Can you save on Material costs by Buying Materials yourself while building your House?

The answer may be Yes for some. But it all depends. Following are the reasons why its usually not the case many times.

Reason-1 : Basic Cost of Construction

How many of us really understand and can calculate precisely what is the cost of construction. 

Hardly few. Also, cost of construction depends on factors like specifications, location, availability of labour and materials etc., 

So people saying that they have saved some X% of the project cost might not even know what exactly the project costs are in the first place.

Reason-2 : Economies of Scale and Repeat Purchase

Both due to economies of scale and as a repeat purchase, good contractors usually get materials at discounted prices than a first time buyer (i.e., customer himself). 

We have started House construction business 4 years back and am getting materials at a much discounted price and with a good credit cycle than what I used to get when I initially started the business.

Now the question is whether such a benefit is usually passed on by a contractor to the customer or not. 

But if you hire an ethical contractor who is transparent in their pricing structure, I bet he will get the least quote for any building material.

For Example: At our company we provide Rs. 20,000/- worth of CP Sanitary (bathroom fixtures) to our customers who are constructing 1000 sqft House and choose our Silver package. 

Refer our House Construction Cost in Pune for detailed specs. Once the customer selects his/her choice of the fittings, we get the best quote for those from the market and share with the customer also. Many customers have tried to cross verify the quote with the dealers/distributors they know but their efforts have been in vain.

Reason-3: Material Wastages

Many times in construction projects, materials tend to get wasted or unused due to numerous reasons. The cost of the wastage is usually borne by a Turn key contractor. Also contractors can easily use such materials in their other sites. 

This cannot be done when a house owner directly purchases materials at his own cost. Lot of times, house owners either have to give away the materials for free or at a partial cost just to get rid of them from the site during completion of the project.

Why Still people Prefer to Buy Materials on their Own?

  1. Lack of confidence on contractors on the brands and amount of material they use
  2. People still believe they can source all the materials at better rates than contractors. Again I tell you this is only true if you are constantly in touch with building material dealers and distributors.

Why hiring turnkey contractor makes sense for House construction

  1. Turnkey contractors usually deal with material suppliers on daily basis so they can get the best rates for you
  2. Don’t assume rates and feel that you have got a good discount. Even with more than 7 years experience in construction industry and working with builders, it took me a while to get the best rates in the market. (While working we mostly had material+build contractors for our works)
  3. They are experienced in suggesting the right substitutes which might cost you way cheaper
  4. Wastages and other over heads are usually taken care by the contractor. Giving a labour contract you might waste more materials than you think
  5. Labour contractors can usually blame their poor workmanship on the materials you have supplied.

Our 2 cents in this case : Go for some turnkey contractor who are transparent in their dealing and pricing.