Combat Volatile Electrical Material Costs with PataBid Quantify
Updated: 3 days ago
There’s no denying that the last two and a half years have been a tumultuous ride for most people and industries. One of the industries that continues to be plagued by challenges is construction. The construction industry faced numerous challenges early on in the pandemic such as labour shortages, rising material prices and supply chain interruptions. Rising inflation and interest rates have now compounded these issues, making it increasingly difficult for small contractors to make a profit and exposing them to greater risks. In a recent survey in the US, 32% of small business owners reported that they will likely have to close their doors if inflation continues on it’s current upward trajectory. On the Canadian side, the Canadian Federation of Independent Business (CFIB) reports that only 54% of businesses are back to pre-pandemic sales and 1 in 6 businesses are considering closing down for good.
In our day to day operations at PataBid, we talk with a lot of electrical contractors. Volatile material pricing and availability continue to be a theme that come up in these conversations as the biggest risk factor to contractors. The fluctuating tendencies of the price of copper over the last year specifically have driven all types of electrical material costs up. Copper prices have gone from $4.23 US/lb a year ago to $4.94/lb in March 2022, $3.25/lb in July and most currently, $3.59/lb. Add to that resin shortages, political green initiatives, increased transportation costs, major world events and there is a definite sense of uncertainty within the electrical contractor community.
Given these conditions, what options are available to electrical contractors to mitigate price fluctuation risks when bidding and completing jobs? Here are a few places to start:
- Using shorter quote validity periods in scope letters
- Pre-purchasing common items (ex. Wire spools in common sizes) if possible
- Investing in estimating software with a built-in pricing service to ensure accurate job quoting
There are many electrical estimating software options on the market. PataBid Quantify has the added benefit of being an electrical estimating software for small contractors. The features list is long, and includes public tender searching, graphical takeoff, excel exportation and an extensive pricing module just to highlight a few. Quantify estimating software is tailored to electrical and mechanical contractors, but for the purposes of this blog, we will discuss the pricing features using electrical job examples. The same features apply to mechanical material costs though.
In this post, we are going to delve into the comprehensive pricing module that exists within Quantify’s estimating software for electrical contractors. There are three ways to get your material pricing within Quantify:
1. List price
2. Contractor price
3. Job specific price
Let’s unpack each option fully. Using the market list pricing available in Quantify, an electrical contractor can simply complete their graphical takeoff, and pricing will automatically show up in a material list. This pricing represents market rate for common items – copper wires, switches, etc, and is collected from a variety of sources. This pricing is updated monthly. Quantify will automatically notify a user of a change in price for an item right in the estimate. The most common use for this type of pricing would be to complete change orders and/or to show a client. The list pricing numbers will not represent any contractor discount.
Next let’s discuss contractor specific pricing tools. Let’s first examine supplier profiles in
Quantify. A user can create specific supplier profiles, depending on the number of companies they generally source materials from.
A supplier profile allows users to select electrical materials from the PataBid database and export that list of items to excel. That excel list can be scheduled to be automatically sent to the designated supplier, who can then fill in the template and email back to the user. The user then simply has to drag and drop the excel list into the pricing module in Quantify and voila! The user’s pricing database is updated with the most current contractor specific, electrical material costs.
Typically, a contractor would not request pricing for all items in the Quantify database, as there are currently 35, 000 of them. A user would request pricing for common job items such as wire, switches, finishing items, hardware, etc. It is also possible for a user to go into their pricing database and modify pricing, even after supplier pricing is inputted. Sometimes there will be an instance where a job specific quote is needed, you can then override the pricing from the database in the estimates summary screen, allowing total control over pricing.
Supplier profiles are also handy for contractors because you can save important details in them such as account numbers and basic contact information. You can also make an unlimited number of profiles, if you deal with more than one electrical supply house.
Want to make sure you have your most current pricing on items you use most often on job sites? When you create your supplier profile, users have the option to schedule how often their excel material list is sent to the supplier. There is a bi weekly, once a month, every two months or once a year option. The email is sent automatically from Quantify with the excel list attached and the user is cc’d. Once the supplier responds with the completed excel template, the same drag and drop process inputs that current pricing data into the Quantify database. Through this simple automated feature, electrical contractors are guaranteed to have the most current electrical material costs available to bid jobs with.
Moving onto job specific pricing. Once a contractor has completed their graphical takeoff, they will want to ensure they have a quote for the electrical material costs of that job. Quantify simplifies this process dramatically. Within the software, a contractor can easily export a bill of materials to excel, making it really simple to email to an electrical supply house for a quote. Depending on the type of job, a contractor may use contractor specific pricing only, job specific pricing only, or both sets of features in order to complete an estimate. For example, if a contractor is bidding a job to replace all electrical panels in a high rise condo tower, they may choose to use both contractor pricing and job pricing to complete a bid. If the contractor’s pricing database has been updated with current supplier pricing, then he/she could use those numbers for pricing wire and miscellaneous materials. The contractor would then send a bill of materials to an electrical supply house for a quote for items such as breakers and panels. In this way, Quantify electrical estimating software gives contractors the flexibility and the tools to get the most accurate pricing possible.
In conclusion, PataBid cannot take the risk out of bidding and running a contracting business in today’s world. However, we are here to help limit that risk by providing a thorough electrical estimating software for small contractors. A software that has been designed and built from the ground up to include powerful pricing tools that can adapt to today’s electrical material cost volatility. To book a demo, connect with us today. Or check out PataBid’s LinkedIn channel for product videos, info and up to date information on the electrical industry.