Business question - Supply resale

Looking for a little guidance from any accounting/legal experts… I have a small midwestern roofing company. Through negotiations/relationships i’ve secured, I am able to purchase name-brand bulk shingles well below industry rates. I’m thinking of buying excess (beyond what i need for my business) and re-selling at a slight markup to interested suppliers/roofers. I can’t find any good reason not to do this, but i don’t want to get greedy and “upset the apple cart” and would operate on a small-scale. Is anyone currently running a similar operation, and if so, how would i structure the business? Do i roll-up this new idea into my existing company, or start a brand new llc focused on supply only? Any advice/insight would be greatly appreciated…

I don’t see how you make that work for a number of reasons. I’d definitely open a separate LLC. I’d use that to buy all materials and sell them to your construction/roofing company. I think if you actually think it through and consider equipment, GL and WC for the supply business, personnel and risk, not to mention the labor, it doesn’t seem like something that is going to make you enough money (if any) to make it worth it. Good luck though.

Thanks for the reply. Personnel and equipment aren’t an issue, we would use existing staff and either outsource delivery or use our vehicles. In many cases, we would simply act as a broker. It’s more a matter of generating a client base (already seeing some interest) and then deflecting any risk away from the main roofing business. We think we can offer supply (shingles) at 10-20% discounts to retail and average industry pricing for this area. Other than standard small-business issues, what other risks are you referring to if you don’t mind me asking?

Any time you are involved in the chain of supply or labor, you assume some amount of liability. If something goes wrong and you were involved in any manner, you will be sued. You seem to be looking for all the reasons this can work without really considering why it won’t. That is always a dangerous way of analyzing business prospects. There’s always the risk of having this distract from your core business.

You haven’t supplied enough details for a fair analysis. I just provided some things to think about. You don’t need to convince me. Start small and if it works, grow at a steady pace. It may turn out to be a great opportunity. Good luck.

Thanks for the feedback! the idea was to do just that, start small and see where it goes. much appreciated!

Had a local do that. GAF caught on and cut him off…

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Can you please elaborate? I can’t imagine they were buying directly from GAF, did a supplier rat them out?

Not sure of the details, mainly scuttlebutt.

No manufacture will sell a roofer direct. Where in the Midwest are you, and what brand are you wanting to sell?

The only time I’ve seen this, it was either a no name brand or seconds. It seems rather inconceivable that a major player would risk screwing up their distribution network for the sake of an operation like this. But I guess stranger things have happened.