Trade references?

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Gbeu92

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Location
Mcdonald pa
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Electrical contractor
I'm just curious how some of you got trade references to get a line of credit with Electrical supply houses?

All my local supply houses require 3 trade references, but I have no history with other supply houses giving my business credit? I've always bought materials either at home depot, online, or if I visited supply house I paid cash.

How would one go about getting a supply house to start a line of credit for a business with no trade references?
 
One would think they would offer something based off your personnel credit score, and than build from ther.
 
I'm pretty sure when we opened our first account I just listed trade professionals I knew who could vouch for my professionalism, trustworthiness, and otherwise coolguyness. Seemed to work just fine.

Rob
 
Stay out of the box stores and pay cash at the supply house to start. Pick a small local independent supply house if one still exists in your area to get started with. Go in and sit down with the manager and have a talk with him/her. And yes make a list of customers and anyone else you know who can and are willing to supply references. If you can show any accounts that you have that you pay like vehicle payments mortgage rent etc you should be able to scrounge enough up to get started
 
Sure big box are at time a bine but at times a necessary evil, they are fairly easy to get a business account with and can count it toward establishing the trade references. Also any reputable GC you may have a connection with and willing to vouch for you given your reputation with them might also count. I say "reputable" because their reputation if bad would reflect poorly on you and your attempt to get a "line" .
 
I have 2 smaller supply houses in the area, one is All phase electric which has 1 location and the other is Sunray electric which has 2, both of which are somewhat local. Sunday were who I was leaning towards anyways. I've used them a handful of times in past and paid cash. Maybe I will talk to them and see if they can work with me.
 
I thought that when I started my business that supply houses would sell me materials cheaper than I could get them at Home Depot. This turned out to be mostly false. A few things are cheaper, but much of the material is way more expensive. (I've seen panels that are three times the price.) When I asked how do I get discounts I was told that I had to do a lot of business with them first, basically buy $20,000 of overpriced material to start getting a discount. I told them no thanks.

So I do almost all my material shopping at Home Depot and I love it. I can go online and see all the material available. I can see the inventory level at every store. I can see the exact price I will pay. I can go get it or have it delivered. I live in an area with lots of HD stores, so if I need something while on a job, I'm usually no more than 20 minutes from a store. The only time I go to supply houses is for big wire and a few odd things HD doesn't carry.

I did fill out a cash account application at the supply houses I do business with. I pay with a business credit card. They have verified that I'm a contractor and not a DIY. This gets me the non-discounted contractor price which is cheaper than the DIY price. Other than that, I don't plan on supporting supply houses that don't care to support me.
 
I am just a small fry but I would just use cash. I never wanted to extend my self then be waiting on checks from people. As far as prices goes Between supply house and big box store, it must be a regional Thing. My supply house beats homedepot on everything but nmb wire and some panels. If you can buy in bulk what you know you will use and try and beat them down for the large purchase of a single item. It depends on the manager, I have to call on certain days when one gentleman is not there.
 
Prices at HD are outrageous for 99% of electrical items compared to a supply house. About the only thing they can be competitive on is 14/2 and 12/2 NM cable. 14/3, 12/3 and larger NM they are always 10-20% higher that supply house.

Metal boxes and rings 2-3 times the price of supply house.
Halo 10-20% higher than supply house
Wiring devices and plates 50-100% higher than supply house.
EMT fittings 3 times price of supply house
Lutron dimmers 20%+ higher than supply house.
I could keep going.

You are also very limited on the items that HD stocks. If you are going to the supply house just for the occasional odd items you are definitely not going to get good pricing. You need to bring most of your business into the supply house and work with them on pricing.
 
The lines of credit I have I've had for probably 20 years. They wanted trade references from other businesses I had lines of credit with. But I was thinking the same thing as you. What do you do today when we pay everything with a credit card? I think it would be easier for the supply house if they just did away with "house accounts" and required a card to be on file or swiped. They get their money right away and don't have to worry about customers not paying. I suppose the only down side is the merchant fee but that can be handled.

-Hal
 
Gbeu92 said:
I'm just curious how some of you got trade references to get a line of credit with Electrical supply houses?

All my local supply houses require 3 trade references, but I have no history with other supply houses giving my business credit? I've always bought materials either at home depot, online, or if I visited supply house I paid cash.

How would one go about getting a supply house to start a line of credit for a business with no trade references?
Click to expand...
Why do you want the supply house to be your zero interest banker? Just use a cc and pay it off every month so no interest.
 
curt swartz said:
Prices at HD are outrageous for 99% of electrical items compared to a supply house.

You are also very limited on the items that HD stocks.
Click to expand...

Well I guess it must be a regional difference because like I said, HD here is cheaper than supply house most of the time. As far as being limited on items, I guess it depends on the type of work you are doing. The HD here carries 99% of what I use on a daily basis for residential and light commercial service and renovation work. The HD stores here are some of the larger stores they have so bigger selection. Keep in mind also that you can order lots of things they don't have in the store and get it in a few days. Usually jobs that have unusual material needs are planned a least a week in advance.
 
HD it must vary by location. They are convienent but my complaints are:

Prices are ok on things they sell a high volume of, everything else seems high

They don't have free coffee

You go in to pick up 10 items and you will find 1 or 2 of those is out of stock, so you end up at a supply house anyhow

Want something a little odd like SE cable for a 150 am service ...forget it

They don't have free coffee

Items are always in the wrong bin (I am sure this is the sloppy customers) not all HDs fault

I went in the other day looking for 1/2" PVC 90 deg sweep they had 0. I asked the clerk he looks on his phones and says "we got 160 of them it says" but no one could find then settled for 2 45s

Then went to a real supply house and got free coffee
 
You know you can place your order with hd or one of the other big box stores and they will collect it for you. No chasing stuff down. Let them do the work.
 
Eddie702 said:
HD it must vary by location. They are convienent but my complaints are:

Prices are ok on things they sell a high volume of, everything else seems high

They don't have free coffee

...

They don't have free coffee

...

Then went to a real supply house and got free coffee
Click to expand...

Funny, none of my supply houses have offered free coffee or pastries for a while, since about March I think. (I live near Seattle)

Rob
 
Thinking too that they have to have someone to maintain the house account, open mail and deposit checks. That has to cost them something, possibly the salary of at least one person.

-Hal
 
I know some of my low voltage supply houses offer accounts with a CC on file or standard open credit accounts. The CC does cost them some in fees but they have the safety of knowing they get paid. The CC accounts are generally for companies doing less that $2K a month.

There is no way a supply house can eliminate having accounts and going to 100% credit cards unless they only want to deal with small contractors doing service work. Not only will the amount of CC fees be high but most people don't have cards with 6 or 7 figure credit limits.

The other thing to consider is the supply house credit helps finance jobs. If I place a order for power or lighting that may take 12-16 to ship I don't pay anything until I receive the material. If I were to use a CC they would charge the card as soon as I placed the order. CC would then expect payment in full on next statement or charge high finance fees.

Also on larger projects supply houses generally require job accounts which allow them to lien property if contractor doesn't pay for material.
 
I don't believe in general the cc companies allow a cc to be charged before the merchandise ships.

And why would there be any question of a lien on the part of the supply house if the material was paid for on a cc.

There are a lot of small, medium, and large size businesses that buy a lot of stuff on cc these days.
 
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