How Do Credit Pickups Affect Your Business?
As a homebuilder, you’re well aware of credit pickups. While they have useful aspects, many builders and remodelers cite credit pickups as one of their biggest frustrations with suppliers. When a supplier is delayed picking up your unused materials, you lose money and goodwill with your clients.
Additionally, delayed pickups can lead to lost or stolen materials, a loss in quality of the material due to weathering, and homeowner angst due to leftover materials sitting around for days and weeks. Ultimately, the biggest issue with credit pickup delays is the delay you face when you’re waiting for your supplier to credit your account for those unused materials.
Why Big Pickups Are Best Avoided
It’s best to avoid large credit pickups when possible, because they put you out of money for no real reason. When you have cash tied up in materials waiting to be picked up, it has a real effect on cash flow and job efficiencies.
Given the nature of construction, it’s difficult to avoid credit pickups. To keep your books in order, it does help to do your best to make a good estimate at the beginning of your project. Some lumber suppliers offer project estimating tools that use latest technology to analyze your blueprints and determine exactly how much of each material you’ll need for any given job.
Another way to reduce pickups is to utilize data-based decision making. Do you know what percentage of your purchases end up as credits?
If you don’t, it’s a good idea to start tracking that metric. The industry best benchmark for percent of sales returned for credit is around 3 percent. Does your current lumber & building material supplier track this metric?
At Zeeland Lumber & Supply, we work closely with our clients to maximize material utilization, and help cut down on big pickups. We provide transparent reporting to our customers, and track credits as a percent of sales by our customers to hold us both accountable to best industry practices. Our team of truck drivers take pictures of every credit we pick up to enhance the credit pickup process. The less waste you have onsite, the leaner your business will become.
But for those times when you do end up with unused materials, it’s important to have a quality supplier who will work with you to address your credit pickups in a timely fashion.
How Your Supplier Will Affect Your Credit Pickup, And Your Reputation
It’s important to choose a reputable lumber and materials supplier who offers some sort of commitment on their credit pickups. Otherwise, you may find those unused materials still in your client’s front yard months later, and your account with the supplier still at a deficit.
Not only does this hinder your ability to purchase new materials, but failed pickups can also hurt your reputation as a builder. No homeowner wants to stare at a pile of lumber in the yard of their brand new home day after day. Even when it’s not your fault, a homeowner may blame you for leftover materials that have yet to be picked up. This can put stress on your professional relationship with that homeowner, even though you delivered a spectacular home.
It’s absolutely key to choose a supplier with a timely credit pickup process, so you can keep your job site clean, use your cash for business building efforts, and maintain your positive reputation with clients.
What to Expect From A Quality Credit Pickup Process
When you’re looking at lumber suppliers, check for a company who is committed to a limited time frame for credit pickups. For example, here at Zeeland Lumber & Supply we are committed to a five day process for our credit pickups, which we measure weekly. It breaks down like this:
- We have two days from the time you contact us to pick up the materials.
- We then have an additional two days to get the materials back into our inventory.
- Finally, we have one day after the materials are back in stock to credit your account.
That entire process adds up to a five day turnaround from the time you contact us to the time your account is credited. To make this easy for customer, you can either call us or email credit requests to email@example.com. We work to stick as closely to the 5 day goal as possible, and we measure this goal weekly to make sure we’re on track. This holds us accountable to our commitment, and helps us keep track of where our materials are at all times.
Our weekly measurements help us keep score and if we don’t hit our five day goal we determine why we didn’t make it in time. From there we determine the proper corrective action.
In the end, a quality pickup process from a lumber and building materials supplier should offer a commitment to a short, specific pick-up process, that gives you a clear picture of when the materials will be off your job site, and when you’ll receive your credit.
Let us show you how the Zeeland Lumber & Supply five-day process for credit pickups can benefit you. Give us a call at (888) 772-2119 or contact us online today to start the discussion.