Q & A Episode 24 - Why You Shouldn’t Let Your Clients Buy Direct with Guest Brad Robinson
Episode #24 | Q&A with Mark D. Williams | Why You Shouldn’t Let Your Clients Buy Direct with Guest Brad Robinson
On this episode of the Curious Builder Q+A, host Mark Williams is joined by Brad Robinson of Bradford Custom Homes. They discuss a hot topic in the builder industry: direct buying. They’ll go into the details of their own experiences with clients direct buying, the pitfalls that come with it, and why they have a different approach. It’s an insightful episode into why you shouldn’t let your clients buy direct, even if on the surface it seems like a better deal for them—because it can compromise your entire project.
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The host of the Curious Builder Posdast is Mark D. Williams, the founder of Mark D. WIlliams Custom Homes Inc. They are an award-winning Twin Cities-based home builder, creating quality custom homes and remodels — one-of-a-kind dream homes of all styles and scopes. Whether you’re looking to reimagine your current space or start fresh with a new construction, we build homes that reflect how you live your everyday life.
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Brad Robinson Bradford [00:00:00]:
If a client says to me, you know, I've been down this road a couple of times, I've built a couple of custom homes and I have a few experiences of my own to share that I'm not going to listen. I absolutely, I'm all ears. I want to hear and I'll have a good, I'll have a good conversation and take into consideration anything someone wants to tell me. I think that's why I think people like working with us. We're kind of easy to work with.
Mark Williams [00:00:32]:
Welcome to Curious Builder Podcast. I'm Mark Williams, your host. Today is Thursday. It's our Q and A and we got a special guest in studio. We have got Brad Robinson from Atlanta, Georgia with Bradford Custom Homes, a past Monday interviewer. And Brad and I were chatting as we often do on an early morning walk or run, and the question came up was, why don't we let our clients buy things direct? And so Brad had a great story that I feel like this happens so often with builder. So I wanted to bring him on and have him share his story. Then he and I will chat a little bit.
Mark Williams [00:01:02]:
Brad, we're just going to answer one question, so let's get right to it. If people want to listen to your episode in the past, they can check 20 episodes ago and you get the whole story on Brad and who he is. But why don't you share that story we were chatting about of basically why custom home builders not only should not allow our clients to buy appliances or buy lighting or buy plumbing or buy tile, which seems to be the top four that they try to angle for because they don't want to pay us a GC margin on it. I loved the story that you gave when your client asked you this question.
Brad Robinson Bradford [00:01:30]:
Yeah, it's a funny story, right? We, I think as builders, as business people, we want to try to be as accommodating as we can be with our clients. We want to meet them where they are. We want to try to help them find savings and add value based on who we are. But at the same time, we have an obligation to deliver a product and the safeties, the security, all the pieces that go into it. And we had a recent client do this that you were talking about. We're coming off of Black Friday and essentially he had found a couple deals and he reached out via email and said, hey, look, I was able to find these amazing deals on this lighting from XYZ Place & Place doesn't really matter. It just came down to, hey, I bought these things. And then he said the same thing about the appliances.
Brad Robinson Bradford [00:02:24]:
Like, I found this amazing appliances. And I'm like, okay, I get it. I can completely understand where he's at. So I call a quick meeting with my designer and I ask her a couple of questions. I'm like, hey, look, what did you make of this email? What was your response? Because she had already gone into trying to figure out if she could help the client. Okay, let's assess what you did here, because it's already done. So we didn't want to approach the client in haste and not understand what had happened. So the first things we asked ourselves were, are they from one of the vendors that we know and trust? We had to assess whether the quality was going to compromise our overall project and the indemnification aspect of that.
Brad Robinson Bradford [00:03:09]:
Right. If you buy a. I'm. I don't mean to say Chinese in a negative sentiment, but we know that there are places where you can go and save. But maybe the internal wiring isn't up to what our UL standards are. And so as a builder, I own making sure that house doesn't burn to the ground while I'm building it, which is my primary focus. Then the second component of that was, is I asked her to make sure that they were sized properly and that the lumen output was going to give us the candle light that we needed to have in the areas that they had chosen lighting for, because we run into issues. Where is the house lit and do we have issues with that? And then back to that sizing component.
Brad Robinson Bradford [00:03:49]:
Is it proportional to the room size that where that fixture was being placed? Um, and take for. And take into consideration at this point, the client has gone through a very extensive pre construction process with us and has paid my designers to do all of this work and had beautiful mood boards with SKUs of different options. They had gone through the selections process to where maybe they were. We were 90% done with the selections, but just leapfrogged right over that and made these things or made these choices. I had the difficult task of reaching out to the client and saying, hey, look, I may not have done my job well enough at the onset of the project and explaining where you can and cannot contribute from a purchase perspective. And I said, look, I typically will become a little bit more liberal with appliances. I get that it's a large percentage, but typically I still would like for you to purchase through my vendor so that they can perform the installation and I can rest my head on my pillow at night knowing that all of these appliances are going to be stood by that manufacturer, by that vendor. They're going to test them properly, they're going to install them properly, they're going to ensure that they're working properly and that my team doesn't have to go back in and spend a tremendous amount of time or effort to do that.
Brad Robinson Bradford [00:05:05]:
I gave him the reasoning why and he was apologetic and I didn't want him to be apologetic necessarily. I understand why he did it, but at the end of the conversation he's. I completely understand the process that you have in place, let alone chain of custody. Right. I just completely bypass that. But we have a process internally where we buy a lot of nicer fixtures from visual comfort. And regardless of where these things are coming from, oftentimes we're tasked with checking these into the warehouse, opening the box, ensuring that there's a complete part list inside of the box and that there's nothing damaged with these. And then the chain of custody goes from our warehouse to the job site just in time to prevent any kind of mix up.
Brad Robinson Bradford [00:05:49]:
I see a lot of builders, I walk into their projects and there's $50,000 worth of lighting fixtures in a garage where people are frequenting in and out. It's the only. All the construction traffic's moving past. What these people don't even understand or perceive is the value that's sitting in that garage. So we have a process that bypasses all of that. And after explaining that he was like, now I completely get it. And I just, I wouldn't have done that had I known. And I realized in that moment I failed to give him that explanation.
Brad Robinson Bradford [00:06:18]:
We oftentimes it's our internal process, but we don't share it to that kind of granularity to the client. But we should.
Mark Williams [00:06:27]:
And I think it's part of the story. I think the one thing I would say about that is there's lots of things we don't share with the client. Not in a negative way, but they're hiring us to build their home. If they wanted to be a builder, they could. It's a contract with failure, but basically you could spend a lot of time developing that like anything. Now I think when people are curious and want to know, obviously you can read their body language language. And it seems like certain people are more curious about certain aspects of the build than other parts of the build. And I think any business owner has how much do we share versus not share? And for instance, energy performance for a long time, like in our climate, we're starting to do more and more external insulation And I used to always price it out for the client, hey, for $10,000 more you can get this.
Mark Williams [00:07:04]:
And everyone said no. And because they can see appliances, they can see cabinetry, they can see windows or things that they like, insulation's not really sexy. But I don't tell them what kind of 2x4s I'm using or what kind of trusses I'm using. I don't tell them, hey, we're going to do 20, 24 inch trusses on this one or 18, like they don't care. And so my point is there are certain things as business owners and builders, we make the call on this represents our brand. I'm doing it because I think this is best. Now they might buy, hey, I have a quality home. And this is how you get there.
Mark Williams [00:07:30]:
Great. I don't need to tell me anymore. I believe that and I think so. I think you've got to be, you have to be flexible with who you tell your entire story to because some people just don't want to know all of it. And in terms of what this particular question is, I think of some fail stories I've had. We had, we built one for a client once. He was, he owned a tile company which obviously I usually use one. I, I give them like one free pass, like one get out of jail free monopoly card.
Mark Williams [00:07:55]:
And I, I don't offer it unless they ask for it, but usually one, once during a build, someone will say, you know what, I don't want to pay your markup on or your margin up on appliances. And I'll usually ask them why we're going to spend 50, 60 thousand dollars. Why should you make a markup on that? And I educate them. How is that any different than any other thing in your house? Why are you paying me for windows? Why are you paying me for tile? Why are you paying me for plumbing fixtures? And it tends to be a fixture or something that they think they can just buy online. I would imagine this conversation never happened 20 years ago, before the Internet because people had their sourcing directives. But to your point, you have to explain to them. So appliance is actually pretty easy because we. Sure, you show them up on site.
Mark Williams [00:08:35]:
Great. Who's going to bring them into the house? Who's going to unbox them? Who's going to take apart all the shelves in the packing? Who are you going to have, Are you aligning the plumber and the H vac to and electrician to make sure it's wired, plumbed and gassed, hooked up correctly? There's a lot more that goes into just appliances. And yes, some appliance companies include install. No offense to them, but they do a really bad job. I guess offense intended because we usually have our plumber and our H Vac guy there as well. The problem is they make it kind of complicated because if their people don't install it, they. You exclude some of their longer term warranties. So it's almost like they install it, we get the warranty and then our guys will come in and sort of adjust it so it's our quality.
Mark Williams [00:09:15]:
The worst is panel fronts. I don't know if you have an issue of that in your market, but I am like, everything I want is inset, flush, perfect. Because obviously you have to leave that little 16th of an inch or 8th inch gap or whatever it is when they open up the door. The wood doesn't bind on wood shooting. Someone will put it in and then they'll bind the wood. It'll chip up the wood. And now I can't fix that. I mean, if I can, it looks bad.
Mark Williams [00:09:37]:
I could have just avoided all of this if we were involved. Anyway, I've now spent three minutes, explained to them and they're like, whoa, okay. I can see there's a lot that goes into this. And every once in a while they may say, I don't care, I still want to do. I actually had. Just had this recently twice. I had a client that used their one get a jail free card on appliances. And I said, okay, but this is the only one.
Mark Williams [00:09:58]:
And that's. I think each, every owner has to weigh the pros and cons and be like, hey, I'm still building you a two, $3 million house. Or I'm doing. In this particular case was a large remodel. And it's. I think he actually was negotiating this against us in another remodeler. So I was still interviewing for the job. And so I'm like, all right.
Mark Williams [00:10:15]:
This was my. I'm like, okay. I wanted. And. And we do. To your point, like, we want to be flexible. It's not that we. But in order for us to give them a better process, we need to be driving.
Mark Williams [00:10:24]:
It's. It's not like you want. If you're going to complain about. This is actually a great analogy. If, if you're flying an airplane and you're complaining about turbulence, you going to the cockpit and flying the airplane is not going to help at all. It'll be way worse. You can complain about the turbulence if you want, but let the Pilot, fly the airplane. I don't know why in building, it's so common that homeowners think that they get to play builder.
Mark Williams [00:10:45]:
It's almost, it's like they get to exercise this itch. And maybe it's because you're building it in front of them. You don't have surgery or you don't have open heart surgery and then ask the doctor if you can borrow the scalpel, cut yourself open like it's crazy. But building has just always been that way. It's so personal and it's so open. And the good side of it is they're really excited. Nothing means more to you and I, right? When the family, they bring their little kids, they have the groundbreaking ceremony, they come like, the good part of it is great. Somehow along the line, builders thought it was a great idea to let the clients play builder.
Mark Williams [00:11:13]:
And I don't really like that.
Brad Robinson Bradford [00:11:15]:
The Internet, like you said, has changed everything. We have a spectacular build. It's an energy efficient structure. It's an ICF build. And this homeowner had done so much research prior to coming to us, we somewhat knew it. I'm not going to say we looked at it as a red flag, but it was. We said, okay. Being this intensive and wanting to have as much of a say so as we thought they might want to have without having the technical aptitude was going to potentially present some, some challenges.
Brad Robinson Bradford [00:11:51]:
And I've got to say that in working through that process, the homeowner turned out to be an absolute delight. He just wanted to compliment what we already knew. And he was only as interested in providing information as much as we were interested in talking about it. And it's turned out to be a great relationship. He's become one of my favorite customers. And when we were involved, when we were going through the indoor air quality conversation, we were designing the H VAC systems. It's very complex. It started out with massive ERVs zender units at the onset of the conversation.
Brad Robinson Bradford [00:12:26]:
So we weren't having, this is probably a $200,000 H VAC system in this 9,800 square foot house. But do the tonnage math on that.
Mark Williams [00:12:42]:
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Mark Williams [00:12:43]:
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Mark Williams [00:13:16]:
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Mark Williams [00:13:17]:
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Mark Williams [00:13:31]:
Firm.Com there's the big difference here. It sounds like this individual is passionate about what he was doing, but he wasn't asking you to either take a big haircut, I'm guessing. Nor was he willing saying, hey, I'm the expert here. Heck you, you're going to give me a discount because rather than you going hiring this person, my guess is he paid you full, he was happy to be part of the team because I think that's a big difference. If someone comes in is really I like we want passionate people in their homes. Like that's the best part. But building for people that are passionate but also are engaging your team because they want to. Where it becomes tricky is when they be play designer, when they play builder, when they and then they want it to take away from your scope.
Mark Williams [00:14:12]:
I heard a story Brad Levitt talks about all the time on his podcast where he there was a client who wanted to fire that. Not fire, I think they didn't even. It was at the onset they said we're not going to pay this. I don't remember the number. I'll just make up the number. We're going to take this designer, her fee is going to be 150,000 over a three year build and we're just going to self select. And Brad's okay, you can do that. I will be charging you 170,000.
Mark Williams [00:14:34]:
And they're like excuse me. And he's yeah, someone has to do all the documentation and all. Whether you choose that interior designer or not, someone has to be the interior designer within our system that does everything. And you were just mentioning in Bradford homes like you have interior designers that follow your process and your protocols that do all that. That is how the client is buying the end experience. They came through your model home. It's like Ferrari, the Bugatti, whatever it is like people only see the end in most industries. They only see the end thing.
Mark Williams [00:15:02]:
They touch it, they feel it, that's great. They weren't on the factory floor while I was getting built again. Homes are really unique that way. And And I think education to the client of how we do this, what we're doing in aligning expectations, that does fall on. On Brad and Mark's head, because I always find that usually when that fails downstream, it's something I could have avoided on the front end by clearly, to your point, clearly explaining what we're doing, why we're doing, what's the why? And if I can, if. If it becomes an issue, you know, nine out of 10 clients, it's never something you really have to go through, so that's kind of hard. Do you change your protocols and do you do your. Your monologue at the beginning of every meeting for the 1 out of 10 that needs it, or do you have to read the room and then make your move on explaining it?
Brad Robinson Bradford [00:15:44]:
Yeah. It's great when you get to a point with a client where they say something to the effect of is, we came to you because you're the expert and we're not, and we need your guidance. And in that scenario, I look at myself as the humble Sherpa. It's my goal to take you to the top of the mountain. It. I have the expertise. I have the experience. I know where all the crevices and where we've got to really dig our heels in.
Brad Robinson Bradford [00:16:09]:
I know those places. But it doesn't mean that if a client says to me, I've been down this road a couple of times, I've built a custom. A couple of custom homes, and I have a few experiences of my own to share that I'm not going to listen. I absolutely. I'm all ears. I want to hear. And I'll have a good. I'll have a good conversation and take into consideration anything someone wants to tell me.
Brad Robinson Bradford [00:16:30]:
I think that's why I think people like working with us. We're easy to work with. We try not to make it challenging. We try not to be a. We try to remove all the friction. Right.
Mark Williams [00:16:40]:
And the client is. The client, to be clear, is a teammate. I always say the difference between house A and house B, it's. You never really assemble the same team twice. It might be a different architect, it might be a different interior designer, but honestly, the land has a big part to play in what the home becomes. But obviously the homeowner. That's why in some ways, that's what is so gratifying about building custom homes, is each one is unique. What makes it challenging is each one is unique.
Mark Williams [00:17:03]:
And clients keep. Yeah, exactly. And people want us to create a system. We're it. It's a never ending circle in the sense we as custom home builders are trying to create a system for interchangeable and new parts. You cannot guarantee A to Z the same every time because the variables are different every time. Now we can do our best to at least outline. And it's not that we don't obviously navigate this, but I think understanding that this is not built on a factory floor, this is not the same parts.
Mark Williams [00:17:34]:
It's a. It's. I talk about that a lot on the podcast, but it's also I talk a lot about to our clients to try to ask for. I had a client actually call me yesterday. He want. He said all the typical things. They jammed the client or they negotiated to the ninth hour. Delayed, delayed, delayed, delayed.
Mark Williams [00:17:48]:
They finally went with us and the next day is like, when are you starting? We lost our 30 day window to arm everything up because you were going back and forth with who, which team you wanted, which. So I have to educate them that now a month later, they're like, why aren't we further along? And I said there's really three things. One is we're still learning how to navigate the conversation between you and your wife and how you want to be spoken to and how everyone's a little bit different. You got to read the room a little bit. And then two is a lot of things were taken out during contract and now added back in. And so our team is still take some time to redo, especially on a remodel. So we've got to get this armed up. And then third is our interior design partner.
Mark Williams [00:18:25]:
One of their key people left, the people that was responsible for drawing everything. I said, so have a little compassion on this person is they're a small firm, you chose them, they're a great team. They're going through the wringer right now. You're gonna have to give them some time. And then third, this is kind of remodeling too, like having a little patience with the process. And so again, this is an opportunity to explain and we'll see if they listen.
Brad Robinson Bradford [00:18:44]:
Yeah. No, it's why so many builders would prefer to be semi custom or production based builders. Because you heard we have process as custom home builders, the only thing we can do to try to maintain and hold our margins is to implement process. So all the way back to the beginning of why. Right. Like if we did not have these processes in place, we would be allowing margin to erode. And as much as I do that the custom building space is the hardest place to exist when you're Trying to make money. That's why so many builders run the other direction from doing it this way.
Brad Robinson Bradford [00:19:18]:
But the client base that you get is going to. They are naturally this way. They went full custom because they wanted the versatility, they wanted the optionality and they wanted to work with someone who is going to give them the ability to innovate while building or make changes and have their unique DNA be in their home.
Mark Williams [00:19:36]:
I think it's really just wrapping up here, the 20 minutes. I think the biggest thing about when clients ask us to can they buy direct. In my experience it's always been because they're trying to save money. And I think when you explain it to them or I try to explain to them that it's not, it's about value. Like you hired us to deliver a value like that hasn't changed, has it? Do you think now we are not the same builder you hired because there's other places I can show you value if dollars. If you equate value with money, I can find and give you different options to reduce your cost if that is what your goal is. But if your goal is for this to be an enjoyable process, then you need to let our team do what we do. And so again, I think every.
Mark Williams [00:20:16]:
We could probably spend 60 minutes talking about more stories about this. It's amazing how quick just this one topic goes because I have so many. I have tile stories, lighting stories. There's so many where I think. Don't you think this comes up a lot in your career?
Brad Robinson Bradford [00:20:29]:
I have a bucket full of similar stories. I could take you down the rabbit hole. Insulation is one of the best ones, especially in our world when we start talking about upfront cost versus amortized cost over the period of time that they intend to live in the house. But yes, this is applicable in a lot of other areas where letting clients have choice can potentially not be to their best benefit. It's our job to guide these folks and give them the best information for them. And that is at the end of the day what matters. And showing them their process, showing them your process and giving them the why is what we all work hard to really do. And then also at the end of the day it comes back to making money.
Brad Robinson Bradford [00:21:10]:
You gotta have these safeguards in place so that you're preventing yourself from all the things that people are throwing at you every day anyway.
Mark Williams [00:21:18]:
So I appreciate it. Well, we'll wrap up this Q A, keep it short for the 20 minutes and for more they can tune into your previous podcast. Thanks again for listening to The Curious Builder Podcast thanks for listening to the Curious Builder Podcast. If you like what you listen to, please give us a five star rating and write us a review. It really means a lot. It's a great way for us to just understand what you like about the podcast and what we can keep doing. So like and review and please share with your friends and family. Find out more@curiousbuilderpodcast.com.
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