Quick Note
This entire post has been written with the prefabricated steel tube-frame buildings industry in mind. Red iron AKA L-beam structures have a completely different sales and distribution process. I’m going to work on creating a post specifically for that industry in the future, but I need to learn more about it first. My experience, for the most part, ends with tube-frame buildings.
Common Concerns
I was just browsing another forum and read about where someone was currently at in their buying process, and it reminded me of dozens of other experiences I’ve heard/read about. The problem in question is wading through the hundreds of dealer/broker companies and getting to a manufacturer. Many people worry the dealers are charging them 20-30% more than the manufacturer would. They want to avoid a middleman and go straight to the source. Going through a middleman just has a negative connotation. Rightfully so, in most industries, that means you’re going to be paying more for the same thing and have no warranty. It’s also harder to verify a middleman is a real company with good intentions. However, that’s not always the case in the tube-frame AKA prefabricated steel building industry.
The Problem With Avoiding Dealers
If you are shopping for a structure, especially a big building, it’s common to want to see other buildings by the manufacturer in person. You want to get an idea of any defects that may end up on your structure. Display buildings should be the best of the best, after all, and give you an idea of what the manufacturer can do.
If you are shopping for a metal building in North Carolina, where the entire industry began, traveling to a local manufacturer might not be a big deal. However, if you are in the Midwest, where manufacturers are few and far between, you are going to have to be willing to make long drives to speak directly with manufacturers.
You may have thought about skipping out on a more well-known manufacturer with a good reputation, in order to go with a manufacturer that is local. At the end of the day, the only thing you probably really care about is whether your building turns out good or not. If that's the case, you should choose the best manufacturer that is within your budget, whether they are within driving distance or not.
Buying From a Dealer vs Buying From a Manufacturer
In the tube-frame industry, dealers do not apply any kind of extra fees or markups. The buildings they sell are sold at the same price you would pay by going through a manufacturer directly.
Whichever route you go, the manufacturer will be the one handling the installation and backing the warranty.
Advantages of Going With a Dealer Over a Manufacturer
Interestingly enough, it can actually be cheaper to go through a dealer. Manufacturers survive by having extremely large dealer networks, and they do not want to compete with their own dealers. Therefore, a manufacturer will not go lower than a certain price, less any current sales, which the dealers also get to use at no cost to them. A dealer can go lower than the manufacturer's price by taking a profit loss right out of their own commission. Of course, not every dealer is willing to do this, but many are.
Online-Only Dealers and Their Benefits
Online-only dealers are dealers with no sales lot and no office that is open to the public. Now that is bound to sound alarm bells and sound suspicious to most people. If you can’t go visit them, it's tough to determine legitimacy.
Shockingly enough, going through an online-only dealer might be one of the best things you can do.
The biggest (only?) advantage that online-only dealers have over dealers with physical sales lots, is that they are bound by no exclusivity contract. Almost all dealers that have display buildings on their sales lots are bound by a contract with whatever manufacturer provided their buildings to sell through no other manufacturers. This makes sense. The manufacturers provide tens of thousands, sometimes hundreds of thousands, of dollars in buildings for the dealers to show off to shoppers in order to sell buildings. They don’t want them selling through any other manufacturer. Since online-only dealers are not required to sell only through one manufacturer, they can provide you with multiple quotes from different manufacturers. A good dealer will do this for you and explain the benefits of each manufacturer.
Avoiding Bad Manufacturers, Bad Dealers, and Scams
In this industry, you need to be cautious. Whether you’re looking for a dealer or a manufacturer, I’d highly recommend finding out what state they are HQ’ed in, even if it’s just a home office (if it’s a dealer). Then, I’d try searching the corresponding Secretary of State’s website to ensure they have a valid business. This will also give you an idea of how long they’ve been in business. After that, I’d recommend checking Google for real-world experiences. Finally, I’d check the BBB just to ensure they don’t have any complaints about them in recent history. Usually, Google reviews are plenty to get an idea of a company, but it doesn’t hurt to check other places.
If you’re thinking about buying from a dealer, always find out what manufacturer they are using. After finding out, you should call the manufacturer to verify the dealer isn’t trying to pull a fast one on you by inflating prices, and that they are actually a dealer for them. If the dealer doesn’t want to tell you, that should be considered a red flag, and you should move on to the next company.
Final Thoughts
Whether you buy directly from a manufacturer or go through a dealer, it really doesn’t matter. Think of dealers less like middleman, and more like outsourced sales teams. It’s the same price. The manufacturer is still going to be the one handling the installation, and all warranties will go through the manufacturer. Going through a dealer is a great way to support a local-businesses at no additional cost to you.
Disclaimer: The information shared in this post is based on my personal experience and knowledge gained from working in the industry. While I strive to provide accurate and helpful insights, I encourage readers to conduct their own research and consult with professionals before making any decisions.
