Ways to Offset Increasing OSB Prices

Oriented Strand Board (OSB) is a sheathing material used by contractors, architects, and builders in both residential and commercial construction. The material has a wide range of uses, including roofing, sub roofing, floor underlayment, wall sheathing, I-joist, among many other services. OSB has commonly been used as a sheathing material because of its benefits and relatively lower prices than other materials like plywood. However, you may have noticed the prices started increasing probably because of the increasing demand for the product.

For some time now, you may have been faced with budget challenges and buying decisions due to the fluctuating prices of this construction material. The prices have escalated by around 4.4% just recently. Low distribution in the market by distributors who want to reduce the oversupply of the product has also caused the prices to escalate other than the increasing demand.

Other factors behind OSB fluctuating prices are natural disasters and wildfires which reduce production while at the same time increasing order. Economists will tell us that such a market condition where supply is low and demand is high will automatically increase prices. The price behavior of OSB has been predicted to continue rising, which makes projecting construction budgets very hard.

Read "The Current State of The OSB Market in 2021" here

As a result, builders and contractors are looking for ways to offset these increasing prices. Here are a few ideas that will help you know what to do even as the costs of OSB continues rising.

Buying in Bulk

As a contractor or builder, you can choose to buy OSB plywood material in large quantities. You may be wondering how this will help you offset the high and volatile prices.

Here is why buying in large quantities will help you take advantage of distributor bulk buying discounts. Buying in bulk will also mean buying at wholesale prices other than retail prices, which are usually higher than wholesale prices. By doing this, there are high chances of offsetting some extra costs associated with the same. Purchasing in large quantities will also translate to other reduced costs like transportation costs and loading and offloading costs, contributing to the overall costs. This means that in the end the cost of buying will be reduced.

You can also organize with other builders and contractors and buy OSB in much larger quantities than you could normally. This way, you can pull resources together and therefore share the burden and, in the end, offset the high prices.

Buying from the same dealer

Buying from the same dealer overtime will also help you offset the escalating prices of OSB, because you are increasing your customer loyalty. This means the dealer, as any other businessman out there, will not be willing to destroy the customer relationship with you.

For this reason, you are likely to be given discounts whenever you purchase. All you need to do is identify a reliable and trustworthy distributor and be a loyal customer. You will be shocked to realize how this will also help you offset the constantly increasing prices.

Read: Lumber Sales - How Small Building Materials Stores Compete

Dealing with the leading distributor

As we all know, commodities prices will always vary depending on how far it is from the source. As any product exchanges hands from the manufacturer to the wholesaler and the retailer, the prices will also increase. The logic behind this is that the dealers will be adding a mark up to the cost of purchase at each level to develop their new costs from which they can earn profits.

For example, a producer can produce OSB initially from wood for $120. He will then add $20 and sell it to the wholesaler at $140 with the $20 as his profit. The wholesaler, after buying, may then add $60 and sell it to the retailer at $200 with the $60 as the profit. Since he is also in business, the retailer will also add, say, $100 and sell it to the contractor at $300 with the $100 as his profit. This is to tell the price of OSB will be high depending on the number of times the product has exchanged hands. For this reason, you can offset these high prices by dealing with the original manufacturer, or us here at Silvaris. Since 2000 we have sourced from many different manufacturers, so you are always guaranteed the lowest prices.

Effective and efficient use of the OSB material

This is another effective way of offsetting the increasing and volatile prices. In this case, we are trying to minimize damages that may result from the need for more material. Since the prices are already volatile and expensive, there is not much left to do other than efficient use. As a contractor or builder, you have to reduce the OSB wastages and damages by being extra careful when handling the sheathing material. This step will ensure that all the materials will be used efficiently, and there will be no need for incurring any extra replacement costs. This is also a fantastic alternative for contractors who want to avoid the increasing costs of the sheathing material.

Buying and storing

Since the prices of OSB have been predicted to continue increasing with no sign of reducing, you can buy the material now at cost and store. Buying now means that you will save other than buying three, four, or so months from today. If you can be sure of proper storage, you can also save yourself the stress of increasing prices anytime in the future. However, the problem with this approach is finding proper storage where the OSB will not be damaged.

Conclusion

In summary, there is not much we can do to change the ever-increasing prices of the Oriented Strand Board. But the good news is that we at Silvaris can do something on our side to reduce the financial impact and stay within our construction budget. Our Daily Deals and QuickBuy programs are made for companies like yours. Our customers enjoy the advantages of our long-standing supply relationships by the consistent availability of the products they need and creative solutions to supply problems.