Pole Building Prices: Beware when you compare

Pole Barn Guru Blog

For TBF (throw back Friday) we are reposting an old post back from 2011 that has been a very popular read.

What Is the Profit Margin at a Lumber Yard and how does affect their pole building prices?

What in the heck does the gross profit margin of the average retail lumber yard have to do with the price of tea in a third world country, or for that matter your new pole building?

Keep filed away in the back of your mind – gross profit is the difference between the cost of goods sold and what they are sold for. Out of this margin, needs to be paid all of the expenses of operations – lights, phones, heat, wages, employee benefit programs, equipment and the costs of flooring inventory.

I owned and operated two lumber yards for 17 years. Our typical average gross profit was 17-20%. This is pretty much the industry standard. Hansen Buildings currently provides pole building kit packages through several lumber yard partners, we know their margins are pretty much in the same range.

Builders FirstSource is one of the lumber industry’s largest pro dealers. In the second quarter of 2011, they reported $206.4 million in sales, with a net loss of $15.5 million. In practical terms, they lost about 7.5% on every sale, with a gross profit margin in the industry average range.

The Math Behind Pole Building Prices

Hansen Buildings operates pretty much like most lumber yards, however we do not have the added burdens of numerous facilities, the huge overhead costs of large numbers of employees and equipment like delivery trucks and forklifts.  And we do not have to pay to floor millions of dollars of inventory. This allows us to keep from losing the 7.5% on every sale, like Builders FirstSource (and probably some other major lumber dealers).

This leads me to the second part of the equation.  I just have to scratch my head when a client reports to one of our Building Designers the price on exactly the same building, purchased from their local lumber yard is thousands (usually $5-6,000) of dollars less than our price.

Considering the average pole building kit package is about $15,000, for a lumber yard to be even $5,000 less than us, would mean they were selling their materials at about $2,000 below their cost!!

As I am unaware of any Federal bailout money for lumber yards operating businesses in this fashion, I can deduce the alternate provider, who is so much less expensive, will quickly be out of business, or the pole building prices being compared did not list the same features.  Or more likely, I discover is often the case, the buildings being compared were not even the same size.  Not even close.

I’m all about doing pole building price comparisons, but let’s compare apples to apples, not apples to elephants.

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17 thoughts on “Pole Building Prices: Beware when you compare

  1. Harry Gerard

    Pricing a 50 wide. By. 30 deep pole barn with two framed areas for garage doors and one standard man entrance door, You show a 48×30. You could quote a 60×30 as well, I’m flexible in the size, not smaller. With 10 ft. Height. Thanks, Harry, 865-603-7325. Or email at.
    Kitchen2@bellsouth.net. Thanks, Harry

    Reply
    1. polebarnguru Post author

      Harry ~

      Thank you for your request, quotes for both 30’x50′ and 30’x60′ are both on there way to you. I always encourage clients to put up the largest buildings they can afford and which will fit on their property, as whatever size you build – it will not be large enough.

      Reply
  2. Cassie

    I am very interested in building a pole barn home but can’t find any price per square foot on a finished, livable pole barn home. I would be happy with 1500sq/ft or (if budget willing) 2400 sq/ft for a home. I don’t need top of line cabinets & countertops but good quality if that helps. I live in central MO if that matters.
    I would appreciate any info you could give me or lead me to someone who can. Thanks!!

    Reply
    1. polebarnguru Post author

      Cassie ~

      Assuming you are going to hire out all of the labor, your completed building in “pole barn” will probably range anywhere from 5-15% less than a comparable stick framed building. If you think about it – insulation, plumbing, wiring, HVAC, drywall, etc., they are the same no matter what the building shell is made of. The beauty of using a pole building kit package is, the average person who can and will read English can successfully construct the building shell themselves, saving thousands of dollars.

      Reply
    1. Hansen Buildings Post author

      Hi Dan
      Thanks for your interest in Hansen Buildings. I have forwarded your information on to one of our building designers who will provide you a free quote and be in contact with you regarding your building needs.

      Reply
  3. Tammy Yergey

    Hi. I’m looking for a pole barn that could house 100 round bales, 5×6. How much would that cost me? Installed and just materials… Kansas

    Reply
  4. Kelli Scott

    I am looking for a builder near Germantown, Ohio to build a pole barn with a concrete floor, can you recommend someone?

    Reply
  5. Doug Kuntz

    Wanting to put a wider 14 foot garage door in a pole barn I am starting to design for you. This is to back my fifth wheel into, so would like to use a wider door. Thinking a 10Wx14H on a 18’H wall. I would like to locate this on on of the non-gable walls. if this is possible?? The other doors would be 8Wx7H, so these should be fine. Looking at a 40X58 building with the 58 being the gable ends. I know there are probably other factors, but want to know if I can span over the 8 foot requirement for this door opening. Hope I don’t have to change the orientation of my building.

    PS Do you deliver to Belgrade, MT? Will be a year or so before I build. Just in planning stages at the moment.

    Doug

    Reply
    1. admin Post author

      Doug ~ Actually you might want to consider a 12′ width door, as 10′ wide is going to prove fairly snug, especially for backing in your fifth wheel. And there is no issue with a door this width in an eave sidewall.

      Normally a 14′ tall overhead door will fit into an 16′ eave height. If you are considering making a portion of the building two stories high, then 18′ eave would be the route to go.

      If your 8′ x 7′ overhead doors will be for vehicles, please consider going to nine or even 10 feet in width. The mirrors you save will be thankful.

      We deliver buildings anywhere in the continental United States, so Belgrade is no problem. I went to school at Montana State, so you are right in my familiar turf.

      Reply
  6. Ralph Burke

    I am interested in pricing a pole barn with two possible dimensions, (30×40, or 30×50), with a 12ft. height. I would like one overhead door, (9Wx7H), and one man sized door on one end. Thanx in advance.

    Reply
    1. admin Post author

      Ralph ~ One of the experienced Hansen Pole Buildings’ Designers will be in contact with you shortly to discuss your building needs.

      Reply

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