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Top 20 Stories of 2014: #18 Contractor Talks About What Makes The Ultimate Distributor

Every weekday in December, tED magazine is counting down the Top 20 Stories of 2014. Below, the #18 story of 2014, originally posted on July 25, 2014.

By Jim Williams

For this edition of Contractor’s Corner we put Sean Spence, Sr. Purchaser for Northern Electric, Inc. on the hot seat. We asked him what does the perfect distributor look like?

We prefaced the question by telling him it was OK to go Weird Science on us in hopes that his dream distributor would come out looking like Kelly LeBrock from the 1985 hit movie.

Spence:  This question hits close to home – well, not the Weird Science reference, but the ideal distributor. Northern Electric, Inc. (NEI) is a national contractor so this definitely hits home for me.

Obviously, a good size footprint in the country is nice. One company in particular that I like that has a good system set up is Graybar, headquartered in St. Louis.

They have these things called zone warehouses. I’ve never physically seen one of their zone warehouses; they don’t have one in Denver. But I know when I call, a lot of times they may have a lot of items that the store doesn’t have and they have them in much larger quantities. And they are pretty good at turning it around.

Ideally I work with two or three distributors nationwide. I like to be able to pick up the phone and call my rep. Again, Graybar does a good job in that all of their computer systems are linked together, and so when I have a good rep he can go into the system and actually place the order in the Graybar in Panama City and the ticket gets pulled and more often than not, 75% of the time, that item gets picked, they run it, put it on the truck and deliver it.

A nice large distributor with a national footprint and national access from branch to branch is one of the main things I look for when dealing with somebody.

tED: You mentioned the rep. In your ideal world, what would a distributor/rep say to you to get your business?

Spence:  That’s hard because I don’t award business based off what they say to me. I don’t do business based off of a buzzword, or a sales proposal. For me, a lot of times, if I let them in front of me, I need to know about the company they are working for. And then, and I don’t know how else to say this; I generally like it to be more of a professional looking person. There are different types of sales guys. There are the guys that bounce around from supply house to supply house. They make the big sale and in the meantime they tick off everybody, all of the contractors, and then they jump over to somebody else to try and get a completely different list of clientele.

I can always tell from their presentation, first impression means a lot to me. Do they have a professional appearance? Now, I don’t expect a three-piece suit, but someone who is cleanly dressed, someone that you can tell is mature, you know his or her pants aren’t wrinkled. It’s little things like that I pick up on – you know if it’s a 25-year old guy that’s pants are wrinkled, shirt is wrinkled and his hair is messed up, you know he’s probably been out drinking until 3 a.m.! I can pick up that.

tED: If you were starting a distributorship what would you do to try and get contractors to buy from you?

Spence:  First thing I would do is pick a segment of whatever industry I decide to venture into and dedicate myself to that one. If I am going to be a resi distributorship, I am going to stick to resi and I’m going to stock as much resi material as I know a residential contractor is likely to use.

If I am going to be an industrial distributor, I am going to pick a specific industry – am I going to go after contractors that just do schools, etc.?

After I pick the industry I would make sure that I stock as much material that is going to be used by somebody like that…in this example I would know that because I myself, I am an electrician. Another thing I’d like to say is that I would make sure that I have people that work in my distributorship that know what contractors do. I would hire people with experience in the industry. And, I would also pick account managers/sales reps that have a pretty intimate knowledge in that industry.

One other point, a lot of supply houses pay on a commission only basis, so you sort of get what you pay for – not 401 basis, salary, benefits – it’s usually just commission or commission draw. I wouldn’t do that. I wouldn’t structure my business to where I want people to just try to make sales. I want people to partner up…you asked me earlier what a rep could say to get my attention – someone who generally wants to build a general partnership, or relationship between their company and mine; not just sell me material.

That someone would know what they are talking about. They need to know the industry that I’m in. So often I get sales people that come in here and ask me what Northern does. Well, we have a website and pretty much everything we do is on there. So, anyone that has experience in the electrical world would know what we do from looking at that and therefore would know what sort of materials we need. They would know where we are working.  If someone comes to me and already knows about Northern, that’s the first thing. Someone that can mention some projects we’ve worked on, the size of our company, some history things…that is what would really capture my attention. Again, someone that really wants to partner up with our company, not just sell us material.

tED: How often should your rep show his/her face?

Spence:  We have one company, Consolidated Electrical Distributors (CED) that is another good company that has a huge footprint in the United States. Our rep is fantastic. He comes every Wednesday like clockwork. So, once a week works perfect for me. Also with technology, we communicate a lot with telephone and email. But I like to see him once a week. That let’s us get into a little more in-depth conversations and kind of get to know each other personally. So, once a week works great for me. If I need something extra I will reach out to them.

tED: What about issues? Wrong products? Return policy?

Spence:  As far as returning materials, it does happen some times and a good distributor will typically let you know up front if it’s a special item, or a cut item or stock item. I don’t like restocking fees. I always say we don’t order as much as we probably should sometimes just because of the fear of re-stocking fees. As far as the rep, I expect them to handle the entire thing from beginning to end – tell them where it is, how much is there and I expect them to send out a truck to pick it up, return it, or restock it or credit us (less the restocking fees).

tED: Anything else you want to include about the perfect distributor?

Spence:  It’s really sort of basic. A lot of times people like to muddle things. For us, we like to keep things pretty simple. A lot of distributors are trying to do a lot of fancy, schmancy kinds of things to try and get contractors in – and with us, at the pace that we are going and the type of work we do, we don’t need anything fancy. All we need is a good representative who is going to support us that is not just a salesman. He’s going to not only make the sale, but he’s going to follow up with the sale all the way through to the end. If there’s a problem, he’s accessible. He’s not going to pass it off to someone else.

In conclusion, a perfect distributor needs to know who their customers are and what their customers needs are and then tailor what they do to each individual customer. I think that is what a lot of distributors have lost sight of because they are so corporate now. Gone are most of the small electrical supply houses that are independently owned and operated to take care of people – they are all being bought up. A lot are just becoming big, corporate giants. The personal relationships we used to get are now gone because there is so much turnover because they are all expected to do so many things and once they don’t do it they get rid of them and they bring a new guy in. So, I would say the representative/Account Mgr that is the most important thing distributors can do to take care of contractors.

And stock the materials. Tell us what you have and how long it is going to take to get the materials you don’t have to us. Take care of it from birth to grave. That’s it. It really is that simple in a lot of cases.

Spence has been with NEI since 2007 and is responsible for the purchasing of building materials and equipment for national projects among his many duties.  He has spent his 17-year professional career in the electrical field in the state of Colorado. Originally from Indiana, Spence is a former Sergeant in the United States Army.

NEI is a full-service national electrical contractor based in Colorado and found in 1975. They specialize in industrial, oil/gas, manufacturing and special systems. You can learn all about them by visiting their website.

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