PPG: Supplier or Contractor?
10 December, 2019
10 December, 2019
While PPG reports that PPG Services is designed to help contractors get more work – additional work they might not get otherwise, pro painters are divided on how they perceive the impact and intent. Some painters enjoy the opportunities the service offers but other feel those same services are crossing the boundary between contractor and supplier.
Aaron Moore, president of Precision Painting and Founder of CPIA believes the company’s acquisition of Paintzen and its subsequent launch of PPG Services turns PPG from his supplier into his competitor. “Not only will the painting contractor get paid less for a job if they use this portal, but they will also be buying paint from PPG,” Moore says.
According to Divya Thadani, PPG Director of Strategy and Business Development, Architectural Coatings, “PPG Services pricing is based on an algorithm that utilizes the PCA’s standard production rates as well as fair labor rates for consistency and transparency, with the goal of allowing painters to maintain the profit margins they see today.”
Craig Bundren, president of Bundren Painting & Drywall in Katy, Texas, is also nervous about the program. He and others like him have spent years developing professional businesses with insurances, project management and other business skills, he reminds us. PPG’s model might benefit smaller contractors and those new to the industry, Bundren suggests, but it might attract people who are less qualified. “Some of those businesses might be good painters, but they haven’t built a business, and PPG is going to build it for them,” he predicts.
And in a sense, this is true, in that companies who like to paint but aren’t that business oriented can now rely on PPG to handle a lot of that aspect for them. “PPG Services simplifies the project management process, providing small and medium-sized painting firms access to more jobs, allowing these painters to grow their businesses, and connecting our national account customers with a marketplace of established professional painters,” said Thadani, continuing that larger painting contractor also find value in the service.“ For example, some large contractors are looking to break in to new verticals or fill gaps during downtimes, and PPG Services can help them accomplish this,” she said.
PPG connected us with Joshua Martinez of Forza Painting in Hawthorne, California as a painter who is benefiting from the platform. “Since I don’t need to do any additional sales or marketing to get access to job, I work on through PPG Services, it’s been a really helpful way for me to take on more projects,” he said.
Moore argues against that. “If a painter took a job through Paintzen, the painter would essentially be working as a subcontractor,” he said. “They will lose work with existing clients or have to work for lower margins.”
Thadani further explained the pay system for PPG Services “If a customer has a union specification on a job, we will use union crews and pay union rates, based on the requirements by the union groups in the geography where the work was performed,” she said. “Union crews can also be considered for non-union jobs. Jobs are staffed based on painter location, skillset, availability, internal ratings and work order acceptance rates.” She also adds that since PPG takes care of the payment, contractors run no risk of a client delaying the payment or stiffing them entirely.
Moore’s position, as president of a company that put in significant effort building business in the Chicago area, is that a locally based paint company can do just fine finding business with a national chain – that national accounts are really local. “Chains like Starbucks are local businesses that commercial painters spend time developing relationships with,” he said.
But while some contractors are opposed to or suspicious of the program, PPG points us to others who find it helpful. “I’ve done quite a few jobs through PPG Services, and their project managers make sure the whole process goes really smoothly for us,” said Jack Horsley of Spectrum Painting, a multi-crew company in Houston, Texas.
Moore remains unconvinced. “PPG has been a great partner over the years,” he says, “but they’re taking work from their clients, and our fear is that it opens the door for every paint company to be painters, too.”
Some painters have retaliated. “A lot of painters in Dallas protested and stopped using PPG paint when PPG came out with this a year ago,” said Craig Bundren. For his part, Bundren says he’s going to take a wait-and-see attitude but admits this might hurt his relationship with paint manufacturer. “If they want my business, they shouldn’t be crossing over into what I do. I don’t have to worry about that with other paint suppliers.”
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