Frequently Asked Questions
This FAQ section is designed to answer the most common questions about joining RQR. If your question is not addressed here, please email or call so we can clear it up for you and add the answer to our FAQ.
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Each applicant must meet certain minimums in sales volumes, reputation and profitability. RQR works with elite contractors who meet certain qualifications, listed below. Each member starts as a Potential Member, and they must attest to meeting the basic qualifications. Once the application is submitted and vetted by RQR staff, the board of RQR will accept or deny the application. Once the application is accepted, the Potential Member becomes a “subscriber” and will enjoy the benefits of membership.
- Potential Members must generally make between $3 million to $15 million in annual revenue, unless second consideration is approved by the board given location, necessity, smaller industry niches, and desire to grow with RQR
- Potential Members must have a good reputation, treat customers, competitors, and employees with respect, and promotes their business with modern techniques, uses excellent practices, delivers better roofs.
RQR negotiates directly with manufacturers and vendors of the products and services you are most likely already using. RQR has no distribution capabilities yet and does not plan on supplying products directly to our members until around the 4th or 5th year of operations. RQR will soon launch the use of Corcentric for ease of ordering, and financing purchases through Corcentric as RQR members.
RQR focuses on the collective good of up to 1,000 members. You are not forced to buy large quantities. You will receive financial benefits from purchasing through RQR, regardless of size. Your rebates may not be as large, due to smaller purchasing, and you will still benefit from the discounts from being part of the RQR cooperative.
RQR has no annual dues, and does not intend to ever charge annual dues. As typical in a cooperative, each member is an owner, and is expected to pay an initial 1 time membership fee, which should be viewed as a company investment.
RQR’s goal is to negotiate the best deal possible and each manufacturer will be different. Generally cooperatives receive 8%-18% discounts and/or rebates.
You have three basic obligations:
- We ask our members to be engaged and to purchase through RQR suppliers if it makes ethical and financial sense to the individual member. Not buying through RQR will lower the negotiating power and rebates. If members choose to leave one supplier for an RQR supplier, members are not permitted to disclose RQR pricing. It is best to tell your supplier that you are leaving to support a cooperative.
- RQR asks that members participate in voting, paying attention to what is important to us all, filling out an annual survey to see how we can better serve our members, show up to meetings
- Get excited again! Running a business for years, even decades can wear a person down. RQR aims to help you double your profits in the next 5 years, and help you streamline your business.
There is a non-disclosure agreement which you will need to review, understand and sign. The Membership Agreement shows you how the cooperative will operate and verify that you qualify to join, and must be signed. A member may leave the group at any time, simply by notifying RQR in writing. There is no penalty at termination, but the initial fee is not reimbursable for termination.
No. Members may be owners of RQR, but RQR does not own or operate members’ companies. Member businesses continue to make all of the choices for their business and maintain their own business identity.
You must take advice from your accountant, not RQR or RQR leadership team regarding your taxes. You will be receiving dividends through RQR from manufacturers, and it will be disbursed as a check or money transfer into members’ business accounts, which are paid at the beginning of the next year.
No, RQR is a cooperative not a franchise. Your purchases may be tracked by RQR and suppliers to calculate rebates to RQR and your business.
Purchasing cooperatives are a cooperative arrangement that agree to aggregate demand to get lower prices from selected suppliers. They first appeared around the 1800’s.In the U.S., a cooperative is a legal entity owned and controlled by its members and investors(owners) for their mutual benefit. The profits generally flow through to the owners and are not taxed at the cooperative level. Some purchasing cooperatives you may have heard include Ace Hardware, Corp.,,HeathPartners, Inc., REI, your local electric company, many pharmacies and medical clinics, most insurance companies, all credit unions, and other familiar companies like Carpet One and their family cooperatives under CCA Global Partners.
When joining RQR, your membership will be active in guiding what RQR offers, and pricing should be better than what you are currently experiencing with up to 1,000 companies purchasing together, and forming a significant buying power. In addition, members will also share best practices in a non-competitive environment, and RQR will develop new innovative and exclusive products and services you can incorporate into your business to improve growth, profit, and warranties. Think of RQR as your other business and help us help you and similar businesses grow throughout the U.S.
RQR employeesworks for you – literally. The employees will be responsible for researching not only the best deals, but the best suppliers with which to work. RQR believes service and quality of products is part of what makes your business profitable. RQR will keep in touch with you the members to constantly monitor which suppliers are the best, assuring the best pricing. RQR will investigate the areas in which members need support, areas of potential growth, and best practices. Ideas will be turned into turnkey business practices that all members can incorporate. RQR employees will also be responsible to expand the membership, as more members join, RQR becomes a stronger purchasing power, with a statutory limit of 1,000 U.S. members.
RQR can understand why you might think this; you are probably a great negotiator! Now consider how well you could negotiate if you had a thousandsimilarly large and successful businesses all buying under your negotiating power. Wouldn’t you get a better deal?Members are encouraged to participate to help RQR find the best deals, the best vendors/suppliers, and the best products. If you are that good and that well connected, join RQR and become part of the cooperative and the committees that make this happen!
RQR’s goal is to have suppliers and the cooperative communicate with you in a way that enhances your business, not distracts from it. You will be able to choose your communication methods and how often you are contacted.
Some may see a reduction of unwanted marketing calls from vendors and suppliers because of the relationship with RQR. In addition, you can even tell vendors who try to solicit you (those you do not want to talk with) to contact the person in charge of your buying is RQR.
RQR aims to not have excess members in any area to avoid competition and promote collaboration.
Unless you currently belong to a real cooperative, why let a purchasing group make money off you? By joining our cooperative, you will receive additional profits because you will become part owner of your own buying group.
RQR believes that Utah law best protects cooperative members while offering the cooperative the most flexible operating environment, so RQR chose to incorporate in this state as a Limited Cooperative Association. Utah is also one of the most progressive and nationally recognized places to start a business and to live a quality life.
As a Limited Cooperative Association (LCA), RQR has an opportunity to allow a limited number of investors to participate in ownership. The size of the investment and the “share” are the same as with members, but control of the association is held strictly by the members. The investor class holds only one seat on a seven seat Board and they do not vote in the general elections. That said, we encourage members to purchase additional shares in RQR. This is a great opportunity for the member. As with all investments, there is risk. To find out more, consult the Investor tab and fill out the information request, read the Non-Disclosure Agreement and Terms, and accept.
As to what or who will be involved, history tells us that every manufacturer will likely be in our inventory within 5 years. Some will offer 16% and others might just be 4%. When the time comes, each member will have to decide… loyalties vs. royalties. As to the local affairs, we don’t alter or wish to alter your current relationships in your community, nor do we interfere with your operations. Our job is to stand in your stead in negotiations with the factory. The deals you cut locally and the rebates you might already have are yours to keep.
The answer is no. Your pricing will not seem to change and we don’t expect you to recoup for 5 years. Fact is, in a co-op your pricing never really changes. The deals cut with the manufacturers will result in the operation of RQR without a reoccurring fee to its members and a check will come at the end of the year. This can only happen after the membership is built. It’s clear that the manufacturers will work with us, as a force to be reckoned with, not a handful of noisy roofers. After which, your partners and you should enjoy and expect a substantial return on your investment.
The most important thing to remember is that this co-op reality is the norm in other industries. Seems like everyone EXCEPT roofing contractors have powerful allies. We have a clear case in this industry of the manufacturers being in charge and the contractors, good and bad, badmouthing each other. This is simple economics, but it’s not for simple people. The manufacturers get together in their manufacturers association and fix prices, while we wallow in the worst of reputations. This is why you get the exact same increase notices every year. You put the enemy in charge of your books while you FAIL to organize against a clear threat. How could 6 majors all come up with an 8% increase in the same year? It is a statistical impossibility that manufacturers who make sometimes entirely different products (TPO vs. shingles) have the same price increase, while a smaller company like IB Systems hasn’t raised their PVC pricing for years. No other industry has had price increases like roofing in the last decade and more, except healthcare. Federal figures show buying cooperative rebates average a little more than 10%, but insider information shows us that commercial materials will rebate 30% of what the average contractor pays and based on Home Depot type negotiations, the coop should expect 34% to 36% in residential roofing. THIS IS HAPPENING RIGHT NOW, IN THIS INDUSTRY! This is normal. This is how business is done. This is your money, but the manufacturers are going to go ahead and keep it, because you didn’t ask for it.
A good portion of that money, about 3%, goes into support services. Like a back office for your use, with a highly trained staff doing things for you that you needn’t a full time person for. They would be back there working on a national presence for you, yes you. Web services are a big part of this. I’m old, so the web is still something I don’t like, but 87% of leads now come from the web somehow. We need to marshal those assets in a way no other can do. For the first time in roofing history, we can! Think about it… 1000 websites and all their landing pages, well over 2000 sites, all tied together. NOBODY would be able to find anybody, except RQR members. No Angie’s list, no Home Advisor, no YP “top 30 roofers”, nobody! We have a staff that marshals a constant stream of professionally produced videos, news, awards, client profiles and case studies clogging the internet and tied and layered thousands of times over and over again.
We are not a nanny state, telling you how to spend your money, but it’s not yours, not yet… it’s the manufacturers (now). We just have specific goals to go get it and sometimes you have to drag people, kicking and screaming into the future. The biggest goal I have is to help grow the entire membership from $5.15 billion today to $6, $8, even $9 billion. The top possible is about $18 billion. Put yourself 5 years down the road into something like the following Forward Looking Statement:
- Member wholesale purchases should grow to the $2 – $3 billion range, based on inflation, web dominance, national advertising, sales support, direct national sales, shows, etc.
- Rebates in the 10% to 16% range, with a reliable average of over 12%
- Therefore gross income to RQR in the $200 million to $480 million range.
- 2% to 4% used for overhead and “in house” services to the producing members (free web services, lead generation, legal, training, national sales, etc.)
- Optional reserves of 20% (of net) established for future acquisition opportunities and growth.
- 50% of remaining used for national advertising, shows, direct sales, internet domination.
- Therefore, 36.8% ($73 million to $176 million) returned to 2,000 owners
- $36,500 to $88,000 dividends in this example for a $17,500 investment, yearly.
- An annualized return of 208% and 500%, respectively.
Those would be dividends you get. We don’t do the P/E game. This is not a Wall Street shark attack. You own it, like I and the others do and you hire a staff to protect and enhance your company. This brings in the money (tools) to work with and succeed.
We are in this to make more money and have more power. To do this, we run on an established track in an industry so close to ours, that the largest roofer, Centimark also participates in it. Centimark does $530 million in roofing and $170m in carpet. I come from the carpet industry and I understand the power of a cooperative. You likely purchased carpet in the last 30 years and there is a 33% chance it was from a Carpet One member. Ask that local if he would join Carpet One again? Do it. ASK! Membership back then cost between $6k and $10k and they’ve gotten $1.1 million for their investment, grew 26% more than the market every year (profit in addition to the $1.1 million) and are all the top carpet store in their area. Only 2/10ths of 1% closed during the last recession, against 25% of all carpet stores closing. That’s better than 100 times less likely to go broke! You still have Home Depot and Empire trying to sell everywhere, but Carpet One stores still do more than all of them combined. We, our industry, needs something like that for roofing too.
For those looking for a handout, this is not the place. It never will be.
You are looking at an idea that has been proven to work everywhere. Because of the application of this idea and the work of others, it has now become an opportunity. To everyone who looks at it, it appears to be a good one, possibly a great one, likely the best one in your life, ever. This is real, but not for everyone.
That said, a question like this one will rob you of any opportunity really fast.
It is you who owns it and gets to build it, along with your counterparts and I, should you qualify to even join. It is a business that you own a portion of. In the beginning, you have an outsized voice and additional stock benefits. It takes time, but in time, we will have the budget to hire real pros in web services, law, HR, promotions, advertising, training and sales, but just like with this opportunity, if you don’t avail yourself to them, you will gain nothing. Fact is, we will find someone else who will.
The first thing you should know is that this is an authentic co-op, not a buying club, group or whatever, which means you own your part of it, as I do. I am a roofing contractor, just like you guys. NOTHING HERE IS FOR SALE. We are looking for and need to qualify our partners because we would be stuck with them. I run this because someone needed to and I have the time and money to do so, but I don’t work for RQR and I don’t work for you. Instead, we all work together to change a crappy reality, just for us. Since its run democratically, the issues and goals of everyone will be addressed in time. Everyone has questions, many are timid when faced with a new idea, but ASK. We won’t answer all the questions to everyone’s liking, but we also don’t expect to sign everyone up either. The smart ones will see this… the rest we don’t want.
The reality is that half who wish to join, won’t qualify and substantially more won’t be asked or will say no to this opportunity. If you join, one of the first questions we ask is who to avoid in your area. That’s part of the fun, running timid folks and bad businessmen and women out of business. So, if you had asked “what’s in it for me?” you might want to focus on the surprising luck you have right at this moment and fill out the online application. The answer… you get a glimpse of the future and may change it.
I wish to thank you all for reaching out. I hope the answers to these questions helped and we will continue to add more as we are asked. We can talk later about the nuances and you are welcome to call or email us. There is a ton of reading for anybody with interest. I hope this raises new questions. One of my understandings in life is the fact that curiosity is the driving force in all things human. We would be living in trees without it, so thank you all for the questions, as it is a sign of intellect.
-Mark Hedden, President RQR