New horizons for the entrepreneurial
Published:  03 April, 2012

Merchants who enter into partnership with Procurement for Housing will find a number of opportunities that extend beyond the sale of building materials. United Merchant’s marketing manager, Suzanne Millward tells Lisa Arcangeli how it secured a contract that will help make independents more responsive during tricky economic times.

Procurement for Housing is arguably the largest and fastest-growing procurement consortium in the sector. The members of the consortium represent over 60% of the UK’s total social housing stock. They manage over four million properties throughout the UK.

PfH is dedicated to the public sector as the only national procurement organisation for the needs of the social housing sector.

An essential business tool for social landlords, PfH generates substantial savings by harnessing the collective purchasing power of housing organisations. More than 750 social housing providers throughout the UK have benefited from PfH’s management of the purchasing and supply of over £1.25m of goods and services every week.

“It’s all about accountability and visibility for local government,” says Suzanne Millward, Unimer’s marketing manager. “In the past, local authorities would hire contractors to do a job and had no idea how much the materials and labour would cost. Nowadays, local authorities need to be accountable for their spend and must be very careful to separate out their costs.”

In 2006, Unimer was invited to trial the PfH concept with a local merchant member in Cumbria. It worked so well that PfH decided to put out a tender and Unimer was awarded the contract to supply materials for responsive repairs.

“By bestowing this initial three-year contract, Unimer is effectively being treated as if it was a national merchant,” says Ms Millward.

“Of course, some of the nationals will be included on a framework agreement, but Unimer’s contract is designed to enable independents to also trade with PfH members.

“On their own, independents would not normally be awarded this kind of contract because they don’t have national coverage,” she explains.

More responsive

“This contract helps make independents much more responsive. “With 1000 Unimer merchant members trading from over 3000 outlets, we have national coverage, with branches everywhere,” she says.

It wasn’t all plain sailing. “Unimer had to submit a national pricing structure, based on a typical ‘shopping basket’ of what the housing associations might wish to procure. We made sure it was competitive enough, so as not to compromise merchants’ margins.

“The housing associations know exactly what they are paying for any type of material. They also know that independent merchants provide a higher level of service because they are more flexible and don’t have to go through several layers of management structure to decide whether to stock certain items,” Ms Millward relates.

The housing associations naturally want to save money, so what better way than through a local independent?

“A contractor can pop in to visit the merchant en route to his job – or have the merchant deliver to the site – wherever that may be.

“This flexibility saves PfH members money on fuel costs, transportation and downtime.”

She adds that the most successful merchants on the agreement are those who work the closest with both the PfH member – and sometimes even with its tenants. By way of example, she says: “If you put flooring into flats and the tenants don’t like it, they will rip it up. So, a merchant working with tenants’ committees and housing associations will aim to find a suitable solution.

“It’s win-win: the merchant gets the business and the housing association gets a product at a lower cost that its tenants will like.”

By working together in a true partnership, independent merchants can excel.

“Many merchants already trade with housing associations and local councils,” Ms Millward points out.

Gain accounts

“The benefit for the merchant is that this contract can open up more accounts with PfH members in their areas,” she comments.

“Unimer has secured the contract so that merchant members are classed as nominated PfH suppliers.

“The latest contract we have been awarded means that any Unimer merchants can supply most materials, from plumbing, heating and spares, building materials, electrical, aids and adaptations to fully managed stores solutions.”

Of course, it is up to the individual merchant whether they wish to pursue this business.

As Ms Millward says: “Housing associations will buy from somebody. If they are not buying from you, who will they be buying from?

“Taking part in PfH may also offer the merchant an opportunity to resurrect old trading relationships,” she explains.

Being ‘local’ has definite advantages for securing PfH business. “If you are looking at other revenue streams, look at PfH,” she advocates.

“For merchants who are close to more built-up areas, there are PfH members who want to trade with you.”

Unimer, she points out, acts as the enabler. “It is up to the individual merchant to decide whether this is a route they wish to follow.”

Energy-efficient savings

Almost 50% of British homes are not properly insulated according to the Government. By insulating these spaces, homes can make energy-efficient savings, helping people save money on their energy costs each year.

With the advent of the Green Deal, the need for a reduction in carbon emissions and the Decent Homes programme, housing associations have vast numbers of properties that will need to be brought up to standard.

“The housing associations will need to examine how they reduce their carbon footprint in their dwellings and this presents a great opportunity for merchants,” Ms Millward says.

She adds that those merchants who have taken up the offer have “done exceptionally well”.

Personal relationships, responsiveness and service levels are all winning points for independents. If a merchant can supply the complete package, they can drum up more business.

“And, once a merchant is in with a local housing association, they will be with them for life.

“Maintaining the business you have will be important in the year to come, as finding new business becomes increasingly difficult,” she says.

“Merchants need to make use of their credentials.

“If they are already a nominated PfH supplier, whether they’re trading on the framework agreement or not, they have already been ‘vetted’ as a ‘decent supplier’ to trade with.

“Unimer has already been through the painful tender process on behalf of its members, so its merchants already satisfy all the criteria laid down by the Official Journal of the European Union.”

Unimer is the UK’s largest merchants’ co-operative. With a turnover of over £850m, it provides an all-embracing, all-industry trading environment, where everyone in the merchant industry is represented – from the local independents and the regional buying societies to the largest national groups.

This feature first appeared in the December/January 2012 issue of Builders' Merchants News.

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