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Marc Elliott of GoMaterials Talks Quoting and Purchasing Trends

From episode: EP41 - Revolutionizing Plant Sourcing: Unveiling Go Material with Marc Elliott

We have quoting and purchasing trends. We've touched on some of these things, but quoting and purchasing trends that you guys have noticed. We'll just bring it back up and we'll dive a little deeper into it. For us, just in terms of quoting, what we've done too is like, we treat two types of bids on our platform. There's one, it's just a quote. So basically contractors bidding his job needs budgetary pricing. You just want to make sure they're not shooting themselves in the foot at the end of the day. So in terms of that, like what we've started doing, especially since COVID hit is like the prices go up 10 to 15 points because at the end of the day, if this job is going in a year, we don't even know what's going to happen anymore. And yes, there's a trend towards economic recession and whatever it is. But we've seen crazy things in the plant industry that we just want to make sure we have our contractors covered. So, you know, they're not eating their shorts. If the job comes around to them and at the end of the day, they can make a little more profit because if they get it and they're able to save at the end of the day, another 10 or 15 points in the material, that goes right in their pocket. We want to give that back to them. We're not a greedy company. We just love shipping plants and helping customers out. And then in terms of the purchasing, the biggest trend is just the number of nurseries we have to use on a single order is extraordinary. We have our transport costs are through the roof right now, as you know, like gas went up, there's a shortage of drivers. So on an average order, especially in Florida, Florida is probably one of the biggest, the toughest markets for that. On an average order, we're using 13 different nurseries, 10 different nurseries, not because we're trying, it's just the products not available and we have to go to that many different nurseries. So just in terms of purchasing trends, it's like the number of nurseries we need to go to fill an order has skyrocketed versus five years ago. Five years ago, we could fill an order with five nurseries. Now it's gone up in the double digits or close to it on most orders.

Willie: And what, so what are you guys doing? So let me paint the scenario. I am a landscape contractor. I have a big job. It's a half a million dollar project and I am in New York city. Okay. Now I reach out to you guys and I tell you, Hey, I need a estimate. I need a quote on this job. Um, what do you guys do for that customer in terms of looking towards the future? Do you tag on 20 %? Do you tag on 40? How do you, sure you don't shoot yourself in the foot?

Yeah, of course. It depends how far they say the project's going to be going out. So if it's an estimated from a year from now on average, we'll do about a 10 % versus what we vote is if it's going today, and again, if it comes around from a year from now and we can save the contractor 10 % versus what we quoted and we'll do that because we're more than happy to put more money back in our contractor's pockets. Um, if it's going from six months from now, because of what happened in COVID, we're estimating about an average of five to 10 % a year. And that's what we've seen. You know, plant prices have gone up like three gallon Coco plum. You can buy that at $3.50, about three years ago, and now it's at $4.50. So you've seen it go up on average about 10 % a year. And that's kind of what we're forecasting based off the past.

Willie: Do you guys honor your estimates with the solid pricing that's there? You guys put some type of clause at the bottom that if something's shifting, you will tag..

Clause is there at the end of the day. But if I have to pay more, we always tell our contractors, we do our best to honor what your pricing is. I want my contractor to make money because if he's making money, he's happy, if I can make a bit of money doing it, I'm happy. So we do our best to honor price. And if not, we have an explanation of it. We've written notes to architects saying, you know, we'll offer a sub, like, Hey, we want them to meet their price. And you know, we did a job actually in Homestead, Lozener park. Okay. It was over $500,000 of product going into there. I was quoted back

Willie: Down here?

Yeah. Lozener park

Willie: And got the job from Canada.

Yeah. $500,000 of Florida plants.

Willie: I love this. I love this. Okay.

But that was quoted in 2020 pre COVID. Okay. $500 ,000 in material. My contractors final costs went up about 1- 2 % from 2020 to the end of 2022. Okay. So like that's the lengths we go through to try and hold pricing for a contractor. So you understand, you know, pre COVID and you got a quote and it only went up 2 % post COVID right at like the peak of the shortages, that's pretty solid.

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