Steel shed price Rise

Posted on : September 19, 2011

Steel Price Rise Due in next 3 to 7 Weeks

BlueScope Distribution has notified customers of an impending two tier price rise in the coming weeks. It involves a base steel rise of between $60 to $120 per tonne on most product groups. As well they will be implementing specific surcharges to recoup key costs. These surcharges will be provided shortly.

 

Steel Shed Prices will rise with Australian Steel?

 

This comes after a significant bonus of over $3 million was paid to Key BlueScope Management (11 people) as a reward for leadership – not profit incentive? The notification states that volitilty in steel prices, rising labour costs, rising freight costs, rising processing costs, rising warehouse costs, and a rise in general utilities are the reasons. Along with the iron ore and coal price increase that has caused the steel price rise – the others will be included in the additional surcharges.

They state they have begun to receive notice from their steel suppliers (BlueScope Steel) of pending price increases. This does not look good for further sales of BlueScope Steel in the shed industry. With imports on the rise at cheaper prices currently – this price rise will further erode steel sales by BlueScope.

It will also follow by a notification by One Steel on its price increase – so many of the big shed manufacturers will be importing direct to keep competitive in the shed industry. Many of the big reseller shed companies will want to lock in prices for as long as possible to avoid this increase. Negotiations are already occurring between some of the big rollformers and BlueScope, along with talks between rollformers and shed companies.

 

Have you been told of this price rise?

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Shed – $5 million for 100 sqm!

Posted on : June 30, 2011

This shed in 2008 was the most expensive property in Australia – wonder if it still is?

The 100 square meter old tram shed at Cremorne Point was bought in 2001 for $780,000 and converted to a house by the owner several years later – see the news article.

It had stood vacant from 1991 until this sale transformed it to Australia’s most valuable property which is now rented. It overlooks Syndey Harbour with views of the Syndey Harbour Bridge.

$50,000 per Square Meter

Mr Gilmour, the head of Huntingdale Properties, is currently looking to rent his unique home.
He said living there had been wonderful but his family had now outgrown the house.

Even Mum, Dad and one child would be squashed in 100 sqaure meters.

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Interest Free Shed and Garage Prices

Posted on : March 16, 2011

Interest Free, the joke is on you!

In Summary

  • There is no such thing as interest free finance; the finance company will make money on any deal.
  • You are paying at least 7.8% interest and you are paying most of this upfront.
  • If you pay one day late outside of the fictional interest free period you are up for up to 27.8% interest
  • If you are extremely disciplined and pay off the loan in full before the fictional interest free period is over, then it is actually quite a reasonable interest rate.

The details

There is no such thing as interest free when buying sheds and garages, and in fact it is beyond Shedeye’s comprehension how this practice is allowed, given our strict Trade Practices Act.

The interest free deal is touted by many of the major shed companies in Australia and is little different to the tactics that major retailers use.

The first thing you need to understand is that you can usually only get finance for the Shed Kit price, as the cost of erecting the shed, the slab and site preparation is not covered.

Let’s say you are offered a $5,000 shed kit price and the Shed distributor is offering this as a 12 months interest free deal. You are definitely paying interest, and in fact you are generously paying the interest up front, and here is why:

  • The distributor has to pay a “Fee” to cover the interest free period of approximately 5%-6% for the total 12 months upfront. In dollars this means approximately $239-$284 paid up-front.
  • There is a $65.00-$120.00 “Establishment Fee” paid up front to take out the loan.
  • There is a $5-$7 “Monthly Account Keeping Fee” for the duration of the loan.

Does this look interest free to you?!  This equates to an additional $364 to $488 on top of your shed price. This means that the distributor will charge you this amount to cover their costs and label it interest free.

You should have been able to get the shed for a price of $4,522 – $4,646 without signing up for the interest free DEAL! To put it another way, you’re paying between 7.8% and 10.8% on top of the price of your shed.

There is no such thing as an interest free period, you simply pay more for the shed!

As far as getting finance for your sheds, garages or carports, this is the second cheapest option after drawing down on the equity in your house. However, if you do not pay off the entire balance of the loan before the interest free period lapses, you’ll have to pay approximately 20% interest on the entire outstanding balance (the same way credit cards operate). For example, if you pay off the balance on the first day AFTER the 12 months interest free period expires, the shed will now cost you $6,000.00 and you would have paid a massive 27.8%-30.8% interest rate.

If you don’t plan to pay the loan off within the interest free period, you must consider different options. In order of preference, redraw on your existing home loan, get a line of credit for any property you have or take out a personal loan, secured if possible. If all of these are out of the question, then do not buy the shed!

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The Shed Duopoly Monopoly

Posted on : January 27, 2011

Shedeye has conducted analysis[1][2] on Australia’s Shed Distributors, and their link to wholesaler’s and manufacturers.  The results are surprising and show that while there is a good degree of competition in the distributor[3] and wholesaler[4] sector, the manufacturer [5]sector is exclusively tied to Bluescope as a source of their steel.

The graph below shows that Bluescope has dominance on the shed distribution chain and hence will have significant pricing power.   The “Unknown” comes from ambiguity in some of the manufacturer company reports as they source some of the Cold Rolled steel from Bluescope, however it is not clear how much they source from China or elsewhere, it could be the “Unknown” quantity falls to Bluescope.  As you can see there are few distributors that do not directly or indirectly source their products from Bluescope.

This graph shows that even in Roll Forming Bluescope has significant market dominance across the distributors of Australia.  This again shows that the competition is almost limited to a duopoly and the barrier to entry is very high due to the vertical integration of the supply chain and the high capital costs associated with this process.   Titan Sheds and Garages has made successful inroads into this arena, using its distributor network in QLD and NSW to successfully become a specialized shed roll former in their own right.

This looks much more promising from a competition point; however when you take a closer look into who actually owns the largest distributors, some layers of the onion start to unfold…..  Stramit owns both Fair Dinkum Sheds and Garage World, while Lysaght (Bluescope) owns Ranbuild.

This shows that the independents own just less than 50% of the distributor market and the two big players have slightly over 50%.

An extremely interesting market when you look at this.  Bluescope has vertical integration from the production of their Cold Rolled Steel, Roll Forming to distribution.  However, nestled in each stage of the supply chain they have a wholesaler division that is servicing other companies.  A very interesting and a very powerful pricing position indeed.  Micheal Porter would be proud of Bluescope for ticking off each one of his competitive advantage points!

There are quite a few things in Bluescopes favor regarding price rises and sheds

  • Sheds are still a multiple cheaper than the substitute products of brick and steel.
  • Steel is well suited to Australian climate
  • The supply chain with steel sheds is sophisticated and impressive
  • The simplicity of erection is hard to beat and results in quicker time to completion.

Does this indicate that sheds are more expensive than they need to be?  Are Steel price rises that are being passed onto the distributors reflected in the international steel prices and even iron ore spot prices?

Do you want more detailed analysis than this report provides?  Shedeye has a detailed report that gives state and geographical information on the shed distributor market in Australia.  Please contact support@shedeye.com.au to request this report.


[1] This report is based on the number of distributors and may not accurately reflect true steel volumes.  For example one distributor may be selling as much as 3 distributors by volume.  Comprehensive steel volume data is not available and is very difficult to ascertain accurately.  That said analyzing the links in the supply chain to distributors does give you a very good idea of market control and dominance.

[2] This applies only to custom designed sheds; prefab sheds such as Abasco and Spanbuilt are not included in the analysis.  Even though they do represent a good percentage of Shed sales in Australia.

[3] Distributors are the retail outfit of the Shed Wholesalers.

[4] The Wholesalers are the Brands or buying groups (Fairdinkum, Ranbuild, Garage World, Sidach, Titan) and they handle the sourcing of shed components, ordering from the manufacturer, the software and engineering.

[5] Manufacturers are defined as a company taking the raw Cold Rolled Steel product and Roll Forming it into a product.  Also commonly called Roll Formers.

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Is Shedeye Independent?

Posted on : January 5, 2011

We are 100% independent and have no affiliation with any Shed or Garage Distributor, Manufacturer or Wholesaler.

Our interest is in giving  you the tools and information you need so you can:

  • Make informed decisions.
  • Streamline the Quoting process, giving you quick access to all of the major distributors in Australia.
  • Visualise your shed with a 3D Photo
  • Save you considerable time
  • Help you get the best price and product.

Does Shedeye have any conflict of interest?

The idea of shedeye was sparked by my fathers experience as a Distributor.  He manages the Sidach Albury store and has for the last couple of years.  This site in no way benefits him and will not in any way.  The only way it could benefit him is if he provides the best service and the best product, and that is open to any distributor.  Like any idea it had to be seeded from somewhere 🙂

How does this site make any money?

It currently makes no money!  It is a community service.  Shedeye is going to offer the 3D designer and Photo Rendering to distributors to use on their premises, however this will in no way effect the objectivity of this site.  Shedeye will also charge for detailed demographic information on the shed industry and sheds.

Why is this site required?

As far as a business sector is concerned, the Shed sector is very mature and competitive.  Competition is based around the Information Technology systems that the Wholesalers have and their branding.

Shedeye wants to ensure that you get the best product and the best shed price, as unfortunately there are some rouges out there selling misinformation and more importantly there are many outstanding distributors that should be getting your business.  In fact the margins that distributors make varies region by region, distributor by distributor.  As does the price, service and quality of shed you receive.  Shedeye wants you to be able to compare oranges with oranges, and ultimately for you to get a great shed.

Make sure that you check the affiliations with any site you are using, Shedeye is the only truly independent site that we know of and then there are those that are a clever front for distributors or wholesalers.

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10 Things You Must Know Before Buying A Shed or Garage!

Posted on : September 7, 2010

Download The Complete Article…


1. What Is The Height Of The Vehicle That You Are Going To Put Into The Shed or Garage?

The rule of thumb is that you will lose about 500 millimetres of clearance on the advertised Roller door height.  You can get a bit more height if you choose a gable entry over a side wall.

This is a very important consideration, as the height of your shed and the size of the roller door are contingent on the height of your vehicle.  There’s no point in buying a shed or garage only to find out that your boat or 4WD won’t fit in there because the shed roof is too low.  It’s vital that you take the proper measurements before you even go looking for a shed or garage.

Make sure you confirm your measurements and the amount of clearance your shed or garage will have with your local distributor.

2.  How To Get Finance For Your New Shed?

Before you consider finance through the shed or finance company, do your sums first, if you pay for the shed in cash; you can often negotiate a much better deal.

If you don’t have enough cash to pay for the shed outright, what can you do?

It may be cheaper overall to either get a personal loan or use the equity from your home so you can pay for the shed in cash and get a cheaper price than going through a finance company as you may have to pay establishment fees on top of the price of the shed.

Some shed finance companies can provide finance for the building and concrete as well, but it will depend on your financial circumstances – how much your income and assets are and how much debt you have.

Some shed companies provide consumers with interest free finance.  You can pay fortnightly or monthly through direct debit or credit card payments.  Once you receive delivery of the shed, your payment plan will commence.  But again, somebody is paying for the finance, usually through a more expensive purchase price, there is no such thing as a free shed after all!

3.  Are You In A Snow Loading Area?

If your property has an altitude of over 600 metres above sea level, it’s a legal requirement in Australia that your shed has a snow loading allowance built into the structural design.

It’s vital that you find out if you’re in a snow loading area as you need your shed to be strong enough to stand up to the weather conditions in your area, including ice and snow.  When looking at sheds, you can ask the distributor if their sheds have been calculated for snow loading.

Snow loading will also affect the required pitch of your roof, this means that you are going to need a pitch of at least 10 degrees upwards, depending on where you are located.

Remember, it’s important to consult with your local council first for snow loading requirements based on the Australian Standard 1170.3.


4.  Are You In A Wind Prone Area?

Simply ask your local council and your local shed distributor, it is too complicated to work out.

It is too hard to work out on your own as is based on the probable maximum wind speed in your region, if your site is on a hill or escarpment, if your site is located in suburbia or rural and the size and importance of the shed.

If you are in a wind prone area, the shed design needs to be stronger with more steel and will cost more.  This expense is a must otherwise your shed will blow down and will be a risk to yourself and others.

You will also have to check with the shed company to make sure the shed is strong enough to tolerate your area’s wind rating.  Your local shed distributor should know if you live in a wind prone area and what wind rating your shed needs to have.

As always, it’s essential that you check with your local council first before buying and installing your shed.  For a comprehensive analysis of the wind ratings take a look at the Steel Shed Groups publication Wind Actions on Steel Sheds and Garages (http://www.steel.org.au/_uploads/429_Wind_Actions_Steel_Sheds_2009.pdf)


5.  Are You Going To Build Your Shed Yourself?

You can save yourself a fortune building your own shed, however the bigger the shed the harder it is to erect.  Approximately 50% of all Sheds built in suburbia are owner built.

Are you going to build the shed yourself or are you going to hire concreters, shed erectors and plumbers?  You can save money by erecting the shed yourself, but if you’re not a handy person or don’t have any friends who are, you may be better off hiring experts who can install it for you and save you a big headache, as well as a lot of time.

The shed company you buy the shed or garage from may be able to provide you with their own contractors for erecting the shed, or give you the names of contractors.

The terms vary according to local councils (you MUST check them) however if the building is under $5,000 then you may be able to build without an owner-builder permit, depending on your local council.

If the building structure is over $12,000 then you need to apply for a Certificate of Consent.  This allows you to get a building permit and undertake your own building work as an owner-builder.

But it’s important you check with your local council first.  Some councils will require you to apply for a building permit (different to an owner-builder permit) in order to erect a shed.  If the structure is larger than 10 square metres in area, then the law requires you to get a building permit.

Theoretically you can never do plumbing work yourself as it‘s illegal; it needs to be conducted by a licensed plumber.


6.  Make Sure You Get Council Approval For Your Structure!

The variation between councils is great however there are a handful of situations where you do not need council approval and there are some limitations you need to be aware of.

  • Some councils do not require approval if the shed is smaller than 3 meters in width and 3 meters in height.
  • Some councils will allow the shed to be on the boundary while other councils will demand the shed to be situated at least 2 metres away with walkways .
  • Some councils will not allow certain shed colours due to the restrictions on the reflection of light and location aesthetics.
  • Some councils will not allow a shed if there is less than a certain percentage of land available on the block.

Just remember to check everything with your local council first!

This is generally what happens when you buy a shed or garage:

1)      You choose the kind of shed you want.

2)      You find a shed distributor you’re happy with.

3)      You decide how you’re going to finance the shed.

4)      You receive an engineering report from the shed distributor.

5)      You submit the engineering report to your local council, as well as an application for permission to build the shed.

6)      You receive advice from council whether your application is approved or not.

7)      If your application is approved, you can go ahead with your shed or garage.


7. When Do You Want The Shed Or Garage?

For custom built sheds, don’t count on parking the car in you new shed for 4-6 weeks from the time you make your decision to buy.

1)      It takes 3-5 weeks delivery time for the kit shed.

2)      It takes a day to pour the slab  (if you are getting a slab and not just footings)

3)      It takes a couple of days for the slab to dry completely (depending on the size) before you erect the shed or garage.

4)      Add two days for professionals to erect the shed or garage depending on size (for a standard size shed).

All of the calculations are assuming experience professionals, for somebody who is not then it can take much, much longer!!

8.  What Type Of Look Do You Want In Your Shed or Garage?

For custom built sheds there are over 500,000 different colour combinations using the standard Colorbound(TM) colours.  Combine the different materials and components and you have millions of unique configurations.

The number one biggest problem with new shed purchases is the colour selection, either incorrectly ordered, or incorrectly researched.  Choose wisely and triple check you are getting what you want as you’ll have to live with the colour once the shed arrives

The cladding you choose can be a standard corrugated (curved) surface, a square look or a combination of the both.

9.  Do You Want A Steel, Wood or Plastic Shed or Garage?

Steel sheds are the most versatile and affordable product in the market place.

Plastic sheds are usually only suitable for smaller sheds.  Wood sheds and garages are usually twice as expensive (installed) than the steel shed or garage equivalent.  You do have more variation in the styles by using wood, however given Australia’s termite problems, steel is a great option.

10.  Remember That Shedeye Can Help You Design Your Shed

Save up to 2 hours in shed and garage research, and filling out quotes by using the innovative web tool, www.shedeye.com.au.  100% free, always.

Shedeye was designed to allow you to visualise your shed, making it as close as possible to reality.  It also saves you hours by taking out the hassle of trawling through numerous shed sites, individually replicating the details of the shed your required.  A great online resource for designing, getting quotes and comparing sheds and garages.

www.shedeye.com.au

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2 of 10 – Things You Must Know Before Buying A Shed or Garage!

Posted on : August 21, 2010

How To Get Finance for Your New Shed or Garage?

Before you consider finance through the shed or finance company, do your sums first, if you pay for the shed in cash; you can often negotiate a much better deal.

If you don’t have enough cash to pay for the shed or garage outright, what can you do?

It may be cheaper overall to either get a personal loan or use the equity from your home so you can pay for the shed or garage in cash and get a cheaper price than going through a finance company as you may have to pay establishment fees on top of the price of the shed or garage.

Some shed and garage finance companies can provide finance for the building and concrete as well, but it will depend on your financial circumstances – how much your income and assets are and how much debt you have.

Some shed and garage companies provide consumers with interest free finance.  You can pay fortnightly or monthly through direct debit or credit card payments.  Once you receive delivery of the shed or garage, your payment plan will commence.  But again, somebody is paying for the finance, usually through a more expensive purchase price, there is no such thing as a free shed or garage after all!

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