May 2005

1. Buy on special or sale and save – yeah right
2. It’s not often I get thanked for helping people not save money.

Hello

When people start getting serious about building a new house they usually have a picture in their mind of what they want it to look like when it’s finished, and a pretty good idea of how much they want to spend. Then they enter the design phase and start to realise that maybe their dreams and wishes will stretch or even snap the budget. It’s at about this point that the bargain-hunting instinct kicks in, and their eyes scan the newspapers or businesses offering specials or sales on household appliances, fittings and fixtures.

Why do companies offer sales or specials? Often to get rid of old or slow-moving stock that other customers don’t want, or the company has purchased a mass-produced product on bulk and needs to move it in a hurry for them to make a profit. Understand that if a product’s price looks too good to be true, it usually is. We also find that most salespeople selling products to our clients have absolutely no concern for the big picture or how a product will be incorporated into the overall scheme. They are only interested in making the sale, and who can blame them. Unfortunately, the product often ends up not being used for its intended purpose and costing the client more than they save. Recently this happened with two of my clients. I’m raising this issue because it happens a lot and if I can save you from wasting money, then that’s great.

One of the biggest compliments a couple of clients paid me was this: We are in the process of designing several houses for two wonderful couples (completely separate projects), and during the early stages of the design process I could see that in both cases their wishes were going to put pressure on the budget. When this happens I am always quick to point out that it’s not the size of a house that determines its end cost but the fittings, fixtures and finishing’s. So, a few days after telling them that they were both likely to blow the budget by between $30 & $90K. I got a phone call from one couple and an email from the other full of ideas of how to help save costs. The phone call went like this: “I’m at the Tile Warehouse and they have a tile sale on, do you think we should get the tiles now to make a saving?” When I get a phone call like this I am faced with a real juggling act, on one hand I’ve got to convince them that this is not the way to save money and sometimes even costs more, and on the other hand I must make them appreciate that I am acting in their best interests and not my own. You see, in the past there has been the suspicion that I was opposed to the client buying products because it might do us out of our margin.

So, what are the problems and pitfalls associated with the client buying products before the project has started. Firstly, remember the 6 Ps - Proper Planning Prevent Pretty Poor Performance. As mentioned earlier, retailers don’t see the big picture and therefore can’t appreciate how their goods and services fit in. In my experience this is what happens when clients go bargain-hunting; they purchase goods on sale and than find out later that it’s too big, too small, wrong shape, too much, not enough and no longer being produced, etc. Then the bargain they thought they had becomes an expense. Tiles, in particular, have to be planned because often they are laid in specific patterns, and insert tiles mean quantities can be hard to calculate.

Imagine if you bought a batch of tiles in January but they won’t be laid until, say, August. We then find we are short by a few square meters but the manufacturer doesn’t make them any more and we can’t match up because the batch numbers have changed – bugger!

The clients who phoned me to ask if they should buy tiles at a sale made a special trip back to the office to thank me for helping them plan their purchasing process, and working in their best interests. And I in turn thanked them for listening to me and believing I was acting in their best interests and not because I might lose the builder’s margin.

The other couple emailed me with this message: There is the odd 'sale' around for various things. Tile Warehouse has a good one in May for example. Should we have a look at these? There is a local special on stoves and cook tops at present, so we are inclined to go have a look. What say we get a price on one we like and get back to you?

I emailed the same message to client ‘b’ as I told client ‘a’, and this was their reply: Agree entirely, we have seen where items have been bought in advance without consultation and then not fitted! No intention to buy anything.

Appliances are usually one area where you can be safe buying early but you can still get caught out. Even so, without close consultation with your designer you could end up having to design your kitchen around your appliances, not the other way around.

So remember, some designers and builders do act in their client’s best interests. And sometime they achieve this by advising them to spend a bit more to get the product made for a specific use.

Have a great weekend.

Regards

Julian

PS: We have been experimenting with some ideas and have built an 1890s Settler’s Cottage in our Masterton yard. To date we have just built it to shell, which means that it is totally finished on the outside including all replica and period trims, fully painted, spouting fitted and double glazing. There is only open framing on the inside at present but some of the ceilings have wooden paneling. This is a delightful authentic period replica cottage and we have priced it at only $94,500.00 including GST ex our Masterton yard. See the plan and artist’s view attached. However, because we are keen to sell, we will deliver it free to you on your Wairarapa site (conditions apply) – value $6,500.00 incl GST

More and more inquires and sales are from beyond the toll free area of our office. Because of this, for your convenience we have a 0800 free-help phone line to our office. So if you have any questions or queries you can contact me on 0800-66-77-27. Also our new usual phone number has changed to 06-370-2058