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For the past ten years, direct-to-consumer (DTC) metal building providers have grown in popularity. Many contractors in the metal building industry hate DTC metal building suppliers because they see them as a threat to their business. But in my opinion, they do more good than bad for the metal building industry.
Here is a summary of what DTC suppliers do better than traditional contractors, what they do worse, and why they provide more benefits than threats to metal building contractors.
DTC metal building suppliers, like every DTC product, do a better job marketing than the vast majority of contractors by advertising aggressively across all platforms. I remember when I first heard a radio ad for General Steel Buildings a little over ten years ago. It advertised constructing a building for half the price of conventional construction. As a metal building contractor, I obviously took notice. Still, the claim, “a building for half the price of conventional construction,” captured the attention of many business owners who were in the market to build.
General Steel was one of the first DTC players, but today there are many. If you Google metal buildings, the page 1 results will all be DTC providers. Even when you refine your search criteria to a location, DTC providers still make up a good portion of the page.
They market on social media, use YouTube Pre-Roll, and you might still hear a radio ad occasionally.
As contractors, most of us are behind the times. “Word of mouth is the best marketing.” And while it may be true that word of mouth provides the best clients, if we are talking about the pure volume of leads, aggressive marketing campaigns will always win.
DTC suppliers fall short in a lot of other categories. First and foremost, they paint a partial picture for the customer. They sell you one component of the building project. Typically, they do not provide pricing for the erection of the building, site work and foundation prep, or architectural services required to obtain a building permit. In some cases, they still need to provide the price for the building insulation.
For example, let’s say you want to build a 50′ x 100′ metal building and go to General Steel and price the building through their online quote system. The price of the building will probably be around $45k, including the metal building insulation and some man doors.
At first pass, this may seem like an attractive offer. Less than $10 per square foot for a building is fantastic!
But the cost to erect the building is $30k. The cost to complete the site work & foundation prep is $70K. And you have to pay an architect or engineer $5k to complete the drawings required to get a building permit. So the actual cost of the building is more like $150,000.00 – or $30 per square foot.
I have seen owners buy a building without researching the other construction costs and end up having a building sit because they cannot afford the entire project costs.
Construction is still a relationship business. You need relationships with local contractors to complete the work on-site. A DTC metal building supplier will not be able to assemble a local team to construct your building, contrary to what they tell you. Contractors and subcontractors, in general, are cautious about who they work with. They prefer to work with local companies with whom they have a track record. Many will not even provide pricing to out-of-town contractors; if they do, their prices will be very high.
You need relationships with code officials to get a project through the permitting stage. Code enforcers and building inspectors want to work with contractors they know and trust. Most of the time, you still have to go to the building department to obtain a building permit. They want to talk with you and review the project scope. A DTC metal building supplier can’t do this over the phone.
Most people who start searching for a metal building online eventually talk to a local contractor like me. When somebody is going to drop $50,000+ on a building, they start asking friends and business associates if they have any experience with metal buildings before they buy, which ultimately leads them to someone like me.
I used to cringe when somebody told me they had been shopping for metal buildings online and would like me to provide a price. Now I view it as an opportunity. When I have the chance to sit with a client, I know they will walk away with a better understanding of metal building construction. They may not buy from me, but they will know much more about metal buildings than they probably ever wanted to.
More often than not, they realize they are in way over their head trying to buy a building online. They may save a few bucks on the building cost, but they realize they need a trusted partner to guide them through the entire process, and they ultimately decide to build with us.
It’s easy to dog DTC suppliers, but many customers would not even know what a metal building was if it wasn’t for companies like General Steel. Exposure to our industry is always a good thing.
DTC suppliers are easy to sell against. They are a one-trick pony, and once we have the opportunity to sit with and educate our clients, they typically choose the local contractor, not the DTC supplier.
Also, let’s not forget that DTC suppliers weed out a lot of unqualified prospects for us. Even though DTC quotes are not all-encompassing, if a customer is not willing to buy at DTC price points, they will definitely not buy from a contractor. As contractors, our estimating resources are limited; we want qualified prospects, not people just kicking the tires.
So let’s stop fighting against DTC suppliers. Right now, we can use them to our benefit. The bigger question, a question for a different blog, is where do we see DTC going in the next ten years?