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Re: Building Materials Shipping Costs - How Important are They?
From: Ashtonru@yahoo.com
Category: Select Category From List....
Remote Name: 69.224.240.135
Date: 23 Nov 2005
Time: 06:12 PM
Comments
Question: How important is it to procure building materials from a
nearby source? How much does transportation of the shipping materials play into
overall costs? Is it totally out of the question to purchase framing materials
from across the country or even abroad? Thanks!
Builders Websource Answer®: The cost of shipping building materials
varies widely depending on the source and destination, the weight and size, the
quantity, and method of shipment. However here are some important points to
consider before you source building supplies out of state or out of the country:
International Sourcing: Pricing of some building materials
from foreign countries may seem enticingly low at first. Examples include
stone such marble and granite and other specialty supplies. However, unless
you're experience in the import/export business, you run several risks that
could quickly eat up your savings. These include:
- Import duties
- Freight costs from an international port
- Shipment delays, resulting in costly project delays
- Unreputable or unreliable suppliers. What guarantee do you have you will
receive the goods you purchased?
- Banking fees, such as letters of credit
- International currency conversion fees and credit card fees of up to 3%
or more
- Costly returns in the event of damaged goods
- Insurance fees
We've seen cases where these items alone can equal or exceed the cost of
goods themselves. If you do decide to source materials internationally, make
sure you're dealing with a highly reputable firm with a proven track record.
Understand up front all the fees involved as well as how to handle claims of
damage.
Domestic Sourcing: Generally, you're better off sourcing
building materials from a local supplier even if the product is imported. You
now have a better appreciation for why the prices are what they are and these
costs of business will be passed on to you one way or the other. By purchasing
locally, you can see the product you're buying first-hand (assuming it's in
stock) and you'll have an easier time returning any defective product.
Furthermore, local building supply companies often purchase in bulk from their
suppliers and they may be able to save on shipping costs by amortizing freight
across a much larger order.
If you order from another US state, you might think you're saving 5-10%
sales tax on your purchase as well. While you might slip under the radar once
or twice, technically most states require that you declare all out of state
purchases on your state income tax returns. This is called a "use tax" and is
equivalent to the state sales tax that you would have paid were to purchase
the goods in your home state. While many people don't declare this use
tax, it's an audit risk waiting to happen, particularly on large dollar
purchases. The IRS or State Franchise Tax Board isn't likely to focus on the
casual Amazon.com customer who buys a DVD online. But if you're spending tens
of thousands of dollars on big ticket items like appliances, building
materials, and other accessories that aren't for resale, you face an increased
chance of an audit, in which case you could be held liable for all back taxes,
interest, and penalties -- something you'd rather avoid. Suddenly whatever you
saved by buying out of state doesn't seem so cheap anymore.
In summary, we generally recommend limiting non-local purchases to certain
small items like plumbing supplies, decorative accessories, tools, and other
items that may be available from reputable online retailers and wholesalers.
Sometimes you can find plumbing fixtures for 30%-40% off if you know where to
look. However, if you're a good negotiator, you can generally get these deals
locally if you work with the supplier and act like you know what you're doing.
If you're an owner-builder, just ask for the contractor's price and you'll often
get an immediate 10%-30% discount on many items.
Builders Websource®
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