Are trade discounts really a saving?

[SusannahSu]

Hello,
We are having a house renovation done and struggling with increasing costs. The builder suggested they get the kitchen, bathroom etc using their trade discount. This sounded good until they slap VAT on top and then it seems to become potentially pricier than we could source for ourselves. This is our first ever renovation and so I wanted to check I am not missing something?!
Thanks

It depends. If they have preferred suppliers that are more expensive than what you can source then yes, you are not getting any advantage. But if they are using suppliers you would any then presumably you would get a discount.
Most trades will buy with their discount but may well charge you retail - that's normal too. I've used trade discounts at my normal suppliers (Travis Perkins for example) as I'd be using them anyway for supplies.
But for things like bathrooms, because I can shop around online, I can usually get it much cheaper than the trades can as they have (often physical) suppliers they use over and over. I was once told they could never match online prices.

Trade pricing in places like Screwfix etc are listed as ex-VAT as they can claim the VAT back unless they have some special pricing - but I’m surprised they’d be offering you discount essentially as they wouldn’t be making any profit?

Retail prices have to include VAT as they are for consumers so if the trade price + VAT is not the same or lower then go ahead and buy things yourself.

Where it can be beneficial to use a trade supplier is that usually someone there does the ordering and they'll often hold items in their warehouse so you get one delivery. They also have access to lead times. It's in their interest to push you to use their preferred suppliers because they get bulk buying discounts.

The trades use physical suppliers nearby who hold stock. If there’s an issue or defect or missing part, they send a lad in a van to get it sorted. And places that hold stock in situ have higher overheads.
Yes you can do it cheaper, but returns etc all cause delays and any trade worth their salt will rightly bill you for labour on days they couldn’t work because you’re faffing around with couriers for an online supplier based 250 miles away. All to save £100 of whatever.

You can always get things cheaper by snooping around on eBay/clearance/local skips, however it might end up being a full time job for you.
The good thing about trade discount is it's a one stop shop for you and the builder is doing supply and fit so if an item is faulty or missing parts they can't change you twice for fitting (unless it's in the contract eg you are paying day rate)
Regarding vat you will pay vat as you are a consumer, so whether the builder collects it or the retailer collects it you won't really save anything there.

Thanks for all your responses. The builders are getting a little grumpy about us potentially ordering bathroom things directly as “we’re just being honest when we say we have factored our profit into the prices we quote”. Considering they have already factored their profit into the separate installation fees and can only order from Travis Perkins, I am doing my own thing if theirs ends up being pricier once 20% VAT is added on.

We always choose our own fittings, kitchen and bathrooms, because we’re choosy about what we have!!! Getting run of the mill kind of unis and bathroom fittings for us. I would insist on having what you want. Not be limited to a single builders merchant! It looks to me that they expect a profit on the sale to you. Just but decent kitchen unis and bathroom fittings. There are numerous budget ranges.

Why would you be happy to make your builders grumpy, presumably it feels to them like a negotiation tactic to change the goal posts after they've quoted. Perhaps ask if they can requote based on labour/fit only rather than supply and fit?

Markup on supplied items is totally normal and it covers things like admin and getting the materials on site and dealing with any issues either at the time or later. Also it covers against it being total tat.
If customer supplied items turn out to be tat or super complicated, they don't want to have to work out how to get it to fit or argue about who pays the lost/extra time.

Who has the builders kitchen though? We never have! They quote for fitting my choice. Ditto bathroom. What’s in the quote OP? The whole kitchen etc or just fitting? If just fitting, get what you want.

We're having a new bathroom fitted at the moment. We are getting many of the fittings from the plumber's trade supplier and benefitting from his discount. There are a number of other things I've bought separately, eg shower, taps, led mirror and lights because I could buy better quality elsewhere. In the past decorators have allowed us to order paint on their accounts and get their discount. A lot of trade paint is much better than the standard retail stuff and expensive so it's worth getting the discount.