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Dealers and Manufacturers: Curious What Payment Terms Are Most Important to Builders and Contractors?

Payment terms influence relationships between construction professionals, LBM dealers, and building material manufacturers. But which terms are most important to contractors and builders?

In this statistic from our ongoing, monthly survey of builders and contractors, we asked them to rank following 3 payment terms in order of importance; volume discounts, extended days to pay, rebates. The most important term was given a score of 1, the second most important was given a score of 2 and the third was given a score of 3. The scores were then averaged to arrive at a composite score. The lower the score, the higher the grade. The chart below details the results.

Payment terms are ranked by builders and contractors on a scale of 1-3 and displayed on a simple chart by average importance rating.

Volume discounts take the top spot as the most preferred payment term, followed by extended days to pay. While rebates are less significant to builders and contractors, they still act as a useful incentive for loyal customers.