Contractor lying to me about price of materials

[Stouffer123]

Is it normal practice for contractors to lie about the price of materials? I’ve got a contractor putting up some fencing for me, it’s costing a large amount in total. The agreement was I would buy the materials and get them delivered to me and then I would ‘own them’. He ordered the materials through his trade account and he gave me the price but when I rang up the merchant to pay, the price was significantly lower (about £300). I queried this with him and he said it was an ‘error’ but when I rang the merchant back they told me it was a trade discount. I wasn’t aware of this so feel a bit silly. I just paid it because I didn’t want to cause a fuss, but am I being unreasonable to feel that he lied to me about the price? Is it normal for contractors to do this or is it normal for them to pass the saving onto you. Just want to know if I’m being taken for a ride.

Yes he is! The only reason I’m asking is because I’m having some different work done with a different contractor and when discussing materials he instantly told me to buy them at this particular merchant because he gets trade discount - I was like ok wow. I think my other guy was dodgy, he even asked me to pay the money into a different account from his business account, I think it was to avoid tax

The merchant is honouring his trade discount (he spends a lot of money with them, week in week out!) and charging you the retail price.

I suppose if you just send TRADE PLACE. £400 then it just goes onto the man's account where he pays the bills from.

I'd not be happy if the price paid for goods/delivery was more than I'd pay at say wickes myself assuming identical supplies.

He’s getting the difference into his trade account

I think my other guy was dodgy, he even asked me to pay the money into a different account from his business account, I think it was to avoid tax

Now this something that really annoys me- thieving bastards- sadly, it's widespread and most want paying in cash to dodge tax. I once said I didn't want to and wanted to pay into their business account and he upped his quote by 30%! I didn't use him in the end.

Have you priced up the things yourself in that shop to see what the price would be including delivery for Joe Bloggs? There are also prices with and without VAT to consider. If you can get the same things delivered for less than he has charged you by shopping around then discuss it with him. But bear in mind the quality of fencing stuff is quite variable.

So you paid the retail price, so
you didn’t actually pay over the odds?

Can you cancel the order, or put it on hold and shop around? If your contractor told you that it would be cheaper then I'd expect you to only pay the discounted price.

Contractors will often put a mark up on matériels but you should have shopped around before agreeing to his price

It is normal. Some do let you use their trader's discounts which is nice of them but they do not have to.
Unless you are paying higher than normal retail price, then it should not really affect you as such.
He has a trader's discount because he is more likely to buy lots of material from them so they give him a discount as an incentive.
He is not required to pass on the discount to you if he does not want.
Edited to add: Of course if you are not happy with this or the prices, you would be allowed to shop around. You can easily cancel the order and shop elsewhere. ( unless of course too much time has lapsed. In that case you will have to go through with it most likely if you did not want to lose out as you may incur charges. )

He isn’t dodgy, he isn’t under any obligation to pass his trade discount on to you.

I prefer to be open and honest in business. I provide clients with the receipts and charge them exactly what I paid. That way they can see the benefit they’re getting from using my services because I get them a discount. I do also charge a fee for my services and that’s where I make my profit.

Some other companies add a margin onto the supplied materials and pocket that in addition to their fee. It’s not dishonest as such - just deceptive. The client thinks they’re paying the business less than they’re actually paying. So it gives the illusion of being cheaper.

Usually when they do this it’s because the client would be horrified to discover how much the business actually pockets. Way more than they would consider it reasonable to pay. It’s easier to swallow a £500 fee plus £500 added onto materials that you don’t realise you’ve paid. If the materials were charged at cost price and the fee was £1000, clients would think it was extortionate and refuse to pay.

My builder passed on any discount to me in a win win situation. He wins because it goes through his trade account, the more he buys from the builder's merchants to more discount he gets in future. It was a win for me because the materials were cheaper through him and he invoiced me separately for his labour. Everything clear and above board, no pocketing extra money. Also makes them a very trustworthy builder.

This means in future I recommend said builder, he isn't arsed about making extra money from materials, just does his job for the labour he provides. It also means when I do recommend him I pass on his day rate figure, the customer can price up materials and work out how much a job will cost. Same for me and my plasterer and electrician, day rate and separately, materials.

but you are paying ? direct?

where is the scam?

It's not open and honest so it would definitely put me off, whether he's 'entitled' to keep the difference in price or not

All trades make money on materials! It's not dodgy at all. They will increase their labour rate if there's no margin on materials.

It's a basic business principle. How much do you think the store bought the fence panels for? They add a massive mark up before selling at retail price.

Adding a margin to materials sourced is not unusual, though being misleading about it is not

However, the risk with sourcing materials yourself is that if the materials are delivered late its on you, and you'll end up paying for the contractors wasted time. At a day rate of £3/400 one wasted day will soon offset any of the material savings. Likewise, if there are problems with the materials delivered, either when they are delivered or later then its also on you if you sourced them. If the tradesperson supplies the materials and fits then any issue is their problem to resolve with their supplier, and the consequent labour cost impact is also on them. I am always happy to pay a bit extra for that convenience. Only you can say if £400 is a reasonable price for that - how much is the total job costing, labour and materials?

“he stopped me shopping around”

No he didn’t!!!

Think of it this way. Your price was what you were quoted by the supplier, and what you paid. No scam. Your fencer got a “commission” from the supplier, for putting business their way.

Presumably you sense checked the price before agreeing? It’s not hard to google fence prices quickly.

There's nothing dodgy here at all.

The discount is his for the volume of business he is doing. That's the margin he makes.

If you had not used his account you would have paid the full price anyway.

Try going to any supplier and asking for a Trade discount when you're not a trade. You won't get it.

It is reserved for tradespeople bringing regular business to incentivise them to use that supplier.

I am typing this as my partner left for work 45 minutes early to go and order some materials for a client. The materials will be delivered to the client's house but my partner still spends time to do the calculations and put the order together. Nobody is going to pay him for that. Nobody is going to pay him for hours it takes him to put a large quote together either. Trade discount is his, not the client's and allows him to recoup some of the admin costs of running the project.
Next time, order your own materials, I guess.

OP- is this normal
Everyone- yes
OP- doesn't seem normal to me

That's not how trade accounts work. He won't be receiving credit into his account, it is just that you, as a consumer do not get the same discount that he should get.

And this tbh.

The point here is when the goods pass into your ownership, not how much you pay for them.

We have been having a lot of work done at the moment. When we buy the materials ourselves (in this case paint) we organised the whole purchase ourselves, driving several miles to the nearest Brewers and standing there ordering it all and bringing it back for the guys to use.

On other things our builder has organised it and I expect we are paying extra for him to do so.

Don’t be silly - it’s not dodgy!

a builder can either chose to pass on his discount or not. They ask have different pricing strategies. They need to build in their time and profits into the price in some way.

some are more expensive than others. There is nothing illegal about choosing not to pass on their trade discount.

My brother is a builder. He has awful problems with some clients who don’t understand how to pay for services - who believe they shouldn’t be paying for skilled workers time.

if you are unhappy with the overall price of the work you shouldn’t have employed this specific builder.

you can’t expect to use all his trade discounts if he is not benefiting at all from it. You will find people boasting about using their builder or decorators trade discounts have been charged elsewhere for that benefit. There is no such thing as a free lunch - people just like to feel special and that they have got one over on the system or on the person they have employed. Most tradespeople know this so play along