By Bridget McCrea
Wouldn’t it be great if you could get into the minds of contractors and find out what they want from their distributors, what red flags and warning signs they watch for, and what they feel their distributor channels could be doing better? Armed with this information, electrical distributors could hone their products, service, and support in a way that would not only ensure a steady stream of new contractor-customers, but that also would keep current clients coming back for more.
Good news – TedMag.com did the legwork for you by interviewing two Independent Electrical Contractors (IECI) members to find out what criteria they use when selecting new distributors and forming long-term partnerships with them. Relationship building appears to be the name of the game for contractors in today’s business world, but there are a few other issues that are top of mind for these types of customers.
The Whole Package
At Sammarco Electric Company in Memphis, Tim Sammarco, president, says his team looks for distributors that can offer the “whole package,” and that excel across the board – not just in one or two areas. “We want good product lines, a great support team, excellent service, and competitive pricing,” says Sammarco. “We also want distributors who will stand behind us on an order and make sure we get it within the specified timeframe.”
Both pricing and delivery times have been even more critical in today’s competitive business environment, where contractors like Sammarco Electric are up against dozens of other firms when bidding on jobs. “There’s a tremendous amount of pressure on price, which is somewhat more relevant than it was in the past – but it’s not everything,” says Sammarco. “Previously we could always work the numbers out, but today we’re losing $90,000 jobs by coming in $300 higher than our competitors.”
That pressure trickles down to the distributor, who may get passed over for coming in just a few percentage points higher than its competition. “If someone gives me a $32,000 price on a fixture, and if the next guy comes in at $31,600, I’m probably going to go with the bid that’s $400 cheaper,” says Sammarco, whose firm has an established network of three or four electrical distributors that it works with on a regular basis.
Having those working relationships in place helps when negotiating those $400 differences or when expediting orders. “Ultimately, we want to establish working relationships with distributors so that when problems arise – and they always do,” says Sammarco, “we can work through them together.”
Sammarco also keeps an eye out for red flags that indicate possible problems with the contractor-distributor relationships that his firm has formed. Service slipups and neglecting to issue credit memos are two early warning signs that he watches out for. “Pricing can usually be worked out, but if there’s a slip in service we take it pretty seriously,” says Sammarco, who will ask questions like: Are you guys busy? Is someone on vacation? Is someone on your inside support team sick? What’s happening here?
“If we find out that everything if fine – and if the distributor continues to slipup after we’ve brought the problem to light – then we go elsewhere,” says Sammarco, who recognizes the fact that distributors face their own sets of challenges in today’s competitive business environment. Taking on credit risk and shipping orders without knowing whether the customer will pay or not, for example, can put electrical distributors in a tight spot.
“We know our suppliers are grappling with a lot and that’s why we strive to establish long-term relationships with them,” says Sammarco, “knowing that in the end affiliations help everyone involved.”
Free Delivery, Please
Greg Haren and Jimmy Burgy of Enertech Electrical in Lowellville, Ohio, also work to establish ongoing relationships with their electrical distributors. Service, on-time delivery, pricing, and plain old honesty are high on their criteria list when selecting and working with those distributors. “If a delivery is going to take three weeks then we want to know upfront,” says Burgy, purchasing manager. “We don’t want someone to feed us a lot of lip service just to keep us happy.”
Like Sammarco Electric, Enertech Electrical also gets beat up on price in the marketplace, where just a few hundred dollars can mean the difference between getting the job or not. “Everyone is hurting for work so they are all low-balling their bids,” says Burgy. “If we don’t get the right pricing upfront we don’t get the job. Plain and simple.”
Haren, CEO, says he and Burgy keep a close watch on the service that the distributor provides both during and after the sale. Delivery times are also critical, namely because job timeframes are getting “tighter and tighter,” Haren says. “We’re always under the gun to get things done quickly, so we depend heavily on the supplier’s ability to meet those delivery demands.”
Burgy says a distributor’s willingness to provide value-added service (such as warehousing fixtures at their facilities until Enertech needs them) and perks (like free delivery and no fuel surcharges) often sway him to work with one supplier over another. “If a distributor isn’t going to offer those services, then we may not do business with it,” says Burgy. “We don’t have the room to store everything here onsite and we don’t want to pay for delivery if we don’t have to.”
McCrea is a Florida-based writer who covers business, industrial, and educational topics for a variety of magazines and journals. You can reach her at firstname.lastname@example.org or visit her website at www.expertghostwriter.net.Tagged with tED