Where and how you buy materials quietly shapes your margins. A few accounts and habits get you better prices, credit, and less time lost at the counter.
A note on sources. This is practical best-practice. The one legal piece — whether you can buy materials tax-free — is state sales-tax law and often misunderstood; see that section and confirm with your state.
Set up pro accounts
Both big boxes and local supply houses reward regular buyers:
- Home Depot Pro / Lowe's Pro — volume pricing, a dedicated pro desk, bulk and will-call ordering, and purchase tracking for job costing.
- Local supply houses (electrical, plumbing, lumber) — trade pricing, real product knowledge, and will-call or delivery. They often beat the big boxes on trade-specific materials.
Set these up once; they pay off on every job.
Big box vs. supply house
Use the right one for the job:
| Big box | Trade supply house | |
|---|---|---|
| Best for | Convenience, long hours, small runs | Trade materials, volume, expertise |
| Pricing | Retail-ish, pro discounts | Trade pricing, often negotiable |
| Credit | Pro / commercial accounts | Net-30 trade credit common |
| Advice | Limited | Counter staff know the trade |
Trade credit (net-30 accounts)
Most supply houses offer net-30 terms — take the materials now, pay at month's end. Used well, it smooths cash flow and builds business credit. Two cautions: keep the balance inside what a job will pay back, and pay on time — a late trade account hurts the credit you're trying to build.
Sales tax — clear up the myth
A common misbelief is that a contractor can buy all materials tax-free with a resale certificate. Usually not. In most states, a contractor who installs materials is the end user and pays sales tax on them — a resale certificate is for businesses that truly resell goods without installing them.
- The main exceptions: buying for a tax-exempt customer (a school, government, some nonprofits), or genuinely reselling material you don't install.
- It's state-specific and easy to get wrong — some states treat installing contractors as retailers, most as consumers. Confirm with your state department of revenue before you assume an exemption. Misusing a resale certificate is a tax problem you don't want.
Managing materials markup
Sourcing well only pays off if your pricing captures it:
- Mark up materials — you carry the cost, the sourcing, the risk, and any returns. (See the Estimating guide.)
- Add a waste factor so offcuts and breakage don't come out of your margin.
- Don't eat price swings — for volatile materials, quote from a current price or add a short expiration to the bid.
Quick-start checklist
- Open pro accounts at your big box AND a local supply house
- Use the supply house for trade materials and volume; big box for convenience
- Set up net-30 trade credit — and pay it on time
- Don't assume you can buy install materials tax-free — confirm your state's rule
- Mark up materials and add a waste factor in every estimate
- Quote volatile materials from current prices, or add a bid expiration
Sources
Practical best-practice; the tax treatment is state law.
Whether an installing contractor owes sales tax on materials is set by state law — confirm with your state department of revenue.