With the laws of Economics, I will prove in this article, once and for all, that buying by the Bundle is mathematically better than buying by the slab. In order to come to this conclusion we need to compare the 15%-25% savings, to the capital needed to stock slabs. If the increased profit produces a higher return than the cost of capital, then stocking bundles is a better business decision than buying slabs as needed.
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Buying by the Bundle (wholesale) as opposed to by the slab as needed, is on the conservative end 15% cheaper. Make sure to include deliveries in the math, as moving larger amounts of slabs is cheaper than transporting 1 or 2 slabs.
If you as a fabricator, stock 6 bundles of 5 slabs each, that is a total of 30 Slabs. Bundles of basic materials costs around $2,500 each. This means that you need to invest $15,000, to have a granite inventory. (Everest Gives Net30 trade terms, meaning you don&#;t pay for your material until 30 days after you receive it. With trade terms there is no immediate investment&#;)
30 Slabs = 6 Bundles. 6 Bundles X $2,500 each = $15,000 Investment.
A small sized fabrication shop can fabricate 20-30+ slabs a month. Larger fabricators are moving 30-300+ slabs a month.
If you fabricate 20 slabs a month, it means that you will rotate your inventory 8 times per year, or about once every six weeks. If you fabricate 30 slabs a month, it will move your inventory 12 times per year, or once every 4 weeks. The below mathematical proof is based on always having $15,000 of material on hand, meaning that you re-buy as soon as you sell.
This means you move your inventory 8 times per year.
Now let&#;s move to the next step. If you buy 6 bundles @ $15,000 and you save 15%, you save $2,250 every time you buy your inventory.
0.15 (saving %) X 15,000 (total purchase) = $2,250 (savings) If you sell 20 slabs a month, this means that you save $18,000 per year. If you sell 30 slabs a month, this means that you save $27,000 per year.
$2,250 (savings) X 8 (yearly inventory turn)= $18,000 (yearly savings).
$2,250 (savings) X 12 (yearly inventory turns) = $27,000 (yearly savings).
This is the final step in the mathematical proof. Your original investment was $15,000. If you sell 20 slabs a month, your yearly return on investment is 120%. If you sell 30 slabs a month, your yearly return on investment is 180%.
$18,000 (yearly savings) / $15,000 (Principle Invested) = 1.2 , or 120% ROI.
$27,000 (yearly savings) / $15,000 (Principle Invested) = 1.8 or 180% ROI.
Above is a mathematical proof, showing that if you save 15% compared to a $15,000 investment, that you are getting between a 120%-180% yearly return on capital. To put this in perspective&#;
A Checking account, has a 1.1% yearly return&#;.
The Stock Market, Has an 8.0% yearly return&#;.
BUT THIS ISN'T EVEN THE BEST PART
If you buy by the bundle, save 15%, and use 30 day trade terms, you never need to invest a principle. Your company can literally make 15% more on every sale, if you just buy smarter.
If you are a fabricator, and you have read this article, and you choose still to not buy by the bundle, for at least your basic inventory, you are single handedly sinking your business. I understand that customers will not 100% of the time like what you have and that you sometimes need to special order. However, If done correctly, buying single slabs should only constitute a small portion of your overall purchases. Consignment and slab at a time purchases in a back role context are fine, but when consignment and slab at a time purchases are all you are doing, especially with basic material, it is a problem.
Whether you own your home, are a landlord, or a real estate investor currently flipping a property, you understand the appeal of granite and marble or quartz countertops. What you many not particularly appreciate is the cost of a slab or two of granite or quartz to replace your kitchen and/or bathroom vanity counters. Enter pre-cut/prefab countertops, a choice many people didn't even know they have.
Difference Between Prefabricated And Slab Countertops
Prefab
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Prefabricated stone countertops have been cut to certain standard dimensions before arriving at the distributor. The standardized, limited range of manufacturing options can often greatly reduce costs, which are then passed on to the consumer. Thus, if you have a countertop in your home that fits one of these standard dimensions, choosing prefabricated stone will be a much cheaper option than having a slab custom-fit. Installation also tends to be a lot faster, and most prefab stone suppliers even throw in a backsplash for no additional cost.
Slab
These are custom-made countertops created from a single slab of stone. Homeowners can go to a supplier and choose the exact piece of stone they want, and there is virtually an endless range of colors and textures available. Although these slabs are quite costly, no two are alike &#; you&#;re truly getting a completely unique, one-of-a-kind piece of art.
Because your countertop will be cut from a single piece of stone, there will be continuity in color and texture throughout, even if multiple pieces need to be cut and seamed. Seams will also be less noticeable, and you can customize the edge of the stone as well. A slab can also be cut to any dimensions and to suit nearly any project, from islands to tabletops and more. The installation will be slower and more sometimes more costly, as the supplier will need to make a template of the countertop before cutting the stone and if the project is complex, it may take additional time to get the stone into place and secured.
Cost Savings Per Sq Foot
Prefab countertop averages $300 for 108" of stone at counter-depth (25.5"), whereas a slab will run you upwards of $ in materials alone. When your kitchen 107" or less in a continuous length and 25.5" counter depth throughout, you can easily use a prefab instead of incurring full slab costs.
Best Place to Use Prefab
Galley and Single-wall Kitchens, Small Kitchens, Outdoor Kitchens (covered). These are typically 25.5" wide and less than 107" long, making install a snap, with no seams to hide.
Double sink bathroom cabinet counters. The install team will remove 4" from the back edge to use as a backsplash required for code compliance in most places.
Installations
You will still need to find an installer to cut sink holes and make appropriate cuts, possibly re-polish an edge or create a nearly invisible seam. This will add to your costs, but not quite as much as custom slab work will.
Kitchen Islands
In the case of a seamless center island (over 25.5" in width on a single plane), the prefab won't make good sense unless you simply don't mind a seam.
Counter Lengths Over 107"
In the case you have a 107"+, a seam can be hidden easily at an apron-front farm sink, for example, so two pre-cut slabs will work, and still considerably less expensive than a full slab. But if the seam is in a prominent place, you'll probably want to opt for the custom slab or just make peace with the seam.
When you're ready to purchase new countertops Surplus Building Materials has everything you need from granite, quartz, and marble options all ready to be seen in our huge warehouse!
Are you interested in learning more about Slab Distributor? Contact us today to secure an expert consultation!