Should contractors buy materials early to beat inflation?

What each side of the trade actually costs

Early: deposits of 20–50% on major equipment, storage and insurance for things that arrive before you need them, double handling on a tight site, and the real possibility of buying to a design that has not finished moving.

Late: cash preserved and design matured — paid for in escalation, and in factory slots that went to somebody who committed sooner. On a constrained item, the slot is the scarcer thing.

Where early wins, bring the machinery

Buying early without the contractual protections is just paying sooner. The provisions that make it safe are well established and routinely omitted: off-site materials payment, so you are paid for what you have bought; vesting certificates, so paid-for stock is actually owned by the party who paid; and insurance that follows the goods into storage.

Get those in place and early buying is a hedge. Leave them out and it is an unsecured loan to your supplier.

The worst position is the default one

The procurement plan’s job here is not to give you the answer. It is to make the trade-off visible per package, so that somebody decides it.

Because the failure mode is not choosing wrong. It is not choosing — deciding by inertia, package by package, and discovering afterwards that the choice was made for you by a supplier’s order book.

Terms

• Buy-Out