To better help electrical distributors respond to the needs of electrical contractors, the Electrical Distributor, in a monthly Q&A is asking contractors respond to questions concerning their relationships with distributors.
The question for the June Q&A is: How do you see the
electrical channel model (manufacturer > distributor > contractor
> end-user) changing in your lifetime?
Responding is Dave Gilson, the owner of Tera-Byte Technologies in
Aloha, Ore.; Hugh Joyce, the owner of James River Air Conditioning in
Richmond, Va.; and Brian Bonner, vice president of Bonner Electric in
Uncasville, Conn.
Gilson: “There will be change in the way
parts get to the contractor. Both from the use of technology and the
need for creative business ideas just to keep ahead. The younger
generation of electrician is quite used to placing orders online rather
than by a phone call.
I can see future daily distribution practice consist of placing your
order online and having it delivered from warehouses by truck, and
having all the necessary paperwork and documents being sent and
processed electronically from order-to-receipt all within the same
business day.”
Joyce: “The standard distribution system is about to
be turned upside down. Technology will totally change how we get,
install, and service electrical products. Most products will ship direct
via some sort of online and smart phone order system. The supplier to
contractors’ primary function will be logistics not hardware. Everything
will get faster.”
Bonner: “The biggest change that I currently see
occurring, especially where new technologies are involved, is the
manufacturers selling directly to the contractor and end-user. This is
prevalent in the EV charging and solar PV markets. This puts additional
pressure on the distributor to find a way to add value to the process
such as product awareness, having inventory readily available locally,
providing educational/training functions, and support in the case of
product damage/warranty issues.
“We are also seeing an increase in manufacturer direct sales where
large customers or national account relations may exist—in many of these
cases the contractor is brought in merely to provide installation of
packages that were pre-purchased directly by the customer, essentially
cutting out the distributor and contractor from the purchasing equation,
while still leaving it up to the contractor and distributor to handle
any issues that may occur. This direct sale model also requires the
contractor to assess the value (or risk reduction) that he is providing
to the end customer and continually make adjustments.”