Would you like to learn a process that can save 20-30% on your annual sundries purchases without changing many of the items you’re already using every day?
My name is Scott Lollar and I am a DYB Coach.
I’m going to show you how you can save money, time, and improve field efficiency with a simple process that your team will love and will add money to your bottom line.
The process involves identifying all of the everyday items you use in the field, listing them using a spreadsheet, and then submitting the spreadsheet as an RFP(Request For Proposal) to your vendors, and then ordering and stocking in case quantities at your shop.
So what are the benefits of standardizing and stocking your sundries?
The first benefit is that you get the lowest and most competitive price on everyday products you already use just by asking.
Your suppliers frequently use a percentage discount based on your buying habits when in fact they have the ability to do much more if pressed.
For example: recently on a tape item, there was a $3/per roll difference between two vendors for the same exact product!
With a recent company I was working with, their preferred roller cover price dropped from a 15% standard discount to a 40% discount just because I asked.
I track sundries separately from paint as Cost of Goods Sold in my P&L and my experience says that about 3% of revenue is spent on non-paint related supplies required to perform your painting projects.
So a $500,000 painting company could save up to $4,500 a year by implementing this type of program and a $1,000,000 company could add up to $9,000 straight to their bottom line.
But the bigger benefit of standardizing and stocking your everyday sundry items is your team NEVER has an excuse to run out of an item and make unnecessary trips to paint store.
These trips to the paint store several times a week multiplied by the number of crew leaders multiplied by 50 weeks in a year and you could easily be thousands if not tens of thousands of dollars in unnecessary labor and labor burden costs that come right out of your net profit.
An additional benefit of doing a formal RFP is that you create competition between suppliers for your business by requesting their best pricing understanding you are asking the same of their competitors.
They want your business and will work hard to earn it.
And lastly, standardizing your supplies creates a consistent platform when new team members come aboard or when crew members get moved around. Everyone uses the same tools and products on every project which provides consistency in the field.
So what items are we talking about?
First of all commodity items: Tape, Roller Covers, Brushes, plastic, tarps.
Items that can be purchased from several suppliers without a compromise in performance.
Secondly, best practice items, these are tools that you find are superior or perform better and would like your team to use.
These may be a certain roller frame, brush or caulk gun, extension pole, you name it.
If it’s the most efficient tool or product, you want it to be used universally in your company and need to pursue the best pricing for these items.
And lastly, you should request quotes for infrequent purchases like Ladders Sprayers Power Washers.
You will always get a better deal by asking for a quote before buying.
So how should you create your list?
Create your list as a spreadsheet. Include anything and everything you use in your company.
To assist in creating this list, I recommend creating an advisory committee made up of your painters.
Invite your whole team so everyone has the chance to participate.
Painters have their favorite whatever and will be glad to tell you why they like it and why it is the best option for any given task.
This feedback is good for everyone. It gives them a voice and a vote in the everyday items your company utilizes, and they will be more likely to adopt the results when they had a part in determining the items.
In addition, you will receive valuable insight into best practices that an owner may not be in tune with if they are not any longer in the field.
Meet at the shop or a paint store that has an excellent selection so you can grab options from the shelf as needed.
I did this once after a vendors store closed for the day and it was a great environment of learning from each other and got the vendor on board as well.
You will need to do some advanced work with vendors or online to make sure you have in hand the items you will be discussing but make sure you allow for dissent and discussion for all items.
I would encourage you to meet at least quarterly and get feedback and Revise your list with these team members as well.
Once your spreadsheet is complete submit it to your vendor partners.
This should be done with your vendor representative, not a store manager.
If you do not have a representative designated to your account, request one.
This will be your go to person for all of your paint store needs and will give you the service and attention you require.
Your vendor relationship should be fair, not adversarial, don’t beat them up on the price.
We all hate when customers do that to us so don’t do it to them, you are only asking for fair everyday pricing.
As a side note this is why I do not purchase items at annual Pro Shows. Your everyday pricing should rival “special” pricing at these events.
Tell the vendor that you are looking to buy in case quantity, and then ask them to input their items into your spreadsheet.
This will make it very easy to do your assessment of the pricing of each vendor on the same items.
Give them specific sales or UPC numbers for exact items. This will alleviate you getting quotes on the wrong items.
Let them know what items can be substituted and which ones can’t. For instance if you want a specific item from a specific manufacturer, there can be no substitution.
In addition, I also request the number of items in a case. This will help in ordering when that time comes.
Once your vendor returns the spreadsheet, I recommend putting each vendor in their own column for easy comparison.
An additional helpful step is to highlight each cell that has the lowest price for each item so you can easily see which vendor is the best choice for each item.
Make your buying decision based on overall criteria, not pricing of one item.
I find it is easier to do the bulk of your purchasing with the one vendor that has given you the best overall value.
Now you’re ready to set up a shop area.
Organize your supplies in their cases in a space where items are easy to access and with the shelving space required to neatly store your products in their original boxes.
I recommend arranging by tasks:
Preparation. Application. Protection. PPE. Etc…
Use your spreadsheet to add a quantity to have on hand. This is called a max/min level.
This is a minimum amount that when reached will trigger your team to order additional cases.
When you reach 1 case of tape remaining, you order 3 additional cases.
In this example, your minimum level would be 1 case and your maximum level would be 4 cases.
These levels should be recorded in two columns on your spreadsheet with a blank column adjoining for an order quantity when you need to re-order.
Delegate the stock level monitoring and re-ordering to an administrator. You also can get the vendor to come in once a week to do this if you prefer.
I would also require all of the items to be shipped in unbroken cases. This aids in organizing your shelves allowing for box sizes and space needed for max/min levels.
If you do not set this expectation upfront, you will eventually if not often receive bags stuffed and overflowing with items that are impossible to shelve with any kind or of order.
Lastly, I recommend you carry all of your required tools list at your shop for easy purchase at your cost by your painters.
Create a checkout form for anything a painter can buy from the company store for which they will benefit from your deep discount and ease of pick up.
You can deduct the amount from their paycheck.
Your team will have items that are in better condition because of the ease of “Purchasing” and it will reduce paperwork your staff incurs for in-store purchases by employees for deduction from their paycheck.
The best results for a program like this will be for those that have some sort of shop space or designated storage in their principle place of business.
If you do not have this option available, you should still use this process for cost savings.
I would recommend creating a simple document of your approved items for use by any authorized person that they can use when they re-stock their work vehicle or job site. This will limit random shopping that we all can be prone to without clear parameters of what we are there to buy.
This exercise will benefit you and your field operations in ways you never imagined so I encourage you to set up your sundries list today!
To help you get started, I am glad to offer a free 30-minute consultation.
We have Mastermind Groups and 1 on 1 coaching if you are ready to take your business to the next level.
Let me know if I can serve you in any way at Scott@DYBCoach.com.
Also, don’t forget to download your Sundries Cheat Sheet here.