by Lane Mangum, VP Business Services, The Concrete Countertop Institute
Concrete countertop material costs are cheap. They’re mainly just sand, cement and rocks. Even when you add in all the specialty ingredients and everything you use up while making concrete countertops (melamine and foam for forms, diamond pads that wear out, rubber gloves, etc.), the average cost over time for materials is only about $10 per square foot (for 1.5″ thick precast).
In this article I wrote for Concrete Decor magazine, I compare that to labor costs, which are about double that at maximum efficiency, and explore ways to increase your profitability by keeping labor costs low.
But that doesn’t mean you can totally neglect your material costs. Since we started selling concrete countertop supplies and equipment about a year ago, I’ve seen some issues with how concrete countertop pros are approaching buying supplies.
Mistake #1: Lack of Planning Ahead
This is the big one. I consistently see concrete countertop makers buying small quantities at the last minute.
Even if you don’t get into a situation where you’re paying outrageous amounts for rush shipping, shipping can still increase your material costs substantially. With some items, it’s simply unavoidable. They may be large and bulky and cost more to ship. Often these are items like pozzolan, which are low material cost but high shipping cost, so shipping is unavoidably going being a substantial portion of the cost.
However, you can minimize this cost by buying in bulk. Here’s an example.
Buy 10 bags of VCAS, shipped from NC to the Northeast:
- $325.00 shipping, $268.70 VCAS = $593.70 total = $59.37 per bag
Buy 28 bags (full pallet) of VCAS, shipped from NC to the Northeast:
- $425.00 shipping, $752.36 VCAS = $1177.36 total = $42.05 per bag
- Savings: $17.32 per bag (29%) or $484.96 total.
VCAS has unlimited shelf life, so there is no reason not to buy a full pallet. Think of it this way:
- Each 175 square feet of 3/4″ thick GFRC should use about 3 bags of VCAS, so 28 bags will make about 1633 square feet.
- At an average project size of 50 sq ft, that’s almost 33 projects.
- A busy shop doing 8 projects per month will use this amount in 4 months. Even if you were doing only 4 projects per month, it would take only 8 months to use this much.
Mistake #2: Spending Too Much Time
Your time is worth money. Spending time driving around buying supplies costs you money. Basics such as office supplies can be delivered free of charge the next day by Staples (or your local office supply store may offer this service). Concrete materials such as cement you will need to put some thought into. Here’s an example:
- The nearest contractor supply store to our shop that sells white cement is 6 miles away. It takes at least 30 minutes to drive there, park, shop and check out, then drive back.
- The store will deliver on a flat bed truck for a $59 flat fee.
- 94-lb bags of white cement cost $24.00 each. 35 bags will fit on a pallet.
- Not adding tax, cost without delivery is $840.00 = $24.00 per bag.
- Not adding tax, cost with delivery is $899.00 = $25.69 per bag, an additional $1.69 per bag.
- An additional $1.69 for 94 pounds of cement is not so bad, and the time savings is probably worth the $59.
This is why we have our cement delivered. If we get 2 pallets at a time, the extra cost is only $0.85 per bag.
Mistake #3: Buying Things You Don’t Need
Boys like to buy lots of toys. That shiny new polisher may look exciting, but do you really need it? Is there a real business justification for it?
The example I like to use is the DS3011 planetary polisher. We do sell these, but we encourage only established concrete countertop makers with high throughput to buy them. Think of it like this:
The DS3011 costs $2247. Do you have a business need for it that will give you a return on your investment within about a year? For example, if you’ve identified that the time spent grinding and polishing is a bottleneck in your production, or if your employees are having trouble keeping a single headed grinder flat and causing quality problems, then you have a business need for a 3-headed planetary polisher. Try to quantify just how much time it would save you. Would it make your projects 10% faster? If you have quality problems, how often do they occur? Every 5 or 10 projects?
Keep in mind that you will also have to buy 3 full sets of diamond pads that you use exclusively on the DS3011 so that they wear evenly. That will cost $370.05. So you need to be reasonably sure that having a DS3011 will save you or bring in over $2600 in the next year or so.
- If it allows you to produce projects 10% faster and you can increase your production from 8 projects per month to almost 9, then you’ve increased your revenue by almost $5000 per month (average project size).
- If it prevents a disastrous quality problem on just one project, it’s saved you about $5000. If those problems were occurring often, it will quickly save you many thousands of dollars.
The DS3011 is sounding pretty good right now, but keep in mind that you might not have the problems mentioned. Your market area might prefer a cream finish, and you hardly ever do any real grinding. The point is to put in the thought to make sure that you have a real, quantitative business need for a piece of equipment before buying it.
If you plan ahead and buy in bulk, manage your time efficiently, and think through a business case for any large purchases, the savings will add up to many thousands more dollars in your pocket.