Dealers, builders increase collaboration, sales and efficiency in today’s turbulent environment

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As the global COVID-19 pandemic settles into a third year, dealers and builders understand that there is no better time for some old-fashioned teamwork to combat rising material prices and labor shortages.

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The National Association of Home Builders (NAHB) reports that framing lumber prices alone in 2020 and early 2021 contributed to a $30,000 rise in the cost of building the average single-family home. Everything from faucets to garage doors is on backorder. Plus, to add to the sting of supply chain issues, finding labor is a huge challenge. At least one US dealer reports it has hundreds of open positions as it also manages through material price swings and spikes.

A second NAHB study, done in partnership with Wells Fargo, found that builder confidence fell in January 2022 as measured by the Housing Market Index. The NAHB reports that higher material costs and labor shortages are both factors in the decline in builder confidence.

To combat the uncertainty, dealers and custom builders are using software to improve communication and consultation.

With material costs in flux, it’s critical that builders give the homeowner options. While it isn’t ideal for homeowners not to have their first choice on a build, the current market requires builders to have multiple construction options to prevent a project from stalling. Customers appreciate the transparency when builders offer more choice on price.

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Integrated price lists provide accurate pricing

However, providing options requires builders to provide accurate material and labor estimates that are clearly stated in a customer’s quote. The right software allows builders to perform takeoffs and generate estimates and quotes more quickly. Online digital tools eliminate human error that can occur with traditional takeoff methods, and recent innovations now make it possible for pro dealers to offer builders the most up-to-date pricing whenever the builder needs it.

For example, Buildxact and Epicor BisTrack have extended the relationship between the dealer and the builder. Dealers using this software platform can offer builders the latest pricing any time of the day, even late at night or on the weekend. Builders can then submit orders directly into the dealer’s ERP.

By digitizing this pricing relationship between the builder and dealer, manual pricing is removed, and this cuts time wasted returning multiple phone calls and emails. It also reduces the chance that errors creep into orders when prices fluctuate. Inaccurate pricing can occur within a matter of only a few days in the current market, and inaccurate prices negatively affect builders’ profit margins because it’s difficult to pass on unexpected price increases to the homeowner.

Plus, dealers and builders are still finding other benefits from using software. Dealer account managers who spend less time on pricing find that they have more time to consult with customers. Once in a more collaborative environment, builders tend to quote more work to prospects, win those jobs, and in turn, return to the dealer for more transactions.

Those transactions can be made easier when the dealer uses integrated price lists to create recipes, by grouping together SKUs to create packaged components. For example, door jams, hinges, and locksets can make up a door installation recipe. With one click, the builder can add all these items in the estimate, confident nothing was missed. Missed items not only waste time; in the current pricing environment, they can lead to unnecessary cost increases as well.

Using online software, like Buildxact, enables the dealer to capture transactions across a wide spectrum of customers. Once this data is aggregated, dealers can better understand the needs of builders and remodelers using the platform. Dealers can go beyond the SKUs that builders are buying to understand those they are not. This kind of transparency leads to improved inventory planning and more effective conversations with builders about their purchasing decisions. In these instances, dealers can find themselves winning back sales they might otherwise lose to competitors.

Integrated software features connect job estimates to scheduling

Creating highly accurate estimates with software has added benefits when that software offers integrated features like those found in Buildxact. Builders can use takeoffs to create easy-to-follow schedules for subcontractors. Each group of contractors can receive reminders by email or by text to minimize miscommunication and contractor downtime.

Accurate estimates and highly coordinated schedules can help prevent contractors from walking off jobs, according to John McBride, a general contractor and real estate investor who runs BlackTree LLC.

McBride runs multiple projects at a time and uses them to prevent unforeseen delays, like bad weather, from grinding a project to a halt. It also prevents scheduling conflicts that can lead to subcontractors arriving on a job site at the wrong phase of a project. When this happens, builders risk contractors being unavailable later in the project cycle due to the current shortages in skilled labor.

To maximize his use of skilled labor, McBride uses Buildxact to email and to send text messages to subcontractors whenever he needs to let them know about scheduling changes.

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“The software makes it easier to communicate between all my subcontractors,” McBride said. “It gives me the bird’s-eye view that is required to pick alternate time slots if someone is delayed and to notify every other subcontractor down the line.”

Construction management software, like Buildxact, also builds a record of past jobs so that builders know how long individual construction tasks should take. Records can be used to evaluate subcontractor performance to ensure all parties follow previously agreed timetables, which ultimately controls labor costs.

Because Buildxact offers multiple features, it is an ideal software solution for both dealers and builders. It allows for transparent communication and a higher level of collaboration that keeps uncertainty to a minimum.

As a result, construction projects can keep moving and stay on-track amid these turbulent times created by the COVID-19 pandemic.

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