Help needed with starting a plumbers merchants

[PLUMB111]

I am looking into opening a high street shop dealing in plumbing & heating goods.

I have been in the plumbing industry for many years, so I have had some fair amount of dealings with the public.

I have a good knowledge of all plumbing & heating materials used.
What i am not to sure about is how to go about getting main stock from manufactures, etc.

If there is any help that a up and running plumbers merchants shop owner could give me it would much appreciated.

Many Thanks

 

[unguided1]

where are you going to be based

 

[PLUMB111]

I am going to be based in kent.

I have been a main contractor for national house builders for many years, I buy in bulk from merchants.
But think its time I scaled down a bit & moved in to just selling the goods.

 

[unguided1]

Well good luck with your venture, a bit to far for me to venture to for a coffee and a natter.
regards
Mike

 

[PLUMB111]

Cheers Mike......

 

[365drills]

Hi, Have a word with Nigel at Arctic-Products and he will sort you out with pipe freezing kits, and all sorts for stock.

Website

Arctic Products Ltd,
Baird Road,
Willowbrook Industrial Estate,
Corby,
Northants,
NN17 5ZA,
UK
Telephone: +44 (0)1536 264000
Fax: +44 (0)1536 264900
Email: [email protected]

 

[stevetheplumber]

call me a cynic but i would think youve already scaled down if your main contracts were major house builders

 

[PLUMB111]

You hit the nail on head there Steve....lol
It has started to pick up a bit, mainly HA units.
Are you domestic or site work....?

Thanks for the contact info on Artic Products.

Many Thanks

 

[stevetheplumber]

You hit the nail on head there Steve....lol
It has started to pick up a bit, mainly HA units.
Are you domestic or site work....?

Thanks for the contact info on Artic Products.

Many Thanks

im a what ever comes along man in the last year ive done a refurb in a sports hall 2 inch iron with blow heaters ,domestic boilers, a couple of bath rooms and bit of call out in between
i find variety is the spice of life

 

[Mcb123]

Hi, just wondering if you ever did open up a plumbers merchants? Im looking to do the same thing and was wondering how much money you needed for all the stock.

 

[SteveWannadoGas]

Hi, just wondering if you ever did open up a plumbers merchants? Im looking to do the same thing and was wondering how much money you needed for all the stock.

Would you be able to operate on a sale or return basis?

 

[Mcb123]

A return basis, and boilers would be next day for the time bieng, I would use NMBS companies for most stock.

 

[SteveWannadoGas]

so would you actually have to pay for the stock up front?

 

[Mcb123]

Yes, its on a monthly payment basis for most companies.

 

[Ray Stafford]

Hi, just wondering if you ever did open up a plumbers merchants? Im looking to do the same thing and was wondering how much money you needed for all the stock.

If you aren't planning to stock boilers, and you aren't planning a showroom, you could probably get away with £100k in stock. (Don't forget that will be £120,000 when you come to pay for it).

However, if you buy boilers one by one on a "back-to-back" basis you may struggle to be competitive, and your prospective customers may be tempted to go to a national or larger indie if they are both cheaper and have the stock on the shelf.

Also, don't forget that your suppliers will want paying before your customers pay you - in fact the more successful you are in the early months, the greater the pressure on your cashflow.

I would not recommend starting up a new, single branch merchant with less than £250k in working capital.

 

[SteveWannadoGas]

Also, don't forget that your suppliers will want paying before your customers pay you - in fact the more successful you are in the early months, the greater the pressure on your cashflow.

Is that the case? I`ve never run a merchants but Im thinking of a supermarket business model, where suppliers are paid long after the goods are sold. I think car dealers work this way too.

Here`s some good advice. Before you spend a single penny, identify your market. Who are your customers? Who are your competitors? If there was a gap in the local market wouldn`t TP have already opened up there? Do your research. Its simply essential. Also if you did start a viable business, wouldnt TP move in down the road and undercut you. Don`t want to discourage you, but there are a few reasons why I wouldn`t do it.

 

[joni os]

Is that the case? I`ve never run a merchants but Im thinking of a supermarket business model, where suppliers are paid long after the goods are sold. I think car dealers work this way too.

Only trouble with that model you need to have more financial clout than the supplier and if you have that sort of money just retire.

 

[Ray Stafford]

Is that the case? I`ve never run a merchants but Im thinking of a supermarket business model, where suppliers are paid long after the goods are sold. I think car dealers work this way too.

Supermarkets and car dealers may, but merchants don't. Stock turn in a merchant is much slower than a supermarket, and, unlike a supermarket, your trade customers will often want credit, and will not pay cash.

Stock turn averages approx 5 - 6 times per year so an average item spends maybe 60-70 days on the shelf. If you buy that average item on Jan 1st, it will be due for payment to your supplier at the end of Feb - about the same time, maybe a bit earlier than you sell it to your customer. If you are giving that customer credit, you have to finance that for at least another 30days, and sometimes another 60days plus.

 

[Ray Stafford]

Here`s some good advice. Before you spend a single penny, identify your market. Who are your customers? Who are your competitors? If there was a gap in the local market wouldn`t TP have already opened up there? Do your research. Its simply essential. Also if you did start a viable business, wouldnt TP move in down the road and undercut you. Don`t want to discourage you, but there are a few reasons why I wouldn`t do it.

I would add to this - don't even think about becoming a merchant unless you have worked at a reasonably senior level for another merchant. Its an absolutely cut-throat business, and getting into it without a really serious understanding of it is like sitting down at a professional poker game, in the vain hope that luck will suffice to overcome experience and knowledge.

 

[Stoney Ground]

Excellent advice from Ray, a lot of people will only buy from cheapest supplier.

I used to put about 90% through one national merchant and they used to look after me, people moved on got less good service. So looked elsewhere now Williams get 60-70% of my business and other merchants where I trust old contacts that they will look after my needs.

I'd rather pay a little more for something knowing that if there is an issue it gets sorted.

Anyway but pay my outstanding bill to my merchants.