Picking items from a material quote

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electrofelon

electrofelon

Senior Member
Location
Cherry Valley NY, Seattle, WA
Occupation
Electrician
If I ask for a material quote from several supply houses, is it unethical or "cheap" to only buy the certain items that each respective house had the best price on rather than buying everything from the house that had to lowest total price? Ive always felt bad about doing that. This would be say around a 10k order. Thanks for the input.
 
electrofelon said:
If I ask for a material quote from several supply houses, is it unethical or "cheap" to only buy the certain items that each respective house had the best price on rather than buying everything from the house that had to lowest total price? Ive always felt bad about doing that. This would be say around a 10k order. Thanks for the input.
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change places. how would you feel if you and another contractor each got shopped,
and you got this part of the job, and had to work next to the other contractor who
got the other part of the job?

if you feel bad about doing it, don't do it.
 
I am not a contractor just an employee but my understanding is doing this sort of thing will save you money in the short term but will cost you money in the long term due the fact the sales people will remember your price shopping and make sure not to let that cost them again.

Basically the same thing happened to me when I was pricing work for the company.

I put a bid in to a retail chain at a per location price based on a large number of stores. Instead I got a small number of stores that where all well out of my area and where losses. I was willing to take those losses combined with the wins but I did not get any of the wins.

I made sure that this did not happen to me again, my pricing went out with a qualification that the pricing was for the entire project not just certain locations.
 
bordrshane said:
Lol, I only shop around when I bid the job wrong. Otherwise, I support our local electrical distributors, and trust they are not there to rip us off.
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Even then, if you have treated your supply houses right, you can probably get them to help you out.
 
electrofelon said:
If I ask for a material quote from several supply houses, is it unethical or "cheap" to only buy the certain items that each respective house had the best price on rather than buying everything from the house that had to lowest total price? Ive always felt bad about doing that. This would be say around a 10k order. Thanks for the input.
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There really is no one answer for this. I have a strong sense of ethics, but there are always circumstances that contradict every "rule". For example, when I do an estimate, I often send out gear, fixtures and misc, quote requests. I make it plain in my request that misc items may be awarded by group, so if I have floor boxes and cable tray and receptacles, I will likely decide on each group as a separate price and award each to the respective lowest. I wouldn't, however do this on an order I just sent out. But, our company, for example, has job codes, so I don't buy wire and conduit on the same purchase order, so, I wouldn't be asking for a single price anyway. Other than looking through two quotes and seeing if there is a "outlier" (one item that was way off) I will basically award to the low person.

I try to live by a couple of rules. First, and I tell my suppliers this. "What I will do for you, I will do to you." I also turn that around that what you will do for me you will do to me. By that I mean that if a person is willing to let you change your price to get a bid, for example, they are very likely to go to another person and see if they can get an even better deal with your number.

The other thing is, I try to only do things that I am willing to look people in the face and tell them. For example, I have a personal rule that if I ask for a fixture price, then, if you are complete and low, it is yours, otherwise I wouldn't ask for a price. Recently I have not been pleased with one supply house's service. So I had to look the salesman in the face and tell him, "I will continue to send you quote requests, but, I may not award a project to you just because you are low. I won't shop the number, I will just pay more." He wasn't pleased. I told him that I had no problem not even asking for numbers and I had no problem if he decided not to quote, but my hope is that the house will get its act together so I don't want to cut all ties. It isn't easy, but I would rather look at him and tell him than just go behind his back.
 
I am not a contractor just an employee but my understanding is doing this sort of thing will save you money in the short term but will cost you money in the long term due the fact the sales people will remember your price shopping and make sure not to let that cost them again.
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We had a wear house manager that would bid shop material. We would turn in the material list and she would compile it on our quote sheets and send it to three different supply houses. Then she would compare prices and order the cheapest line item from each vender.
It came back to bite her when Square D breakers came in for a Cuttler-Hammer panel. It didn't take long for the supply houses to catch on to what she was doing. She would send out material list to be quoted and no one would respond. She couldn't get it through her head that she spent as much or more, in terms of dollars, for her time breaking every thing down and requesting 3 different PO# than she would have saved by just going with the lowest price.
Lowest total price, 1 PO# and your done.
 
Any one roll like this .


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Rest is Supply House


Don
 
Thanks for the feedback. It seems like "line item vetoing" a quote is not smiled upon. I wasnt sure, thats why I was asking. To be clear, I am not talking about nit picking every little thing, more just looking for "outliers" as strathead said. I like the idea of breaking a project into several bid groups, because I feel like more people get some business - I always feel bad for the place that doesnt get my business, maybe I am too nice of a guy.
 
electrofelon said:
Thanks for the feedback. It seems like "line item vetoing" a quote is not smiled upon. I wasnt sure, thats why I was asking. To be clear, I am not talking about nit picking every little thing, more just looking for "outliers" as strathead said. I like the idea of breaking a project into several bid groups, because I feel like more people get some business - I always feel bad for the place that doesnt get my business, maybe I am too nice of a guy.
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Since you cited me I want to make sure what I meant is what you read. By outliers, I am not talking about an item in the price range but higher than the rest, as in 10% maybe 15%. I am talking about, when I ask for cord caps and they quote a Hubbell at $13, when everyone else knew enough to quote a Chinese one for $2. But most of the other items on the list are on the lower end of the pricing. There is always one other thing that has to be accounted for too. that is availability. Just always remember the Golden rule, and if you choose , the other two rules I stated, and your supply houses will respect you.
 
ceb58 said:
We had a wear house manager that would bid shop material. We would turn in the material list and she would compile it on our quote sheets and send it to three different supply houses. Then she would compare prices and order the cheapest line item from each vender.
It came back to bite her when Square D breakers came in for a Cuttler-Hammer panel. It didn't take long for the supply houses to catch on to what she was doing. She would send out material list to be quoted and no one would respond. She couldn't get it through her head that she spent as much or more, in terms of dollars, for her time breaking every thing down and requesting 3 different PO# than she would have saved by just going with the lowest price.
Lowest total price, 1 PO# and your done.
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Our company won't buy 100 smoke detectors with the same P.O.# for 100 different buildings (1 per building) they claim they can't capture the cost of the building somehow doing it that way.
Soooooooo, they order 1 detector per P.O. #. and cant figure out why the vendor won't give us a break on them.......
 
As a supplier I don't like being cherry picked, at least give me last look on an item if you are going to do that but business is business. What really makes me mad is when someone needs something but does not know how to figure out what the right thing is and I spend several hours researching, provide a price for correct item, then get shopped so someone can save a few bucks. That's just rude and I won't bother researching next time.
 
We have no special loyalty to any one supply house. The guy that has the best deal today is likely to get the order unless there is some reason for someone else to get it.

Some of those reasons include delivery, sales leads that may have led to the order in the first place, pricing coordinated with other orders, etc. If a particular supplier put an unusual amount of effort into the project for us, that might also be considered if the extra cost is not that much.

I am also unlikely to waste much time worrying about a few hundred dollars on a million dollar project. It is just too costly to change things most of the time. The cost of the change often dwarfs whatever savings there might be.

On the other hand, if there is ten grand to be saved on a $100,000 BOM, I will probably go for it. In fact, just yesterday, I cut out almost $5000 out of a BOM by changing a single part number.

Having said that, we have negotiated prices on most everything already so this does not come up all that often although we do shop around and make sure the suppliers know that we do so, just to keep them honest.
 
I have been on both sides of this fence. I managed a couple of different supply houses when I was younger and for the last 18+years have moved to the contractor side, doing the buying.

On the supply house side, I never liked doing business with people that just cherry picked a few of the low margin items. I always tried to give a fair overall quote and hopefully with the service that was provided, both before and after the sale, there would be a value to the contractor to award the job to me.
I also disliked being offered another look, as this usually meant that, that contractor was just taking the second look to another supply house and offering them another look etc. It is a zero sum game, way too much work for very little profit at the end of it.
Occasionally on a simple drop ship order I might have entertained it.

Now, as purchaser, I fax / email out quotes I expect to get the best price the first time from a supply house.
I will not offer another look to suppliers, if and when they find out, your doing that, they rarely will be straight up in the future.
I award the sale to the low price supplier, assuming everything is available when its needed. If not I will go to the next lowest.
I almost always group similar items when requesting quotes. I will send out a separate quote for wire, boxes, pipe, special gear, fixtures, and then miscellaneous materials.
We of course have rebates set up for normal service gear, circuit breakers, and devices, so the supply houses with those items don't need to quote, the prices are fixed by the manufacturers.

If I do not get the service I expect from the supply house I simply don't buy from them, and there have been a few through the years that had zero dollars in sales to us.

If I don't have time, or don't want to do research into a particular item, and I ask a supplier to do it, they will always get the order. I wouldn't think of shopping it around after they have invested their time and resources into getting me the answers I need.

Side note:
The grass is much greener on the contractor side of the fence! You have 5+ supply houses, the internet, and the big box stores to find what you need, when you need it, at the price you want to pay. Our company only uses the internet and the box stores as a last resort, the supply houses need to stay in business for the oddball stuff required for our operation. We will gladly pay a little more and do the business locally. It also has the very real side benefit of easy returns on defective items, and keeping the local economy going.

On the supply house side you are stuck between a manufacturer lying about a deliver date and an irate customer that needed it yesterday.:rant:
 
qcroanoke said:
Our company won't buy 100 smoke detectors with the same P.O.# for 100 different buildings (1 per building) they claim they can't capture the cost of the building somehow doing it that way.
Soooooooo, they order 1 detector per P.O. #. and cant figure out why the vendor won't give us a break on them.......
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I would think a single PO# to the vendor and then issue 100 other PO's internally under the single main PO#

That is one reason I prefer working with and for smaller family type operations.
The waste and stupidity of the larger corporations is astounding.
 
zog said:
As a supplier I don't like being cherry picked, at least give me last look on an item if you are going to do that but business is business. What really makes me mad is when someone needs something but does not know how to figure out what the right thing is and I spend several hours researching, provide a price for correct item, then get shopped so someone can save a few bucks. That's just rude and I won't bother researching next time.
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Its still a small world. Giving someone the last look is just as wrong as cherry picking. I would hope that my suppliers would penalize the contractor that would do either one. You guys know fairly quickly who they are.
 
cpinetree said:
I would think a single PO# to the vendor and then issue 100 other PO's internally under the single main PO#

That is one reason I prefer working with and for smaller family type operations.
The waste and stupidity of the larger corporations is astounding.
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It happens just as much in small companies too, where a suggestion to save time and/or money is seen as a challenge to authority, or they're so set in their ways they don't want to make any changes. I have found bigger companies do accept input, with the caveat that if it does work, someone else will claim credit, and if it doesn't, it will get dropped on you like an anvil.
 
qcroanoke said:
Our company won't buy 100 smoke detectors with the same P.O.# for 100 different buildings (1 per building) they claim they can't capture the cost of the building somehow doing it that way.
Soooooooo, they order 1 detector per P.O. #. and cant figure out why the vendor won't give us a break on them.......
Click to expand...

These are probably the "accounting specialists" as well that can't figure out how to make that work:huh:

How about a PO that puts them in inventory and then a sales receipt, invoice or other billing document that takes them out of inventory and converts them to a sale or receiveable, I figured that out with just high school accounting as my main education on accounting.
 
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