Dealing with Rising Material Costs
This year has seen lumber costs rising at an alarming rate. Prices for lumber have nearly tripled since last year, and this has hit contractors hard. It can be challenging as a remodeler to keep up with these price hikes. We’ve put together some tips for contractors, to help you deal with rising costs - and keep your business profitable!
t’s a good idea to include a pre-construction agreement in your contract. This keeps you protected should prices rise after your project is underway. An escalation clause lets your client know that costs may increase, and those costs will be passed to the customer. It's important to be transparent - have this discussion upfront to avoid tough conversations later on.
Buy Lumber Direct From a Supplier
Lumber yards tend to offer a lower price tag than the hardware store. Having a good relationship with your local yard can help you negotiate for better rates. Partnering up with other contractors to buy lumber in bulk saves pennies for all! Pooling your volume helps you get more for less. Some contractors even recommend stocking up ahead of time, in case of more price hikes down the road.
Using Alternative Materials
The cost of lumber and OSB may be increasing, but you can save by cutting costs in other areas. Keep an open conversation with your client about different options available.
Do your research, and be open to other products from different suppliers. In a framing project, you could consider 2 x 4 x 10’ studs when possible. 14’ and 16’ studs tend to be priced higher. Recycled materials and repurposed lumber may also be more cost effective options.