20/03/2007 - 22:00

Building on the collective

20/03/2007 - 22:00

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Western Australian builders’ co-operative, Wesbuilders, claims to have doubled its membership this summer as smaller builders find it tough to individually challenge the muscle of large volume project builders when it comes to accessing vital supplies.

Western Australian builders’ co-operative, Wesbuilders, claims to have doubled its membership this summer as smaller builders find it tough to individually challenge the muscle of large volume project builders when it comes to accessing vital supplies.

Formed in 2004, the organisation has a membership of 45 building companies, among them some of the state’s elite residential and commercial builders.

Suppliers are also showing their interest, with the co-operative approving 36 preferred supplier arrangements to date offering a diverse range of wares including timber, hardware, doors, concrete and hire equipment.

Wesbuilders business services manager Mark Irving said the co-operative had almost doubled its membership during the past five months, and had a further 30 builders holding pre-approval status.

The co-operative welcomes small to medium-sized registered builders, who must meet stringent selection criteria before gaining final approval from an eight-member board.

Current members include Brian Burke Homes, Palazzo Homes, Novus Homes and Glenway Homes.

“We’re not at a size to go in and thump desks but we facilitate deals between suppliers and members, which improves both their businesses and strengthens relationships,” Mr Irving said.

“Smaller companies that don’t have any recognition gain it indirectly through joining and getting greater buying power; some smaller guys have saved up to 25 per cent on products like concrete through the co-operative.”

The deal-making is coordinated by a Wesbuilders purchasing officer, who approaches preferred suppliers for their best price, on the collective requirements of members. 

Once the deal is signed, suppliers pay a rebate to the co-operative with monies channelled back into the provision of member services and events.

Mr Irving said Wesbuilders had come a long way since its formative years as the Insurance Industry Action Group, whereby a small group of WA builders banded together to get better deals on housing indemnity insurance in the wake of the HIH collapse in 2001. 

Founding member and Glenway Homes managing director, John Woodford, said the group realised it could achieve even more collectively, and he approached auto-parts buying group the Capricorn Society for advice on widening its scope. 

“I’d always thought a builders’ co-operative was a good idea and I learned a lot from Capricorn on how they grew to be so successful,” he said.

Besides saving on building supplies, Mr Woodford said the co-operative was still in the business of buying insurance, and was branching out into deals on mobile phones, IT support and other tools of the trade.

Fellow inaugural member Michael Burke, managing director of Brian Burke Homes, believes the co-operative is not about making unrealistic demands, but rather seeks what other customers seek – a fair price and good service.

“Traditionally, as small builders we have had to fend for ourselves in a market where the project builders have the purchasing power. Now we have a united voice,” he said.

“No member is restricted to using preferred suppliers either. We trade on our quality built product, so if a preferred supplier can’t get us what we want we will go elsewhere.”

Mr Burke said his industry was intensely private and builders were always looking over their shoulders, however he thought Wesbuilders provided a degree of openness and transparency previously unheard of in the industry.

An interested observer of Wesbuilders’ activities is the Master Builders Association of WA.

Executive director Michael McLean said that, with the exception of purchasing, the co-operative was starting to duplicate much of what the MBA already provided, such as technical advice, sponsorship packages and events.

“I can appreciate why the smaller builders would want to compete for a more affordable or discounted product, it’s not a service we provide,” he said.

“But it appears the co-operative is trying to be everything to everyone."

Mr Irving believes the co-operative is only providing what its members want, and said its board regularly accepted suggestions on how the group could improve.

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