One of the most common miss-understandings that can occur when buying a shed is when have you “locked in” your sheds price?
Practices and procedures to “lock in the price” of a shed vary from reseller to reseller, from shed company to shed company and sometimes from salesman to salesman so always do your due diligence thoroughly and ask the question…How do I lock in my price and can I have that in writing?
From our perspective at the ShedBlog the most common miss-understanding we see in the market place is the distinction between a deposit and an order or manufacture payment. A deposit does not secure the price, placing an order does.
Generally speaking, you have only locked in the price of your shed once you have placed an order. Placing an order is buying the steel, not when you have only paid a small deposit to secure the buildings engineering…I’ll explain further.
When you pay a small Engineering deposit, often somewhere between 5% and 20% of the shed kit value to access the sheds engineering design for your approval processes, you are usually not committing to the full purchase of a shed and hence have not bought the steel, and so have not locked in the price.
Why? Nearly all shed companies and re-sellers only get to lock in their own steel buy price when they order the steel that makes up a shed kit. To do this the shed seller will usually take a “manufacture payment” or “deposit to commence manufacture” or similar from the customer that is usually worth 50% – 70% of the kit price.
People can take months to gain building approvals and sometimes many months or even over a year to gain their building approvals. During this time it is possible that there could be one or even more price movements in the market hence why the price is not usually locked until the payment to manufacture the steel is made.
Example of Timings : The Steel supplier notifies the manufacturers of steel products (The Roll-Former’s, eg. Lysaght, Stramit, Metroll) that there is a price rise coming and the date that that will take effect. The roll former’s will then work out the date they will cut off orders at the old price and inform their re-sellers, roofers, shed companies, water tank makers etc. In this case shed companies will then tell their re-sellers what date their last orders must be in by to lock in pre-price rise prices.
How this then effects the consumer depends on the re-seller.
There are good re-sellers we know of that will inform their customers of what needs to happen, step by step and by what dates to ensure that the price is fixed.
There are re-sellers we know that will honour a price they have given despite the underlying price rise even if a simple deposit to gain access to engineering has been payed, so long as the customer goes to manufacture within a reasonable time frame.
If a consumer pays a small deposit for engineering they should not expect to have the price held through several price rises and over a long period of time. Most contracts note this in their fine print stating that the price is subject to change which must be communicated in writing by the vendor and agreed upon by the purchaser. The purchaser can choose not to proceed and be partly refunded subject to the conditions in their purchase agreement signed when paying the deposit.
Below is an example of the text you might expect to see in a Standard Terms of purchase.
5. PRICE: The sale amount shown on the order will be fixed for X days after which it will be subject to market price fluctuations. Any variations or changes to the sale or the order shall not be binding unless accepted in writing by the Vendor and any costs borne by the purchaser. Termination of an order by the purchaser authorises the Vendor to deduct from the sale a sum equal to ten (10) percent of the order value plus costs to date.
The key points are these,
Paying a small deposit for engineering and approvals process usually does not lock the price.
Pay to place order/commence manufacture/ buy the steel usually locks in your price.
When the shed companies advertise “beat the price rise, order your shed before XX/XX they mean pay the payment for the steel order.