It's February 2022, and there's an 80,000 person trucker shortage in the United States on top of a plant shortage, record demand for landscaping, and labor challenges. Well, on this show, we've talked about recruiting tactics to get new people to apply to your company, retention strategies to keep your employees energized and on your team. We've talked about how you can leverage automation and video to free up some of your time. And in today's episode, we're going to talk about how you can outsource a key part of your business, which is sourcing plant material, and how you can work with an outsource partner to get that done so your plant materials are showing up on time without you spending a lot of your time finding them. So check out today's episode to see just how to do that.
Hey everyone, Jack Jostes here. And before we get into today's episode, I want to invite you to join me at my next live webinar on Thursday, March 24th, the course launch for the Landscaper's Ultimate Guide To Recruiting. This is going to be a hands-on, interactive webinar, where we're going to give a lot of value, a lot of tips, show what's working in the industry, and introduce our new online course. So check it out at landscapersguide.com/events.
All right, everyone. Here we are today with Mark Elliot. He's the CEO and co-founder of GoMaterials, an online marketplace that sources plant materials for landscaping professionals all throughout Canada and the United States. Mark, thanks so much for coming on the show today.
Mark Elliott:
Thanks for having me Jack. It's a pleasure to be here.
Jack Jostes:
Yeah. So tell us a little bit, what is GoMaterials and you're one of the co-founders, how did this all start?
How GoMaterials Started By Addressing a Major Industry Pain Point
Mark Elliott:
So I'll take you back from when it started. So I've been in the landscape industry for a long time. I want to say 17 years now. I started at the age of 12. From there, 16 years old, I opened my own landscape business with my brother. We grew it to be one of the bigger companies in Montreal while I was going through university. After university, I continued to work at the company full time. And from there, we started getting into really big projects and we were sourcing materials from multiple suppliers, dealing with the pain points of calling people, confirming availability, all that fun stuff. And I'm sure our listeners know what I'm talking about. So at that point, I was also losing interest a bit in the business, and I was speaking to my two other co-founders Mike and Shireen about starting another business with them and we were shooting around ideas and I was explaining to them the troubles I was going through at my landscape business.
And we saw the opportunity that, hey, let's solve a pain point for what Mark's going through at this point. And that's how we started GoMaterials. So right now GoMaterials is a wholesale marketplace for landscape contractors that's the most efficient and easiest way for them to source their materials. They simply send us a list, we fulfill everything on their list from A to Z, making sure that availability is there, quality's there, and we handle all the logistics. So you can send us in the list, within 48 hours you get pricing back, including the availability checks. And then if you want to go ahead and place an order, it's one simple click. We handle all the logistics and deliveries for you, getting everything to your job site in time.
Jack Jostes:
And so I contact you, 48 hours later I get pricing and materials. What's the typical turnaround for delivery?
Mark Elliott:
It really depends on the size of the order, but we've turned around orders within 24 hours, and usually most contractors want it within the week, so in a three, four day turnaround we'll be able to get them truckloads of material to their job site. So we have contracts where it's five, six loads of material, and we're doing that in a couple days.
Jack Jostes:
And so which kind of landscape material is available? Do you have plants? Do you have hard-scape material, lumber? What can we buy from you?
Mark Elliott:
So in the majority of our markets, we're focusing solely on plant material, just because that's the biggest logistical and sourcing nightmare for our contractors. And then slowly we introduce the hard-scape materials, like the paving stones, the slabs, and all the accessories along with it. But in Canada we offer everything and all our US markets we're offering solely plant material at this point.
Jack Jostes:
And where do the plants come from? Are they coming from local nurseries? I'm in Colorado so if I ran a landscape company here and I ordered some plant material, would that be sourced from local nurseries and growers? Or where does the material come from?
Mark Elliott:
So it really depends on the size of the list. So if it's something smaller we'll try and source it more locally just because it's not worth the logistical cost of getting something further away. But then, if you do have big orders where you're getting full trucks and we see that there's a price advantage to bringing it from out of state, we'll go out of state and get you the most efficient price at the most efficient landing cost possible.
Jack Jostes:
And how does that solve some of the sourcing issues today? How are you able to have access maybe to material that I couldn't just get from going to my local people already?
Building A Massive Network of Suppliers So You Don't Have To
Mark Elliott:
It's really about building our network and then using technology to take advantage of that network. So the big issue today is that contractors are so busy they don't focus on building out a massive network, so they rely on their local guide to help them source the material. Often they're overpaying for that material and just marking up the cost to their customers. So what we do is we have a huge network of suppliers, I think at this point we have over 400 suppliers we work with, and then when someone puts in a list we can then search the database that we built out, and we can see who has it at what price point and where it's coming from and how to get to the job site. So it just makes the whole process more efficient. These availability lists that we have with our suppliers are consistently updated so that the contractor doesn't have to waste his time calling around, trying to figure out where he needs to go.
Jack Jostes:
How do your suppliers keep their information updated for you? Do you have a database that they upload to automatically? Or do you sync with their point of sale, or are they just texting you a photo of a sticky note? How are they updating you so efficiently?
Mark Elliott:
So suppliers send it in many different formats. That's one of the issues we are dealing with today is, how do we standardize all this? At this point, we get the availability in Excel, PDF and we try to get them updated from our suppliers on a weekly basis. Some are monthly and some are a bit longer. And then we have a team that standardizes it on our end. So it takes us a lot of time, but that investment we find, in terms of standardizing, it does help us have more efficient sourcing for our customers.
Dealing With Ongoing Pricing Issues In The Green Industry
Jack Jostes:
One of the things that we were talking about before we started was some of the challenges that people are facing with pricing and with pricing changing. So tell me a little bit, what are you advising your clients to do to protect themselves from a pricing standpoint when many contractors are getting booked out months, or I know some people who are booked out even a year in advance, and they quote one price and several months later that price is different based on the current availability?
Mark Elliott:
Yeah. It's something that's been exasperated due to COVID and plant shortages. Costs for suppliers are going up drastically, so therefore they need to raise their cost to the customer. So the customer needs to ensure that they're not guaranteeing the price and locking in a price with the GC or whoever they're working with on the project. They need to make sure that there's some sort of stipulation in there that the price may go up 10, maybe 15%. And we're seeing that today, this year, prices have gone up at least 10%. And one of the biggest reasons is, COVID caused an extraordinary shortage of plug material, especially for the perennials and the shrubs. A lot of these suppliers that manufacture the starter materials had to close their factories down or their labs for 10, sometimes 12 weeks, and then even then they couldn't bring back their staff full time. Just because of COVID restrictions they weren't allowed to have people working next to each other indoors. So this caused a huge shortage in the materials and their costs have gone up as well.
Jack Jostes:
Yeah. And so you're based in Quebec. So what's it like up there currently? How has COVID and everything impacted you all up there?
Mark Elliott:
It's very similar to what you see all over. Prices have gone up drastically. We've unfortunately had to go back to some customers where they had contracts locked in with us that were supposed to start last year in spring of 2021, and now they're only getting started this year. And the reason is that jobs are also getting delayed. Landscape's the last piece to go in, so labor shortages are causing the job from the top down to get delayed and delayed and delayed. And then the contractor's job that was supposed to go six months to even a year ago is now only going a year later and his prices are unfortunately changing due to that. So he needs to make sure that he's not locking himself in and eating margin on the back end as well.
Jack Jostes:
Yeah, it's really tough. Hearing about that and reading about what's going on there and in particular with migrant workers and some of the delays and restrictions preventing people from coming in to work in an industry where migrant workers were a significant source of labor, it's been a really tough several years.
Mark Elliott:
For sure. To bring someone in your company and have them actually be able to start being productive in terms of the skilled labor and the knowledge they need, it takes a long time. And not a lot of people want to do these jobs anymore. A lot of them are getting college degrees going into finance and all that. There was already a labor shortage as it is. So a lot of people were relying on the migrant workers, now the migrants have been put on hold, you can't get as many migrant workers in, and therefore contractors are having trouble actually filling labor.
Jack Jostes:
Yeah. It's devastating. What are some of the ways, given the people who are working and the people who do want to do this work, what are some of the tips that you have in light of that? What are some of the things that you're recommending to people?
The Importance Of Good Wages And On-Going Training In Recruiting And Retention
Mark Elliott:
Yeah, definitely. So in terms of the labor side and actually the physical work that's done on site, we're recommending our contractors to start increasing wages. It's going to encourage more people to want to join your business. And if wages all go up, unfortunately the prices for contractors have to go up, but it's going to encourage more people to want to join the industry.
We're encouraging our contractors too, to also put in training programs where you can take someone that maybe used to take them a year or two years to actually start being productive and being a crew chief, or whatever you want to call it. Put training programs in place so that people can learn quicker and learn faster so they can actually become productive for the company.
How Outsourcing Can Help Alleviate Pressure On Your Team And Save You Time
And then in terms of the other side of the business, you want to really look at outsourcing as much as you can. So we're recommending programs outsourcing your takeoff. So when you do your estimates, you don't really need someone at the office, sitting there counting the plans that the architect did and counting the trees and measuring out all the quantities. There are companies that do that for you, which save you drastic time. Another thing too is companies like GoMaterials. If you have a buyer in house who's spending 40 hours a week sourcing plant material, you can then save that time, relocate that person to do another type of job in the company and have all your materials outsourced.
Jack Jostes:
Yeah, I think outsourcing and partnering, having strategic partners who do key things, I have some clients who outsource their design and they're able to get their designs done faster and better and they still charge for the design and it alleviates some of that. So how does it work? So if a landscape company needs help getting material for a project, do they fill out a form on your website? Do they work with an account manager? Tell me a little bit, what's the process of working with GoMaterials like?
How To Work With GoMaterials And What To Expect
Mark Elliott:
Yeah. So just getting started, some people are hesitant to actually sign up and create an account. We allow them to submit a list and see what pricing looks like and see what availability looks like and what GoMaterials can offer. But once they actually want to start engaging more seriously with us, we allow them to then create an account. They have an account manager that's dedicated towards them, ensuring that all their jobs run smoothly, they're satisfied, material's getting delivered on time, and our account managers are consistently reaching out. What's happening with this job?
We want to make sure that we're organized on our end too so when they do need the material, it's ready to go, it's on their job when they need it, so the job can continuously run smoothly. And that's one of the things that we pride ourselves on is, we allow our contractors jobs to run extremely efficiently because the material shows up when they need it.
There's very minimal refusals in terms of product. We do a very good job at making sure quality's there. And that's one of the biggest things that causes delays in jobs especially with plant material. Your guys are there, they're ready to install, but oh, the materials refused by the architect. Now your guys can't really install that day, you have half a day, if not a full day wasted. And in areas where you have six to eight months of execution, a full day wasted is a lot of cost.
Jack Jostes:
Now, I'm sure some of our audience is listening and they're saying, wow, these people are up in Canada, I'm down in Texas. How could they possibly help me get these materials faster? So tell me a little bit, how are you able to ensure that increased efficiency for contractors around the states?
Mark Elliott:
Yeah, so it's all to do with the network. So we have a network of drivers that we vetted. We work with them. They have experience dealing with plant material. And to me it's more the logistics side of things than actually finding the plants. Finding the plants is one thing, but then actually getting to site, you need that network of drivers that... And especially now with the shortage of drivers, if he's busy, you have another guy you can rely on, if he's busy, you have another driver you can rely on. So that's really how we can make sure that jobs run smoothly if we always have transporters that can deliver the product to your job site when it's needed.
And just in terms of sourcing the material too, contractors sourcing it themselves, they're going to have to make a thousand phone calls. They're going to have to run through a bunch of vendors, trying to find it, asking for pictures and all that stuff. We have a person on our team that specifically deals with vendors, making sure quality's there, visiting the farms, all that fun stuff, to make sure that we have solid vendors that we're working with and that quality's up the par. So although we're up in Canada, we have people traveling all over the place to make sure that what we're sending to your job site is quality material.
Jack Jostes:
And for our growers and nurseries who are listening, how do you work with those people?
Mark Elliott:
So when we get started with them, generally we'll ask for pictures oftentimes on smaller orders. And then when we actually want to start engaging with the nursery, we'll pay a visit to the nursery, we'll make sure they have a smooth running operation and then we often do take a commission on the backend from the nursery. So we avoid marking up any material to our customers. And that's how we ensure that customers are getting competitive prices. And oftentimes we're picking up from the nursery. So really why nurseries like working with us too is, shortage of drivers, shortage of trucks, we allow them to get more trucks out the door every day. So when we start building volume with certain nurseries, they don't have to worry about booking a truck, finding a truck, using their own drivers. They can use those for their other customers. We're sending our own drivers to the nursery to pick up the material. They just got to prepare it.
The Logistics Of Managing A Network Of Drivers During A Shortage
Jack Jostes:
So Mark, we've heard about challenges with finding laborers for years. I've been working in the green industry for a long time and it's always been a challenge, but one of the challenges the industry, and our economy in general is facing right now, is a shortage of drivers. Tell us a little bit about what are some of the numbers around the shortage of drivers and how are you seeing some solutions for adapting to that?
Mark Elliott:
Yeah. Like you said, there's about 80,000 drivers that are short in North America today. So it's causing a huge disruption in the prices of transport and that's causing natural products to go up because the landed costs go up. And even the starter material that nurseries are buying, they're getting it landed more expensive. So a lot of the starter material that nurseries buy does come from the west coast. So if you want to talk about caliper trees, a lot of the whips and the bare root stuff come from the west coast, nurseries get them to their farm, they plant them in the ground, the tree starts off at five feet and grows out into two, three-inch caliper trees.
Now because those trees from the west coast to east coast used to cost, maybe $4,000 a truck. Now it's around $10,000, $11,000 to get a truck from the west coast to the east coast. That extra transport has to be baked into the landed cost of the starter material. So because the starter materials are becoming so expensive, then it just increases costs naturally for everything. And then on top of that, when you have a job too, that you're ready to go, and you have the finished goods that you want to take from the nursery to your job site, transport costs are going up there too.
Really in terms of solving it, long term, technology's going to need to play a role. And we have all these companies that are pushing for driverless trucks. And I think that's something that's going to have to take place faster just because the 80,000 drivers aren't filling up anytime soon, it's a job that's a dying breed.
Jack Jostes:
You're absolutely right. 80,000 is quite a shortage. And going, did you say from 4,000 to 12,000 for a truckload?
Mark Elliott:
Yeah.
Jack Jostes:
That's unbelievable. So what are some of the ways that GoMaterial can help?
Mark Elliott:
So what we try to do is we try to work with owner operators, exclusively. The guys that have the one, two trucks, we build personal relationships with these drivers so that we set fixed costs with them. We build a really good rapport and they're not trying to gouge us. Whereas if you're working with brokers or huge carriers, they're all in it for the profit versus the relationships. So that's really where we're trying to hold our transport costs, is working with the owner operators and building extremely good relationships with them and almost to the fact where it's a personal level. And I think that's a huge thing in the industry and all over the landscape industry relationships are huge.
How To Connect With GoMaterials And Mark Elliott, CEO
Jack Jostes:
Well, excellent. Well, Mark, thanks so much for coming on the show. It's been a pleasure interviewing you and learning about how you help the green industry. So for people who want to connect with you, whether they're truckers who want to form a relationship with you or landscape contractors, or our audience members who are nurseries, how can we learn more about GoMaterials and get in touch with you?
Mark Elliott:
If you want to email us, you can fire us off an email at info@gomaterials.com. You can visit our website, which is gomaterials.com. So gomaterials.com, all one word, and we have phone numbers for every state. You can reach an account manager in every state, or you can simply sign up on it on our website as well. There's a signup link there.
Jack Jostes:
Awesome. Well, check it out. Gomaterials.com. And Mark again, thanks so much for coming on the show.
Mark Elliott:
Thank you, Jack.
Jack Jostes:
All right, everyone. Mark shared a ton of great ideas on how you can leverage your relationships, leverage technology, and yeah, check out gomaterials.com. See if they might be able to help you.
And I hope to see you at our next event. It's on Thursday, March 24th. It's the landscaper's ultimate guide to recruiting course launches. We're doing a live interactive webinar and we're launching a new online course showing you how to write job ads, how to retain your employees, how to create a system so people can apply online and keep it really organized so you can get back to them quickly and attract the A players, and ultimately stand out as the top landscape company in your local market so people choose to work for you. So I hope to see you there. Check it out at landscapersguide.com/events. I'm Jack Jostes and I look forward to talking with you next week.