In today’s market, builders and propane suppliers need each other.
For builders, having a good propane supplier helps manage cost and schedules, and provides a crucial marketing advantage when selling the home. For suppliers, servicing builders means long-term relationships with high-volume, profitable accounts.
Understanding each other’s needs — and, in particular, anticipating any hiccups — goes a long way toward developing a healthy, profitable, and successful partnership.
“For suppliers, acquiring builder clients is time-consuming and expensive,” says Evan Roberts, a builder and remodeler who owns Dependable Homebuyers in Columbia, Maryland. “The best builder clients build at volume so the propane supplier can profit at scale. And the best propane suppliers take the time to understand the homebuilding process and anticipate a builder’s needs.”
Find a partner
For Harris Baker, a former builder and current president of Austin, Texas–based HBH Gas Systems, partnering with a propane supplier is a key differentiator when selling homes.
“It’s the difference between being able to offer the blue flame and having the orange coil. Which one would you rather present to your homebuyers?” Baker asks. “Finding an informed, educated propane vendor who understands the hot-button amenities that will resonate with buyers is important.”
He recommends builders look first and foremost at potential suppliers’ existing service area in relation to their current development or project. “Am I on the periphery of their territory and therefore on the periphery of their thoughts?” Baker says. “I want to be front and center.”
A full-service supplier will be able to provide propane and the gas-fired appliances a builder needs, such as water heaters, furnaces, and cooktops, as well as installation and service. “If I’m a builder and I only have to make one phone call — versus calling a supplier, an appliance retailer, and a plumber to install it — my job becomes a lot easier,” Baker says.
Roll up your sleeves
Once a relationship is established, taking a hands-on approach toward each other’s business is important. Builders need to communicate construction schedules so suppliers can plan ahead. And a good supplier will anticipate volume and periods of critical need based on past builds. “There are similar patterns in how much propane builders need throughout the year,” says Jeff Miller, co-founder of Baltimore-based builder AE Home Group. During humid or wet periods, for example, builders may need propane heat to help joint compound dry as workers mud drywall seams.
Most important, propane suppliers shouldn’t just wait for the phone to ring. “You’ve got to poke the dog a little,” says Ted West, director of sales at Liberty Propane, in Bucks County, Pennsylvania. “You can’t just sit in your office and text and email. You’ve got to be onsite to see how fast the client is really building.”
“Finding an informed, educated propane vendor who understands the hot-button amenities that will resonate with buyers is important.”
That means training delivery drivers and technicians to note new lots in rough plumbing while out on their routes, as well as to check in with builders after a large rainfall to make sure schedules are on track.
Remote monitoring of supply levels also helps. “You can call the builder when they’re down to 25 percent capacity and say, ‘You’re using 3 percent a day; we need to service you in the next week,'” Baker says.
Builders expect prompt service when a tank runs low, even if they know they should have made a call earlier. “Contractor crews often don’t realize they need more propane until they’re almost out,” Roberts says. “A good propane supplier provides same-day propane.” To expedite the fill, builders should ensure clear access to the tank by removing snow or other materials before the truck arrives.
Demand may outstrip supply during intense cold snaps. Good suppliers plan ahead, but builders also need to understand their obligations. “The people who are already living in the homes come first,” West says. “Temporary heat and everything else comes after that.”
Builders also should realize the time required to set up propane at a site — typically a full day. “You can’t just snap your fingers and have a thousand-gallon tank installed tomorrow morning,” West says. Several factors must be considered and a number of workers are required. “When we go out, a crane truck shows up with the tank, another crew comes with a backhoe and dump truck to dig the trench, and then another set of guys comes to hook up the lines and pressure and safety check the system.”
Once the tank is in, suppliers and builders should put safety first. That’s especially true for temporary tanks. “Keep temporary tanks away from equipment [that can create sparks] like table saws,” says Miller. “Mark out a perimeter with tape to ensure workers are aware of where they should be cautious.” (Learn more about jobsite propane safety.)
Put it in writing
All of these expectations should be spelled out on paper. “It can be tempting to do business off a handshake, but we find that implementing a contract creates a better working relationship,” Miller says.
The contract should explain in detail who’s responsible for what aspects of the relationship. For instance, when installing an underground tank: “Who’s going to do the excavating? Who’s going to backfill it with sand?” Baker asks. “Many times, the builder can excavate when they’re putting in other utilities.” The contract will also cover propane prices and any fluctuations down the road. “Builders hate receiving propane price hikes mid-project,” Miller says.
By working together and addressing potential sticking points upfront, builders and propane suppliers can profit from a mutually beneficial relationship.