numbers.

[SEO]

The price they get from their rep is between them. None of my business. If I can get a better deal at supply house A, then supply house B can 'slap their own rep' themselves.

I ain't getting involved.


Do you ask your builders, "Hey, can you show me the bids of the EC's I'm up against when I bid your jobs?"

All very good points 480sparky I agree.

[charlietuna]

Suppliers and reps are sooo crooked any price list would really mean nothing! "There is no honor amoung thieves" ! I never realized how many ways people could find to screw their customers until i saw how suppliers operate.

[petersonra]

This is a game supply houses play. The thing is, it is not a game being played against other supply houses. it is a game they are playing on you. they want you to think that getting the best deals is some super secret thing. Its not.

Electrical supply houses have different prices for just about everyone. I have seen them charge everything from 15% of list all the way up to list price for the same item to different customers. I have had projects where two different P.O.s with the same part on it got charged two different prices.

I don't see anything wrong with some hints but don't let them use you.

If you have enough volume to make it worthwhile, sit down with your salesman and ask him what it will take to get their best prices on everything you need as a whole, over a long period of time. They can be surprisingly honest about that. Don't be surprised if you pay a little extra for some items to get the best overall prices. And don't be surprised if you can get some stuff cheaper at one of the big box places.

Even if you have good pricing you can sometimes get better pricing for specific projects just by telling the guy that you can't get the project without better prices. Manufacturers are often willing to listen to such entreaties, if the size of the project is worth it. In many cases, it does not have to be a super huge project to make it worthwhile to ask.

[petersonra]

Suppliers and reps are sooo crooked any price list would really mean nothing! "There is no honor amoung thieves" ! I never realized how many ways people could find to screw their customers until i saw how suppliers operate.

Its more like how many ways customers find to screw themselves. Its amazing how many customers will pay 25-50% extra for electrical supplies to get "free" coffee and donuts at the supply house.

[dduffee260]

Suppliers and reps are sooo crooked any price list would really mean nothing! "There is no honor amoung thieves" ! I never realized how many ways people could find to screw their customers until i saw how suppliers operate.

Ditto on that Charlie. You have to watch vendors and insurance companies very closely. If you purchase over $300,000 a year in electrical materials from supply houses it is almost worth the expense to have a person go over the invoices and quotes to see where you were overhcarged. At least a part time person for sure.

Our largest problems no doubt are lighting and switchgear quotes. They may quote the stuff on bid day at say $87,000 but when you add all the total invoices up at the completion of the project they can be from $87,000 to $100,000 or more. Trick is you have to find where you were overcharged because of the way the project was billed out. One way is to keep a running tally on what has been invoiced and when it hits the quote amount flag it. Then basically every charge that comes in after that flag amount was hit is an overcharge. It is best to find it sooner than later.

I don't show any supply houses the other ones numbers. Other contactors do it for them I guess because they usually know where they were the next day. One trick they play is to " forget" to put fuses in disconnects, include lamps and other things. This way they look lower at first but when you build the job when you add in the fuses or lamps they are higher.

We use several supply houses. I an friendly to all of them but not friends with any of them. All I want is good materials at a fair price.

[ohm]

Its more like how many ways customers find to screw themselves. Its amazing how many customers will pay 25-50% extra for electrical supplies to get "free" coffee and donuts at the supply house.

True. And the individual foremen or trucks are mostly to blame.

We noticed trucks driving 20 miles and buying "token" items throughout the day to be near their best restaurant for lunch and coffee breaks.

PS they are no longer with us.

[active1]

I seen that happen a long time ago at a place I worked. The EC had a salesman come from a different supplier. They told the EC how they wanted their business and can get them much better prices. The supplier asked to only look at the other suppliers invoices. They wanted to look at a few I guess to price out different items. While the salesman did not take or write down the numbers, he called into the office with the items and amounts. Soon after we had a new account set up. The prices were exactly the same or a few pennies below.

IMO what happened is the new supplier wanted to see how much the EC was paying so they could match it, or be just lower. It would have been much better to let the suppliers keep guessing how much they should charge. Suppliers have no reason to ask for this information except to see how much your willing to pay.

Of course if you wanted to play the game - scan some incoices, cut & past new prices (maybe 15% less), the fax it to the other supplier, tell em you want cheaper.

[DAWGS]

My suppliers will generally keep up with my bids and ask me about the jobs. If they didnt win the job I will tell them they were a certain percentage off. I dont give them exact numbers. They seem to appreciate it.

[charlietuna]

Suppliers and reps are in bed with each other on many jobs-i have caught them fixing prices many times--just got down to which one worked the best with me, and i favored him, but the word "TRUST" never entered my mind. I once had them change a price on Square D equipment from $63,500. to $3,600. in a blink of an eye! It is the contractor's job to keep them honest--like we have time for that??? And when i catch them, just go elsewhere for a few months(even though it cost me money)--they get the picture after a while. Now i have always worked "with" my suppliers on trade problems and material problems, but it made little difference in our relationship.

[hardworkingstiff]

Think about how you want the GC to treat you after a bid. I would like to know what the low bid was. It's the same with the supply houses. They want to know how much they were higher than the low bid.

[C3PO]

Two different supply houses have asked me to hand them a bill of materials from the other, to "smack their factory rep with" to get better prices.

Is it really ethical to share Supply House A's numbers with B? Seems kind of wrong, somehow.

Is it ethical? Not really, but it happens each and every day. Not just in our industry but in everything, that is what makes the world go round. It all is about who you know and how much money you have.

[ITO]

Two different supply houses have asked me to hand them a bill of materials from the other, to "smack their factory rep with" to get better prices.

Is it really ethical to share Supply House A's numbers with B? Seems kind of wrong, somehow.

If you do it and "A" finds out, you may not get "A"s best price ever again and if "B" was high you were not getting their best price to begin with. If you want good quotes long before bid time, don't play games with their numbers.

[khixxx]

Just say this line "I'm getting quotes from multiple supply housing, and I want you to know, I'm pulling for ya ;) "

[emahler]

i'll give them pricing on commodity items after they quote and we place our order....not to get them to drop their pricing from their quote, but to give them an idea what the problems are...

but we are talking commodity items (12/2 MC, 3/4" EMT fittings, EMT, etc)...not switch gear, lighting, etc....

is it right? i don't know...but my salesmen know that I rarely will give them a phantom quote that is 10-15% less than their quote:D

[Rewire]

I have a "main" supply house I deal with they get the lions share of my business if I find product at a cheaper price I tell them so they have the chance to match it.

[PetrosA]

Maybe I misunderstood. In my previous post I was thinking about regular prices, not bid quotes.

As far as the ethics of it goes, I see no problems whatsoever. Your ultimate loyalty should be to your business and then your customers, not some supply house staff - they're just the middlemen. Fighting for the lowest price is a no-holds barred game. On the other hand, there are alliances to be taken into account... :)

[bradleyelectric]

Its more like how many ways customers find to screw themselves. Its amazing how many customers will pay 25-50% extra for electrical supplies to get "free" coffee and donuts at the supply house.

If your going to talk about me like that, at least do it on a thread I'm not reading!!

[Doug S.]

Its more like how many ways customers find to screw themselves. Its amazing how many customers will pay 25-50% extra for electrical supplies to get "free" coffee and donuts at the supply house.

Hmmm Donuts

[LarryFine]

I just recently had to price and buy a certain piece of equipment. The supply house that usually gives me the best price quoted me $950 including shipping, after checking with his rep.

Another supplier, where I know the guy I deal with there, quoted about $1250. I told him my other quote, he called the (same) rep, and told me his cost was still higher than my quote.

Obviously, not all suppliers pay the same thing for their gear, just like us. These days, I'm forced to be more loyal to my bottom line than to the suppliers who serve coffee and donuts.

[LarryFine]

Hmmm DonutsCalm down, Homer!

Added:
http://www.wearyourbeer.com/images/Simpsons_Homer_Donuts_Shirt.jpg

[kbsparky]

Price differences on everyday in stock items can vary widely from one supplier to the other.

Recently, we bought some of those underground junction boxes, the type that look like an inverted flower pot, with removable green cover that is installed even with the grass.

We had bought 2 of them from one supplier for about $17 each. During the job, it was determined that we needed an additional one. We went to the nearest supplier (a competitor) and bought one off the self. When the bill came, it was priced out at $42!

Needless to say, we will never buy that item from them again.

OTOH, the place that wanted $42 for the underground splice box has the best deal on other in-stock items. Such as those Arlington meter box mounting blocks, or fluorescent ballasts.

Unless you get quotes in advance you can never tell who has the best price on what. It's also important to remember that no one supplier will have the best deal on everything.

That's why we maintain open accounts at all the local suppliers.

[Rewire]

Price differences on everyday in stock items can vary widely from one supplier to the other.

Recently, we bought some of those underground junction boxes, the type that look like an inverted flower pot, with removable green cover that is installed even with the grass.

We had bought 2 of them from one supplier for about $17 each. During the job, it was determined that we needed an additional one. We went to the nearest supplier (a competitor) and bought one off the self. When the bill came, it was priced out at $42!

Needless to say, we will never buy that item from them again.

OTOH, the place that wanted $42 for the underground splice box has the best deal on other in-stock items. Such as those Arlington meter box mounting blocks, or fluorescent ballasts.

Unless you get quotes in advance you can never tell who has the best price on what. It's also important to remember that no one supplier will have the best deal on everything.

That's why we maintain open accounts at all the local suppliers.

Quasi Box? What was stamped on the top of the $17.00 box did it say electric or was it stamped sprinkler?

[petersonra]

Suppliers and reps are in bed with each other on many jobs-i have caught them fixing prices many times--just got down to which one worked the best with me, and i favored him, but the word "TRUST" never entered my mind. I once had them change a price on Square D equipment from $63,500. to $3,600. in a blink of an eye! It is the contractor's job to keep them honest--like we have time for that??? And when i catch them, just go elsewhere for a few months(even though it cost me money)--they get the picture after a while. Now i have always worked "with" my suppliers on trade problems and material problems, but it made little difference in our relationship.
The place I used to work we used a lot of MCCs. Mostly AB because they were the lowest priced units. I got to where I could guess fairly accurately what the AB price was going to come back as but now and then we would get a shocker.

I would call the AB guy (there actually was an AB guy then) and he would agree the price was out of line over the phone and knock it back to something close to what was expected. Most often this was at least 50%. It happened enough that I figured it was part of the game.

Ironically, a guy I ran across later on, had similar experiences with Square D on their MCCs.

A lot of times pricing is related to a decision by a manufacturer that they want the business from either a particular entity or market segment. AB wanted us and Square D wanted the other guy so they made the price attractive enough.

On some things you can do well pricing wise by ordering in chunks the manufacturer wants to sell in. A lot of companies do not want to do it this way because they want to only buy what they need for a project, but sometimes the price difference is so substantial it is worth buying more than you really need. If you buy 10% extra and get it for 20% less, it is a no brainer.

[dduffee260]

check this out. About 4 months ago we priced out 5000 Arlington 38AST MC Connectors. One price from a local supply house the other from Sunstar Lighting. They were both the exact same price down to the penny. Somewhere around $2200 if I remember right. Who woulda thought?

[jaylectricity]

If you do that for them, maybe they should let you shop from their distributors. Why pay the middleman?

[kbsparky]

Quasi Box? What was stamped on the top of the $17.00 box did it say electric or was it stamped sprinkler?You could either get one stamped "electric" or blank. Same price, either way. They didn't carry any with "Sprinkler" on `em.

[danickstr]

For one thing, they don't know what price point you get at the other house, although I guess they could figure you get the best pricing if you are a regular.

Second, I would also guess that this is a way for them to see if they are "taking too much off" the top, and who knows, they may even have a deal with the other guy, and need to check up on it, although that is illegal.

But checking to see if they can get away with charging you a couple percent more would be my take on it. Why help them do that?

[LJSMITH1]

This is exactly why MANY manufacturers are forced to manufacture overseas. Constant downward pricing. As a result, much of the product quality gets worse and worse.

Nowadays its all about price, and the people buying typically don't care about quality and consistency. Since their customers keep purchasing what they stock, I guess that most shouldn't bitch and moan when they work with sub-quality, offshore materials....:rolleyes: The behavior is self-perpetuating.

[weressl]

Two different supply houses have asked me to hand them a bill of materials from the other, to "smack their factory rep with" to get better prices.

Is it really ethical to share Supply House A's numbers with B? Seems kind of wrong, somehow.


Only public works are required to have price disclosure. Any other pricing can be considered confidential matter. Sarbanes-Oxley had tightened up on this.

Would you want anybody know what your pricing structure is? It discloses to your competitior whare you're weka and where you're strong.