Most of you know that I got my start and interest in the industry about ten years ago when I worked as a purchaser for a larger automotive dealer group. Part of my responsibilities were to negotiate, purchase, and co-ordinate refrigerant R-134a purchasing. Occasionally, we would do some 404A for the refrigerated trucks but most of the time it was 134a. I would contact my distributors get a quote, compare that quote to others, negotiate the price down as best as I could, and then purchase. When we would purchase it would be at a minimum of a pallet at a time. (Most refrigerant come forty cylinders to a pallet.) At times it would be a couple pallets and other times, towards the beginning of the season, we would buy a trailer-load of refrigerant. (Twenty pallets.)
By doing this for a few years I began to get a sense on what to do and what not to do when it came to refrigerant purchasing. In 2013 I started my own online business selling refrigerant cylinders on the side. This venture only lasted a few months but it did generate a decent amount of sales and I learned a lot. I ran into a problem of storage requirements and also ended up being upside down on freight. Juggling this side business with my full time job as well as making time for my newly born daughter just wasn’t feasible. I shut the business down and then mulled things over for a while. Then, that next year in 2014 I decided to start up RefrigerantHQ.com and I have been working on it off and on every since.
Throughout these years and different ventures I feel that I have acquired a decent amount of knowledge on how to purchase refrigerant and where to buy from. Today, I would like to share this with you.
First things first folks. Before I get into my buyer’s guide I want to point out that in order to purchase any kind of refrigerant you are either going to need to:
- Be certified with the United States’ Environmental Protection Agency.
Depending on the type of refrigerant you are purchasing you will either need to be either 608 or 609 certified. Please note that there are different types of 608 certification. (Click here for EPA 608 Certification Types.) The safest method is to be universally certified to cover your bases. Also, 609 automotive certification is much easier to obtain then a 608. In some instances these can be done by your employer if they have a trainer’s license.
- Provide written proof that you employ a certified technician.
If an employer wishes to purchase a refrigerant then that employer will need to provide written proof that they have a 608/609 technician on file before they can purchase.
All of this criteria above is dictated by the EPA. For more information on the refrigerant restriction rules please click here to be taken to the official EPA page. There is one change to this restriction that goes into effect in only a few months on January, 1st 2018. This change now adds HFC refrigerants such as R-134a, R-404A, and R-410A to the refrigerant sales restriction. Before, since these HFC refrigerants did not damage the Ozone layer you did not need to prove that you were certified but the EPA has now changed their policy. Truth be told though folks most distributors were already asking for cert numbers on HFC refrigerants even before this change went into effect. Not much of a difference here except now you HAVE to ask for certification numbers.
How Much Are You Buying?
This is the question and it is a big one. Just like with anything in this world the more you buy the cheaper you can get it. It is no different with refrigerant. Another point to mention here is that refrigerant is by all measures a commodity. The price changes wildly back and forth over the seasons. What that means is that there is room for negotiation on price, especially if you are purchasing larger quantities. Let’s take a look at the refrigerant buying levels and what can be done witch each:
- Little – If you are a do-it-yourselfer looking to get your hands on five or ten pounds of refrigerant then you are going to have a hard time.
I fear that once the new refrigerant restriction rules go into effect in 2018 that these cylinders will vanish from online retailers. This is the sales restriction’s purpose though. They want to avoid novices or do-it-yourselfers working with AC machines. The chance of them accidentally venting or causing a leak of refrigerant in their system is very high since they are not experienced. There is an exception in the EPA’s restriction that allows small cans of refrigerants that are less then two pounds to be sold without a certification. The problem here is that these cans usually only come for automotive applications. If you are looking to purchase refrigerant for your home unit you may be out of luck unless you are 608/609 certified.
- If you are certified and just need a few pounds of refrigerant the best way would to contact either your local HVAC company or a HVAC parts distributor like Johnstone Supply. If they are willing they would be able to sell to you after you provide your certification. Now there may still be refrigerant cylinders available for online purchase but if they are then the seller will be asking for your certification number before the product has shipped. If they do not ask for this in 2018 then they are breaking the law.
- Medium – In my mind I picture the medium guys as business owners who either run a small HVAC repair company or they have a small automotive shop. These guys may need a few cylinders at a time but definitely cannot handle a forty cylinder pallet. These customers are 608/609 certified but just don’t have enough demand to require buying in larger quantities. Most of the time they are buying from HVAC wholesalers such as Johnstone Supply. While most distributors only sell in pallet quantities there are a few out there that will work with you and sell five cylinders at a time. There isn’t much room for negotiation here on pricing but it never hurts to try. Another point on this buying group is that you as the purchaser may be required to pay freight to ship the refrigerant. When you get to be purchasing a pallet at a time freight is usually pre-paid.
- Large – Alright so now we’re getting onto the bigger guys. These are larger HVAC companies or shops/automotive dealerships. These guys can comfortably buy a pallet or two pallets at a time. (Remember a pallet is forty cylinders of refrigerant.) Like before these guys are EPA certified. The difference here is that they may have a corporate buyer buying for them rather than the actual technician or business owner who is certified. This buyer will need to provide the 608/609 number of one of the technicians that work for the company. There are a few things to note when buying a pallet or even multiple pallets of refrigerant:
- It is typically standard practice to have the vendor pre-pay the freight when purchasing a pallet of refrigerant. If your distributor wants you to pay freight then I would fight it and push it back to them to pay. However, if they insist that you pay freight it honestly won’t be so bad as you are paying for an LTL shipment of one pallet. The only catch here is that it is a hazardous material so there will be an up-charge for the delivery. If I was to guess I’d rate it at about one-hundred and fifty dollars to two-hundred and fifty dollars for an LTL shipment.
- The second point when buying in pallets is that the door is opened for negotiations on price. When I would have a two to three pallet order that I needed to place I would call around to three to four, sometimes five to six, refrigerant distributors. This would give me an average price point and then I would begin negotiating pricing down by pitting the distributors against each other. When I was satisfied with my price I would issue my purchase order and call it good. Now, you don’t want to do this back and forth all the time and you don’t want your supplier to hit bottom either. Remember, that the distributors need to make a profit as well and that you are not just buying from them but you are also establishing a relationship. If you have a habit of driving the price down to the bottom then it may come to the point where they don’t even want to deal with you.
- Trailerloads – Now we’re on to the big boys. These are your chains of automotive dealerships or very large HVAC repair business in a larger city or in a network of cities. A trailer load of refrigerant is set at twenty pallets times forty cylinders a pallet or eight-hundred cylinders of refrigerant. Like before these buyers are certified with the EPA either through 608 and 609 and a corporate buyer is most likely co-coordinating the purchase and distribution of the trailer-load. This buyer will need to provide the 608/609 number of one of the technicians that work for the company. There are a few things to note when buying a trailerload of refrigerant:
- Freight should be pre-paid by the vendor. There should be no question in this. If you are spending that much money with them they should be more then willing to pay for the freight.
- Freight leads me right into my next point. When buying a trailerload you should be able to negotiate multiple drops of your trailer with your vendor. What that means is if you have a dealership in Kansas City and one in Saint Louis that the trailerload will drop ten pallets in Saint Louis, go across I-70, and then drop the remaining ten pallets in Kansas City. This should come at no extra charge to you as again you are paying for a full trailerload of refrigerant. Depending on the carrier and the vendor you are working with you should be able to squeeze our two drops maybe even three drops as long as the cities are close to each other.
- The door is wide open to negotiate on price when dealing with twenty pallets. Distributors love a trailerload shipment because it’s easy. If done right they can purchase it directly from their manufacturer and have the manufacturer dropship the product without the distributor even touching the goods. The only thing they’d have to do is co-ordinate the shipment and the delivery. Because this is easy for them and they are getting a large sale you have plenty of room to negotiate that price down.
- The last point I’ll make on trailerload purchasing is that there is the possibility to contact the refrigerant manufacturers directly instead of going through a distributor. Remember how I said that the distributor wouldn’t have to touch the trailerload? Well, the manufacturer is the one doing the work now. Wouldn’t it make sense to cut out the middle man and go right for the manufacturers? This will save you quite a bit of money and will allow you to build a relationship with the manufacturer for your next large purchase.
When To Buy
I mentioned this earlier but refrigerants are a commodity. What I mean by that is that their prices can change at the drop of a hat. I like to use the analogy of the price of oil. We always hear about the price of oil going up and down per barrel. One day it’s this and the next day it’s that. It’s just a fact of life. Refrigerant is very similar to this except we just don’t hear about it in the news.
Predictably, refrigerant’s highest price for the year is in the dead of summer. That goes for the homeowners and the business owners. If you are an HVAC company in July and you find yourself out of refrigerant you are going to be paying a pretty penny to get some more. At that point the price almost doesn’t matter. Without it you can’t do your jobs and your techs sit. On the reverse side the bottom price for refrigerant is winter. It’s that whole supply and demand thing again. No one is buying much in winter so the price tends to drop and drop until the Spring comes.
Typically the price will peak towards the end of July or in August. There have been a few times where I have seen September carry a high price but it usually comes down when October comes around. Instead of experiencing a typical crash the price will slowly creep down with each week that passes by until we hit December and January where the price is the lowest it’s going to get.
This December and January time is the absolute best time to buy if you are worried about price. There has been enough time for the previous summer’s inflated price to die off and the new demand for the next year hasn’t begun to hit yet. If you wait until February you are going to begin to see prices start to rise. The reason that is a lot of these bigger companies who can handle trailer loads begin buying multiple trailers in preparation for the upcoming Spring and Summer season. It’s usually about mid-February when these big orders start coming in. The trailers usually hit the buyer’s docks a couple weeks from there and then they are ready and rearing to go for March all the way until the end of the year.
The last thing I’ll mention in this section is that if you are one those early buyers is that you need to watch the market when summer comes. I remember one year where I had bought at sixty dollars a cylinder for R-134a in the winter. Then, that summer the price kept climbing and climbing until it broke two-hundred dollars a cylinder. Here’s the problem though. Our guys were still selling cylinders at eighty or ninety dollars a cylinder. We sold out in no time and only found out later that we were priced WAY below market. We left a whole bunch of money on the table. Don’t let that happen to you. If you see the market climbing don’t be afraid to raise your prices as well to keep in line with the competition.
Where To Buy From?
First things first before we get onto the different distributors I want to point out that all these companies are just that, distributors. They are not manufacturing this product. Refrigerant primarily comes from one of four places: Honeywell, Chemours, Mexichem, and Arkema. The only thing you have to look out for when dealing with distributors is making sure that you are not getting imported Chinese product. A lot of the times the Chinese product is bad quality, not mixed correctly, or is not even the right refrigerant that you ordered. A safe practice when dealing with a distributor is asking exactly what manufacturers they carry. That way you know exactly what product you are buying from and I can assure you that if it is from one of those four names that I mentioned above that you are getting quality product.
Yes, of course Chinese product is available… but it is tough to know exactly what product you are getting if you decide to import product yourself. Manufacturing refrigerant is complex and some imported refrigerants will not have the exact same chemical formula as locally made product. Now, this could be due to ignorance or the exporting company trying to get their cost as low as possible. Some of these concoctions are harmless but others can result in increased flammability which could lead to injury to you or technicians. Best advice I can give is to do your research and to know exactly what you are getting.
Alright folks well that is everything that I have learned and know about purchasing refrigerant. I hope that this guide was useful and will aide you with your next refrigerant purchase.