By Scott Bieber, Business Development Manager for the North East
In the commercial roofing industry, the contest between timeliness and quality verses cheaper material occurs in several ways:
- PVC vs. TPO
- XPS vs. ISO
- Custom-fabricated in the factory vs. field-fabricated
- And so on…
Contractors and salespeople alike are so accustomed to looking for ways to reduce the up-front cost of materials that the huge cost of delay is often forgotten.
The average McDonald’s store brings in $2.7 million in sales revenue a year, or approximately $7,400 per day. The average Chick-Fil-A generates $4 million in sales revenue a year, or roughly $11,000 per day. Average Home Depot Stores sell over $50 million in products and services per year, or nearly $140,000 per day.
Now, imagine being the manufacturer or contractor that causes a delay in the opening of one of those stores by hours, days, weeks, or months. The loss of revenue to the owner or franchisee would be devastating.
In real terms, if the restaurant owner spends a few extra dollars on PVC instead of TPO or Dupont XPS Styrofoam instead of ISO – maybe 10-20 percent more – it might let them start generating income much earlier. That’s because the lead times for PVC and XPS are far shorter than TPO and ISO. That’s not even mentioning their better performance.
In the case of Chick-Fil-A, opening the store 30 days earlier means additional sales revenue of over $300,000. That extra $1,500 they spent for Duro-Last® membrane might be the best investment they will ever make…and it’s tiny compared to the six-figure dollars they gain!
Money works the same way in the public sector. Funding for capital improvements on schools, government, and other public buildings often requires adherence to strict timetables. The funding can be lost if not spent within a particular fiscal period. For this reason, the delay is intolerable on those projects, just as it is in the private market.
A Duro-Last contractor in New England was recently given a large change order to upgrade from ISO insulation to XPS on a tapered system. It amounted to a $30,000 increase over the ISO that was bid on this mid-sized municipal project. It was agreed upon so the roof could be installed during the summer of 2022 instead of spring 2023. The city would have lost the funds otherwise. Delay was not an option.
We need to remember that delay comes with a considerable cost. By investing in roofing materials with shorter lead times – even at reasonably higher prices – lost revenue or funds can be avoided. And the roof will perform better in the long run!