Recessions may mean hard times for businesses, but they also are mothers of invention. Entrepreneurs head for their garages and workshops, and business types get busy thinking up new ways to compete. Frederick Cann, a residential and light-commercial contractor based in Medford, N.Y., has done that, and come up with www.BidForMaterials.com, a kind of dating service for contractors and suppliers.
“During this recession, all us contractors have done nothing but scramble for work, and the way to get more work is to be more competitive and manage money better,” says Cann, now president of the enterprise he and two partners quietly launched in October. “I started thinking about construction materials and pricing, and I reached out to the Internet to see if there was a buying program. I found buying programs for cars and appliances, but I found nothing for the general construction industry, so I developed the website. All it does is connect suppliers and contractors.”
It is a simple concept and the business model seems to be simple, too. Contractors pay $50 a month for an annual subscription to join the system. Suppliers use it for free. Contractors post their bill of materials and invite suppliers to bid. Suppliers and contractors can open a dialogue through the site to exchange additional information. When they have a deal, the contractor clicks a button to “accept bid” and then conduct the rest of the transaction as usual.
But the business plan behind Cann’s project is a good bit more elaborate. The goal is to line up a sales agent for each state and divide each state into regions, with a subagent for each region. The plan is to sign up at least three suppliers for every major building product category in each region to ensure competitive bids. “We have 37 states covered,” Cann says. “But we are still looking for salespeople, and we are open to subagents in any region. The more the merrier.”
Cann’s now has four partners: a developer, a real estate agent, a commercial contractor and a plumbing contractor.
In the first three months 728 suppliers have signed up, Cann says. The company plans to launch its marketing program to contractors at the International Builders Show, in Las Vegas, on Jan. 19. But even without marketing, 42 contractors who happened upon the site have signed up for the service, says Caan.