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Hitting the high points: What manufacturers love about distributors

By Bridget McCrea

It’s no secret that electrical manufacturers rely heavily on their distribution networks to get the word out about their products, recommend those products for the correct applications, demonstrate those products for customers, and then close the deal not just once, but time and time again. Distributors are equally as reliant on their vendors to develop quality, useful products and then support the sale of those products through a combination of marketing, joint sales calls, and/or customer service. 

When Jim Kosciolek ponders the best aspects of working with a network of distribution partners, the first thing that comes to mind are the significant contributions they make when it comes to getting Cincinnati-based ILSCO’s electrical products into the hands and minds of end users nationwide.

“Clearly electrical distribution is an absolutely essential link in the chain of selling our products,” says Kosciolek, senior vice president of sales and marketing. “Distributors provide a critical avenue for reaching the end users of our products, whether those customers are contractors, industrial facilities, panel builders, or the like.”

Very difficult to duplicate

Distributors also provide services to end users that electrical manufacturers would find “very difficult to duplicate,” Kosciolek adds. “One of the biggest things that they offer is a local inventory to provide immediate product availability to electrical product end users.” Distributors also take the pressure of accounts receivable and collections off of the manufacturer and put it squarely on their own shoulders. “ILSCO would not be anywhere near as effective in the marketplace without electrical distributors,” Kosciolek says.

Greg MacDonald, vice president of electrical distribution at Coleman Cable, Inc., in Waukegan, Ill., concurs, and says that the distributor’s role as a holder and shipper of inventory is extremely important to his firm. “That is a key ingredient for our business,” sys MacDonald. “The distributors that stock our full compliment of products play a very important role in our operations; they are the nuts and bolts.”

MacDonald says Coleman Cable also benefits from distribution’s knack for getting out into the field and pushing, demonstrating, and selling products that meet customer needs. “When we’re introducing a new product or new product line, we depend on our distributors to help us get those new offerings out into the market,” says MacDonald. “They are very good at that.”

Brian Stowell, North American marketing manager at Fluke Corporation in Everett, Wash., says he’s impressed by the way many distributors have adapted to the challenging economic environment. Inventory management is one area where many have stepped up their games, he says, and learned how to more efficiently balance customers’ needs with inventory capabilities.

“With the economy growing at a much slower pace than it was in 2007-08, many of them have learned how to better manage their inventories,” says Stowell. “In fact, from late-2008 to today, most distributors have started paying close attention to inventory management. They’re not sitting on as many weeks’ worth of inventory that they once were, and they’re actually managing on very, very thin stocks.

Going high tech

The most tech-savvy distributors are also making an investment in new marketing methods, says Stowell. They’re developing marketing webinars, setting up social networking presences, and experimenting with automated lead generation systems. All of these efforts complement the marketing and outreach efforts that are being created by the manufacturers themselves.

“We’re seeing innovations like automated lead generation tools working particularly well for some of our distributors,” says Stowell, who sees that foray into tech-based marketing tools as a positive move for distributors who are looking to leverage their advertising and promotional dollars. “Some distributors are getting pretty good at using these marketing awareness activities and other methods to generate new business.”

Distributors are also paying close attention to existing business and doing what they can to eke the most benefit out of the customer relationships that they’ve been honing for years, or even decades. “Distributors are always looking for different ways to service their customers and are using tools like the Internet to do that in the most efficient, effective manner possible,” says Stowell. “They are pretty good at offering up services that ensure that the customer keeps buying from them, and that’s a big plus for the manufacturers that they represent.”

Selling the system

At Honeywell in Morristown, NJ, Randy Lee, national sales manager, says the manufacturer’s top distribution partners sell “the system,” versus just bits and pieces of the company’s offerings. “They know that contractors don’t just purchase wire; they buy wire to connect things or power things up,” says Lee. “The best distributors work on this [philosophy] and understand the value of selling entire systems – not just individual products.”

Some distributors handle the task of selling systems instinctively, says Lee, while others need support from manufacturers in adopting that mindset. Honeywell, for example, runs a marketing campaign called, “We’ve Got a Cable for That!” to enable the process. A generic version of the campaign shows the interrelation of disparate fire systems, lighting controls, and television cameras, for example, while a cable-specific version caters to specific product lines (a fire alarm version for Fire-Lite alarms, for example).

Lee says distributors also stand out in their ability to work closely with manufacturers to put together marketing campaigns, demonstrate specific applications, and net large accounts. Those distributors that understand that the selling process involves various customer levels – ranging from the manufacturer, to the homeowner, to the commercial building owner, and everyone in between – tend to “understand the sales cycle the best and sell the most product,” says Lee. 

Sniffing out opportunities

Where distributors seem to add the most value for manufacturers is in their ability to sniff out new market opportunities and then knowledgeably represent their vendors when selling to local customers. This is something that no individual manufacturer would be able to accomplish on its own due to resource constraints and an inability to cover every single geographic region in North America and/or beyond.

“Electrical distributors are excellent at marketing a manufacturer’s product at the local level, where the customers are,” says Kosciolek. “Getting that job done would be extremely difficult for us without a distributor in the mix.”

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