Three Ways E-Commerce Benefits Construction Contractors
It has taken some time, but the construction industry is finally experiencing the benefits of using e-commerce to buy, sell and rent used and surplus equipment and materials. The old days of a construction project manager working the phone with a broker or intermediary to source or dispose of supplies are over. E-commerce, and its use through mobile tablets and smartphones, has radically changed the process, thereby increasing the speed of transactions, lowering costs, reducing project timelines—and even improving the planet’s carbon footprint.
However, many construction companies continue to depend on the comfort of using equipment and materials auctions facilitated by a third party to manage their transactions. While the practice of using e-commerce has long been a foreign concept to this industry, construction companies should consider adopting its use for numerous reasons.
1. SPEED OF DELIVERY
First, speed of delivery is an obvious benefit and can be expressed in multiple ways as it pertains to e-commerce use in the construction industry. Using e-commerce offers project managers the ability to offload or shop for and purchase equipment and materials online in a matter of minutes, versus weeks or even months.
Orders can be quickly transacted, shipped and tracked in real time on their way to a location. Managers are also freed up to focus more on operations while awaiting or shipping their goods as most transportation logistics are managed by online distributors. They can even leverage the power of e-commerce technology to immediately update and modify the delivery logistics of their order if a change is required.
Additionally, e-commerce use helps meet rapidly changing customer demands, allowing for a quick and nimble response. This is vital to ensure customers achieve bottom line results and also slash time off of project deadlines, getting to completion quicker and more efficiently.
2. EQUIPMENT SALES AND RENTALS
Second, the surplus and used equipment market is incredibly fragmented and complicated, with multiple pathways and intermediaries between buyers and sellers. With so many participants in the marketplace, value to the customer has been replaced by margin proliferation. The use of e-commerce solutions offers these customers a different option to buy, sell and rent online, eliminating the need for a middle man and allowing for increased cost savings and containment.
3. LESS WASTE
Third, another serendipitous benefit of using e-commerce in the construction industry is the elimination of wasteful practices. E-commerce allows project managers to obtain environmentally-friendly materials. Further, equipment and materials that would typically sit and waste in a scrapyard can be quickly recycled, resold online and transported for use elsewhere – while also adding to the contractor’s bottom line.
Following is an example of how contractors can benefit from e-commerce. A contractor was awarded a project that needed 1,000 wall feet of heavy sheet pile. However, the contractor’s proposal included pricing for new heavy sheet pile. Relying on the power of technology, the contractor leveraged an e-commerce platform to search for used materials in an effort to further reduce materials costs for the customer. By using e-commerce to connect online with a supplier selling the exact type and quantity of heavy sheet pile needed, the contractor saved the customer more than $450,000.
Another contractor was midway through a bridge project that was slated to be completed in 2017. The project had approximately two million pounds of sheet pile, beams and heavy sheet pile that had been recently pulled from their cofferdams. Using an e-commerce platform, the contractor sold 90 percent of the materials within six months.
Due to the positive experience achieved from using e-commerce, the contractor listed to the same online platform all of the project’s S-70 Flexifloats that were scheduled to be demobilized in the coming months. While still in the river, the contractor was able to quickly secure a buyer for the floats. When the contractor demobilized the floats, the buyer had their trucks ashore and waiting to be loaded.
While many industries are using e-commerce on a regular basis, construction has been slow to adopting and fully realizing the benefits it delivers for equipment and materials procurement. If the industry jumps on this trend, construction companies can come to expect lower costs, quicker project timelines and improved environmental conditions. A win-win for all involved.