Guest blog by Tom Naber, President and CEO of the National Association of Electrical Distributors
This week, tEDmag.com carried a story about a cabling manufacturer that switched to the distribution channel after more than a decade of selling direct. The reason? Its contractor customers asked for it.
Every so often, we hear rumblings in the age-old direct vs. distribution debate. In fact, a member recently pointed out an article in BICSI News Magazine that took the pro-direct view.
It’s always important to remember our manufacturing partners and customers have options, but it’s equally important to remember the vital role distributors play in the supply chain.
Distributors bring value to both sides of the supply chain. They are the pipeline that moves product, allowing customers and manufacturers to focus on the things they do best: Win and complete projects, and craft and make innovative products.
Many contractors buy for reasons beyond price. Timely, local deliveries, inventory management, credit services and third-party advice — these are just some of the critical services distributors pass on to customers, saving them time, costs and resources they might otherwise burn through.
Likewise, we provide the infrastructure manufacturers need to bring their products to market. Promotional support, custom-order coordination, logistics and returns are among the benefits we offer our supply partners. While there will always be manufacturers that choose the direct selling approach…
We’ll Still Be Here
Hundreds of manufacturers still value the $70-billion-plus electrical distribution industry as the best route for bringing product to market. Here’s why:
- Convenient, one-stop shopping: Distributors stock an array of brands, technologies and supplies to meet the needs of their customers. They package individual supplies into convenient, time-saving kits and store the products until you need them. Imagine the investment you’d need in warehouse space alone if you had to start buying direct.
- Trained and experienced sales professionals: Many have years of experience under their belts and are trained and well versed in electrical products. The Certified Electrical Professional designation helps contractors recognize these individuals. Distributors require hours of annual in-house training, and many manufacturers work with their distribution partners to provide sales training.
- Logistical infrastructure: Electrical distributors understand the needs of the markets they operate in because they’ve spent decades cultivating local contractor relationships. As their customers grew, many also expanded, opening branches in strategic locations to bring the same timely and dependable services to their customers.
What We Can Take From This Debate
For many in the electrical industry, this debate is a no-brainer: Direct buying and selling just isn’t a practical, all-encompassing solution. There are, however, people who continue to like to undermine our channel.
Let these moments be reminders that our industry is operating under fiercely competitive conditions and that demographics, supply-partner concerns and customer needs continue to change.
This debate will continue so long as technology excites and enables the sell-direct crowd. And distributors need to be listening.
Virtually anyone can set up shop online, but can these folks replicate our value-adds? We need to be watching for unseen challenges they recognize first and what other solutions they bring to the table.
Similarly, the debate exposes the necessity of websites and e-commerce capabilities. These are no longer options. If you don’t have a web presence, you don’t exist to a growing rank of customers that turn to Google before anything else. Plain and simple.
NAED is arming its members with the resources and tools they need to take their businesses ahead. Visit the NAED Technology Task Force to obtain strategies and best practices for using technology to effectively engage customers.
One final thought: Lack of product knowledge is a common charge among manufacturers that choose to sell direct. Distributors have a responsibility to ensure their sales teams are familiar and confident in their knowledge of the products they sell.
Professionalism and quality are essential for maintaining the viability of the channel. Encourage your people to participate in programs like EPEC, CEP and other resources on the NAED Learning Center. Investing in ongoing industry training and education shows your customers and supply partners you take these traits seriously, while also strengthening your business.Tagged with tED