One Man's Challenge is Another Man's Treasure - Home Building Materials, part 4

Sourcing products from China can seem like reaching an arm into a black-hole. You are unknowing to the supplier's results of quality, meeting deadlines and expectations or even knowing if the product will sell in your market. Leveraging its experience in the construction industry, Sourcejuice continues the "One Man's Challenge is Another Man's Treasure" series giving you an insight into what's on the other side.

This article will discuss which items can be maintained in inventory for small to medium sized building supply houses. We will also discuss items that can be sold to commercial real estate developers.

In the previous articles we discussed what products builders buy. These sourcing guides are geared toward products that can be sold direct to builders because they are the big ticket items that relate to the largest pain-points on builder's budgets.

Part 1 - Plumbing, Sheetrock, Trim, Stairparts, Trim, Kitchen Cabinetry

Part 2 - Knowing your customer, the builder/developer

Part 3 - Appliances, Hardwood Flooring, High End Roofing Tiles, Custom Doors, Fireplaces, Travertine Tile, Lighting

Commercial Real Estate Developers
There are an unlimited amount of products that can be sourced relative to the development of commercial real estate or subdivisions. Not only the materials for the buildings themselves, but the components to get the property ready to build on can be sourced.

Here is a budget for development of a 5 lot subdivision in Georgia. From this budget you can derive a short-list of items that can be sourced for or sold to commercial developers. Keep in mind that most US subdivisions are atleast 40 lots, so these budgetary figures will grow accordingly.


•Sewer Pump Station Components - on properties that include land mass with a steep incline to the street, a pumping station will be required to service the sewer. Stations for the commercial application can range from $80,000 to $375,000. These stations include, sometimes county specific specifications for their construction so a scenario where sourcing an entire station for mass production might not apply. The components contained within these stations are expensive and could be produced over-seas for use in implementation into these stations. These components can include: high pressure pumps, electronics used for management and monitoring, steel deck plating, valves, etc.
Here are some schematics that can help in determining feasibility of importations of products for the construction of a pumping station.



•Pre-fabricated Metal Buildings - Commercial development contractors in the US typically do a "design-to-build" turn-key solution for metal buildings. You either provide them specifications or architectural plans and they quote the project, many times including development cost for the property. From there, the major components that make up the frame of the building are produced elsewhere in the US and shipped to the construction site for installation. The industry of importing these buildings in pieces, pre-fabricated from China is soaring and there companies that have been engaging in this business to manufacture pre-fabricated buildings for developments in the US since 1995. Check out this article. With the residential housing market at an all-time low, developers have begun to diversify their portfolio with commerical investments. Are these developers looking or already performing this business in China? It would pay to find out. The industry for metal building's "revenue for the year 2007 was approximately $7.9 billion USD, with an estimated gross profit of 27.9%. Import was valued at $183.2 million USD from 34 countries." Check the market research here. If you can source these products yourself and have the commercial real estate contacts, then you could be the next major player.

•Lamp Poles - these items can be purchased or leased from the power company during final stages of development, but the developer has the option of installing them themselves. These poles are relatively expensive so sourcing them from China is an ideal product to import. Their construction is modular so shipping can be maximized on this import.

Check out a subdivision development plan with lamp pole location highlighted. I see at-least a container of lamp poles just in phase 1.


•Sewer and Storm Drain concrete conduits
•Water and Fire lines
•Fire Hydrants
•Street Signs - If you want to purchase street signs for developments without going to China, buy from someone who does. Check out Global Home Construction.
•Retaining Wall Blocks
•Erosion Control

Power and Cable television lines are typically purchased and installed by the service providers themselves. During the development cycle a developer will provide blueprints indicating the layout and they handle the rest. These items are not good sourcing items unless you have a relationship with one of these providers. These lines that run inside the house may be good housing items to source as they can be sold directly to electrical contractors.

Small to Medium Sized Building Supply Houses
Sourcing items in this category are ones that:
•Will have a high volume of sales, maintaining constant amount of inventory while still purchasing regularly every 30 days.
•Items that are common purchases to builders
•Have good margin for profit after import
•Low individual cost per item
•Are not typically items sold by a lumber yard
•Can be mixed with the rest of your US domestic products for a seamless product-line.
•Can be packaged as a turn-key solution for installation

These items are include:
•Interior trim and moldings
•Interior and exterior door locks
•Exterior doors: front doors, metal doors, sliding glass doors
•Exterior cornicing materials
•Kitchen cabinets
•Contemporary Chinese lavatories
•Plumbing fixtures
•Lighting fixtures and fans


dylan@sourcejuice.com // Dylan Blankenship