When it comes to building a custom home, you have dozens (if not hundreds) of companies to choose from that can tackle the job for you. From general contractors that have branched out into major construction to veteran home building pros, and even national chains of major builders, your choice of whom to trust with the task of building your dream home is a big decision.

In modern times, there’s a big emphasis on shopping small and shopping local – and those ideas are great in theory. But with that in mind, it’s important to balance your own needs with a desire to support the little guy. So picking a small- or medium-sized local builder with the experience and relationships needed to get the job done right is probably a better option than choosing the brand new mom and pop team looking to close their first custom building job. Why? One of the biggest reasons is buying power.

What Does Buying Power Mean?

Anyone can purchase building materials – or anything, really – at the normal price. For example, you could walk into a major home improvement store and purchase most (or all) of the materials needed to construct a new home right there, on the spot. But paying retail prices for those materials will cost a fortune compared to a contractor that’s able to get the same goods at a negotiated rate.

In many cases, materials can be supplied at a lower rate to anyone that’s purchasing goods on behalf of a company – this is typically referred to as the wholesale rate. There is usually a significant difference between retail and wholesale, mainly because wholesale purchasers tend to buy in bulk.

But beyond the concept of wholesale pricing are professional suppliers – businesses that only work with other professionals, and don’t provide retail pricing to individual consumers. And further still is the idea of buying power – when a wholesale company, professional supplier, etc. decides to extend an additional discount to a particular purchaser, because of the volume that they purchase. These discounts may not be as significant as the difference between retail and wholesale pricing – but they definitely add up when you’re talking about tens and hundreds of thousands of dollars in material costs!

How Do I Benefit From A Builder’s Buying Power?

One of the biggest benefits to you as a customer of a builder with strong buying power is… a lower price! When the buyer can save money on materials, they’re most likely going to pass along some of those savings to you in an effort to earn your business. So if you get two estimates for a construction job from similar companies, buying power could be one of the reasons for a difference in price when everything else is relatively equal.

But beyond the sheer economic benefit of choosing an established builder with buying power, you’ll enjoy a few other perks too. Your builder will be more likely to adhere to a schedule or timeline if they have buying power, because their suppliers work hard to ensure that materials aren’t delayed for their best customers – which means fewer possible delays for you as the end consumer.

Also, you get two additional benefits when it comes to quality. First, a builder with buying power has established relationships with certain suppliers – and that means they use the same materials over and over again. So when you visit a model home or previous job site, you’ll be looking at an end product that’s fairly similar to the result you’re going to get. Additionally, you can tap into a better market of high-quality products without an astronomical increase in price – because the discount your builder gets on those materials brings them in line, cost-wise, with the lower-end products you could get at retail or wholesale.