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In this episode of Hard Hat Chat, Justin Smith, CEO of Contractor+, sits down with Gerritt Bake, CEO of Build PRO, to tackle one of the biggest profit killers in construction today, material cost volatility.
From lumber and steel to wiring, concrete, and finishes, material prices continue to shift faster than most contractors can keep up with. Justin and Gerritt break down why volatility is no longer temporary, how it impacts bidding confidence, and why so many contractors are winning jobs on paper but losing money in reality.
This conversation goes beyond theory and dives into real-world strategies contractors can use to protect margin while staying competitive. They cover smarter estimating habits, supplier relationship tactics, contract language that actually works, and how small and mid-size contractors can outmaneuver volatility instead of absorbing it.
Using practical examples and realistic case studies, the episode explains how to adjust pricing systems, communicate transparently with customers, and build processes that keep profit stable even when markets aren’t. Justin and Gerritt also discuss mindset shifts that separate contractors who survive from those who scale during uncertain pricing cycles.
Whether you’re bidding residential projects, commercial work, or specialty trades, this episode delivers actionable guidance you can apply immediately to stop margin leaks and bid with confidence.
🔧 In this episode, you’ll learn how to:
From lumber and steel to wiring, concrete, and finishes, material prices continue to shift faster than most contractors can keep up with. Justin and Gerritt break down why volatility is no longer temporary, how it impacts bidding confidence, and why so many contractors are winning jobs on paper but losing money in reality.
This conversation goes beyond theory and dives into real-world strategies contractors can use to protect margin while staying competitive. They cover smarter estimating habits, supplier relationship tactics, contract language that actually works, and how small and mid-size contractors can outmaneuver volatility instead of absorbing it.
Using practical examples and realistic case studies, the episode explains how to adjust pricing systems, communicate transparently with customers, and build processes that keep profit stable even when markets aren’t. Justin and Gerritt also discuss mindset shifts that separate contractors who survive from those who scale during uncertain pricing cycles.
Whether you’re bidding residential projects, commercial work, or specialty trades, this episode delivers actionable guidance you can apply immediately to stop margin leaks and bid with confidence.
🔧 In this episode, you’ll learn how to:
- Win bids without gambling your profit
- Protect margins during unpredictable material pricing
- Use bid expiration dates and escalation clauses correctly
- Build stronger supplier relationships for pricing stability
- Track job costs before margin disappears
- Communicate price changes without losing customer trust
- Shift from reactive pricing to proactive systems
If material price swings have made you hesitate before sending estimates, this episode will help you regain control and bid smarter in today’s market.
Creators and Guests
What is Hard Hat Chat: No-BS Construction Discussion with Justin & Gerritt?
Hard Hat Chat is your backstage pass to the gritty and sometimes mind-blowing world of construction. Hosted by Justin Smith, CEO at Contractor Plus, and Gerritt Bake, CEO at American Contractor Network, this show is all about keeping it real—no corporate fluff, no sugarcoating. Tune in each week for straight talk on growing a contracting business, avoiding industry pitfalls, and sharing the occasional “holy sh*t, did that really happen?” job site story. Whether you’re a seasoned pro or just getting your boots dirty, you’ll pick up hard-earned insights and a few good laughs along the way. Join us, throw on your hard hat, and let’s build something awesome.
Justin: Welcome back everyone to Hard Hat Chat. I’m Justin Smith, CEO of Contractor+, your host who still thinks lumber prices rise every time I look at a 2x4.
Justin: And joining me today, as always, my good friend and the guy who has more field stories than we have episodes, CEO of Build PRO, Gerritt Bake.
Gerritt: I’m convinced lumber prices are personally offended by you, Justin. You try to buy wood and the number on the price tag goes, nope, not enough.
Justin: For real. Today we’re talking about one of the biggest headaches in construction right now: material cost volatility.
Justin: Bidding is already a puzzle, but when prices jump like they’re in a trampoline park, winning bids without losing margin becomes a skill.
Gerritt: And when we say losing margin, we mean going from profit to charity. Contractors aren’t running nonprofits here.
Justin: True. According to sources like Material Prices News and Construction Dive, costs for key materials like lumber, steel, concrete, copper wiring, insulation are shifting month to month, sometimes week to week.
Gerritt: And sometimes the supplier calls and says, So… funny story…
Justin: Oh yes. The dreaded update call.
Gerritt: Contractors need strategies because customers still expect firm prices.
Justin: Missing margin on even a few jobs can derail growth. So today we’re giving practical tools to protect profitability even when materials go crazy.
Gerritt: Buckle up folks, we’re about to stabilize some chaos.
Justin: Let’s start with why material prices are so volatile. Supply chain bottlenecks, labor shortages, global manufacturing issues, fuel costs, even natural disasters.
Gerritt: And demand surges. Hardware stores felt like Black Friday every day.
Justin: Builders Magazine points out volatility is the new normal.
Gerritt: If you’re waiting for stability, you might retire first.
Justin: So instead of hoping pricing calms down, build systems around volatility.
Justin: First strategy: update pricing databases regularly.
Gerritt: Not what your cousin paid in 2018.
Justin: Weekly updates matter.
Gerritt: Spreadsheet date nights are real.
Justin: Second strategy: automated material price syncing.
Gerritt: Better than calling seven supply yards at lunch.
Justin: Always review before sending quotes.
Gerritt: Software didn’t walk the jobsite.
Justin: Third strategy: bid expiration dates.
Gerritt: Ninety-day approvals can kill margin.
Justin: Pricing valid for 14 or 30 days protects you.
Gerritt: Customers understand. Inflation hit groceries too.
Justin: Let’s talk supplier relationships.
Gerritt: Loyalty gets early notice and price holds.
Justin: Consolidate orders and negotiate.
Gerritt: Ask the question. Worst case, price goes up tomorrow anyway.
Justin: Fourth strategy: transparent communication.
Gerritt: Surprise invoices create one-star reviews.
Justin: Contract protections matter.
Gerritt: Escalation clauses save businesses.
Justin: As long as it’s clear upfront.
Justin: Meet Brent from Frontier Remodel & Build in Kansas.
Gerritt: Owner, estimator, installer, therapist.
Justin: After losing margin, he adopted automation, bid expirations, and escalation clauses.
Gerritt: Six months later margins stabilized at 18 to 22 percent.
Justin: Track profitability in real time.
Gerritt: Waiting until the job ends is too late.
Justin: Data accuracy equals clarity.
Gerritt: Tiny leaks sink businesses.
Justin: Build contingencies into quotes.
Gerritt: A safety harness for profit.
Justin: Specialization helps control materials and suppliers.
Gerritt: Specialists lose less and win more.
Justin: Temporary surcharges can cover risk periods.
Gerritt: Better upfront than painful change orders.
Justin: Margin protection checklist:
Update pricing weekly
Add bid expiration dates
Use escalation clauses
Track job cost live
Communicate transparently
Gerritt: That checklist alone saves serious money.
Justin: Part 2 coming up. Stay tuned.
Justin: If you’re looking to scale without chaos, check out Contractor+.
Justin: CRM, estimates, invoices, payments, and integrations to run your business end to end.
Justin: Welcome back. Part 2.
Justin: Crew involvement matters.
Gerritt: Material waste equals profit waste.
Justin: Train and reward efficient crews.
Gerritt: Golden tape measure trophy optional.
Justin: Inventory strategy can protect margins.
Gerritt: Buy smart when prices dip.
Justin: Organized chaos is still chaos.
Justin: Faster payments protect margin.
Gerritt: Progressive invoicing saves lives.
Justin: Meet Precision Patio & Deck Co.
Gerritt: Busy but bleeding profit.
Justin: Real-time tracking and deposits fixed it.
Gerritt: Margins jumped to 21 percent.
Justin: Shift service mix toward stable materials.
Gerritt: Labor is controllable. Materials are not.
Justin: Negotiation power moves:
Price holds
Group buys
Preferred partner terms
Gerritt: Consistency pays.
Justin: Tech evaluation questions:
Auto pricing sync?
Real-time tracking?
Crew adoption?
Gerritt: Simple beats fancy.
Justin: Margin protection mindset matters.
Gerritt: Volatility is permanent.
Justin: Margin Protection Playbook:
Audit past jobs
Update pricing
Improve estimating
Add protections
Educate customers
Track usage live
Weekly feedback loops
Gerritt: Follow that and 2025 can be huge.
Justin: Quick laugh break.
Gerritt: Why did the contractor bring a ladder to the bar?
Justin: Oh no.
Gerritt: Because the drinks were on the house.
Justin: Might be the only affordable thing lately.
Justin: Define your ideal project profile.
Gerritt: Say no to margin killers.
Justin: Estimator and field alignment matters.
Gerritt: Silos kill profit.
Justin: Future resilience comes from data, agility, and supplier partnerships.
Gerritt: Adaptation beats hesitation.
Justin: Final message.
Gerritt: Protect your margin like it feeds your family.
Justin: Because it does.
Justin: Prices may be unpredictable, but your systems don’t have to be.
Justin: That’s a wrap on Hard Hat Chat. Gerritt, thanks for the wisdom.
Gerritt: Always a pleasure.
Justin: To our listeners, bid smart, build strong, and protect every dollar you earn. See you on the next episode.