Picture this: you’re running a building company with 25 staff. Work is coming in. You’re busy. On paper, everything looks like it’s going well.

Then you check the actual numbers, and you’re barely breaking even.

That’s the reality Carl Taylor lived before co-founding Combined Building Supplies (Co-op). And it’s a reality more NZ builders are living than would ever admit it. The problem wasn’t the quality of the work. It wasn’t the team. It was one thing: building materials.

“We could compete on labour, but we couldn’t compete on building materials,” Carl says. “We just couldn’t buy at the same price as the large guys.”

The Margin Problem Builders Don’t Talk About

Here’s the uncomfortable truth about running a small building company in New Zealand: the best in the business are achieving around 10% net margin. Not 20%. Not 30%. Ten percent, and most don’t even hit that.

Now consider what that margin has to cover. You’re on the hook for a 10-year warranty from the moment you hand over the keys. The client expects the build to perform for 50 years. You’re carrying compliance costs, insurance, ACC, vehicles, admin, before you’ve paid yourself a cent.

As Nathan from Our Projects puts it: “If you can find me another product out there where you get a 10-year warranty for a 10% net margin. I’ll give you a million bucks.”

The risk is real. The margin is razor-thin. And for small to medium independent builders, the pressure only gets worse when material costs are working against you.

The Mistake Most Builders Make When They’re Squeezed

When a job gets competitive and a client starts pushing back on price, what does the average tradie do?

They cut their hourly rate.

It feels like the only lever they can pull. Labour is what they control, right? So they shave $10 an hour off the quote, secure the job and quietly destroy their bottom line in the process.

What most builders don’t realise is that material costs aren’t fixed. They just feel that way.

When you’re a small operator going direct to a merchant, you’re getting whatever rate they decide to give you that week. It shifts based on your relationship with the rep, the volume you’re doing, whether they’re in a good mood. There’s no consistency, no transparency, and no leverage.

Nathan described it perfectly: “You almost had to look at it sideways and go: is that good pricing? Why did we get a good price last time on that particular material, and not now?”

The big group builders don’t have this problem. They’re buying at tier-one pricing because of the volume they push through. The independent builder? He’s paying whatever’s left over.

Until now.

What Collective Buying Power Actually Changes

Combined Building Supplies was built to solve exactly this problem. Founded eight years ago by four builders who were tired of being priced out of their own industry, Combined Building Supplies has grown to over 2,000+ members across New Zealand, making it one of the largest purchasers of building materials in the country.

The model is simple: combine the collective buying power of independent builders and tradies, and use that volume to access the same tier-one pricing that the big operators get.

Members get access to better pricing across 30+ supplier partners nationwide, the same suppliers you’re probably already using. You’re not switching your entire supply chain. You’re just getting a better rate on what you’re already buying.

And the membership cost? Carl’s take: “I just cannot see any reason anyone wouldn’t join. You’re leaving money on the table.”

Nathan, who’s been a Combined Building Supplies member for two years alongside being part of the Association of Professional Builders, puts it this way: “Don’t sit on the fence. The joining fee is not even a fee when you consider what you save.”

The Angle Most Builders Miss: It’s Also a Client Tool

Here’s something you won’t hear from many building coaches: being part of a tradie co-operative isn’t just a cost strategy. It’s a sales tool.

When Nathan sits down with a new client, he doesn’t just talk about his builds. He tells them: “I’m here to fight for you.”

He explains that Our Projects belongs to a builders’ co-operative. That through Combined Building Supplies, he’s accessing better material pricing and passing that value on to the client. That he’s not just taking their money, he’s actively working to get them the best possible result within their budget.

Think about how rare that is. Most builders show up and talk about their past projects. Nathan shows up and proves he’s invested in this client’s outcome before the contract is even signed.

“I’ve never heard a builder say that to a client,” Carl says. “That is absolute gold.”

It also gives you a backbone when clients try to push your margin. If someone is asking you to cut your 10%, you can stand up and say: I’ve already done everything I can to bring you the best price. I’m not the right fit if you want me to compromise on quality to hit a number that isn’t viable for either of us.

That’s not arrogance. That’s professionalism. And it’s a much stronger position than quietly dropping your hourly rate and hoping for the best.

The Bigger Picture: Why Independent Builders Need Every Advantage

Building in New Zealand is expensive. The average new build is costing between $2,800 and $4,000 per square metre as of 2025, and that pressure flows both ways. Clients feel it on their end. Builders feel it in their margins.

When the market softens, the builders who survive are the ones who’ve built a business, not just a trade. That means understanding your numbers, systemising your processes, marketing yourself properly, and yes, making sure every variable cost you can control is working in your favour.

Cutting your labour rate is giving away something you’ve earned. Leveraging collective buying power through a co-operative is just smart business.

The difference between an independent builder who thrives and one who tips over often isn’t skill. It’s systems. It’s support. And it’s knowing that the tools are out there. You just have to use them

Ready to Stop Leaving Money on the Table?

Combined Building Supplies (Co-op) is an official partner of the Association of Professional Builders and part of their trusted provider directory. Every dollar you save on materials is a dollar that stays in your business, or gets passed on to a client who’ll remember you for it.

If you’re an independent builder or tradie in New Zealand and you’re not part of a co-operative, you’re paying more than you need to for materials, every single job, every single week. See the full list of Combined Building Supplies supplier partners. Or if you’d like to understand how the co-operative works and whether it’s the right fit for your business: find out more about Combined Building Supplies.

This article features insights from Carl Taylor (co-founder, Combined Building Supplies) and Nathan from Our Projects, Auckland.