The procurement chain, and what each link charges you
Every intermediary between the manufacturer and your site adds a margin. Some of them earn it. The question is which, and how much.
Fit-out procurement runs through more hands than most clients realise: manufacturer, national distributor, regional dealer, contractor, sometimes a design agency taking a specification fee. Each link takes a share, and none of it appears in the BOQ as a separate line.
Where the margin sits
- Manufacturer to distributor: volume-based, invisible to you, and largely fine.
- Distributor to dealer: 8–18% depending on category and relationship.
- Dealer to contractor: often another 10–15%, sometimes as a rebate paid after the year closes.
- Contractor to client: the stated margin, applied on top of a cost that already contains the two above.
* Ranges illustrative and category-dependent. What matters is the structure, not the exact percentage.
Which links are worth paying for
A dealer holding local stock, installing, and carrying the service relationship earns its share. A distributor with a warehouse that keeps your lead time at four weeks instead of twelve earns its share. A link that only forwards a purchase order does not.
What to ask for
Ask for the source of supply per major line, who raises the invoice, and what the intermediary does. Ask whether the price quoted is list-minus or cost-plus, and if cost-plus, on what cost. Ask who owns the material at site, because that decides who carries the risk if it is damaged before installation.
What we do instead
We hold brand-direct accounts for the categories we specify most, so the chain shortens to manufacturer and us. The fee for our work is stated as a fee. It is a duller commercial model than a margin stack, and it survives a client reading the BOQ closely, which is the point.
Have a quote or a BOQ in front of you? Send it across and we will read it line by line.
