According to Eric Arnum of Warranty Week homebuilders seem to have perfected the art of passing their costs on to others. In the building materials sector in our report is a catch-all for all sorts of items used to furnish offices and homes. It includes cabinets, roofing, faucets, doors, chairs, windows, beds, pillows, tables, locks, pools, paint, carpets, and lots more. And while some of these items attract above-average warranty costs, the sector as a whole is the second lowest of all, beaten by only the auto parts supplier sector.
There's something to be said for being a supplier. On each of these charts, the brand names facing the consumer suffer the highest warranty costs, while those further back in the supply chain seem to keep their costs far lower. The big difference is that the homebuilders seem to have perfected the art of passing their costs on to others.
U.S. Building Manufacturers and Homebuilders
Warranty Accrual Rates, 2003 to 2007
(As a % of Product Sales)
Comments