Here are seven things that electrical contractors say they want from their electrical distributors this year.
In the Chicago market, electrical contractor Newport Industries, Inc., has roughly 50 different electrical distributors to choose from. “They’re everywhere,” says Jeff Weir, vice president. “Because we have such a selection here, we don’t need ‘just another number’; all of our quotes are coming back within a percentage point of one another.”
What Newport Industries does need are electrical distributor-partners that provide a high level of service and support to go along with their competitive bids. “Service is the only thing that will separate us from paying a 1% or 2% difference across all of the bids that we’re getting,” says Weir, who is at the point where he’s not even asking his team to “got out and get five or six bids because it’s just wasting everyone’s time. It’s not going to move the needle.”
Instead, the contractor just gets two or three bids on specific orders, reviews those bids, and then makes its selection based mainly on the level of service it will get from the winning distributor. “Everything seems to be almost commoditized at this point,” he notes, “so our choice isn’t necessarily going to be based on price.”
7 Things Your Contractors Want from You
Weir isn’t alone in his desire to work with a smaller pool of vendors that just instinctively know what his electrical contracting firm wants and needs—and then fulfills those wishes in a frictionless way. Across the country, your electrical contractor-customers’ needs are changing, and they expect your distributorship to be able to keep up and stay in step with those changes. Here are seven things that they’re asking for right now:
- In-stock inventory when they need it. As companies try to work leaner, and as contractors try to cut down on their inventory carrying costs, they expect their distributors to take on some of that burden. It’s just the nature of the beast, even if it’s an expensive proposition for the distributor itself. Add Amazon Business’ same-day and next-day delivery promises to the equation and it’s easy to see why maintaining good stocking inventory levels is more critical than ever.
- Competitive pricing on all bids. At Maglio Electric, LLC, in Hampton, N.J., President Anthony Maglio, Jr., shops around for nearly everything that his company buys—including all electrical supplies, components, and equipment. After sending out a request for price and availability on, say, 15 different items, he then goes over the bid line by line and compares those numbers across five (or more) different supply houses. “I’m not going to waste your time, so please just give me your best number,” he’ll often tell those providers upfront, knowing that bottom-line cost will likely dictate his selection process. Sometimes, Maglio gets flack for taking that stance, but he stands by it. “They don’t always like the fact that he shops around so carefully,” says Justine Maglio-Wardell, office manager, “but hey, we’re in business to make money.”
- Information and education on the latest products and services. Busy with the day-to-day demands of running their businesses, electrical contractors simply don’t have the time to keep up with the latest and greatest equipment, products, and service offerings. This is an area where electrical distributors—and especially those that work closely with their manufacturers to stay on top of and introduce new products—can really shine (and where e-tailers like Amazon Business still fall short, at least for now). “Our supply houses do a good job of keeping us informed about the tools and products that will help us work smarter and faster,” says Maglio-Wardell. “We depend on them for that, and still see that as a viable way for them to add value to our business.”
- More flexible financing. Being able to offer lines of credit, extended payment terms, in-house financing (i.e., a monthly payment plan for a large purchase), and other flexible options can sometimes mean the difference between getting (and keeping) that contractor-customer, or watching it walk out the door. The economy may be good and customers may have money to spend now, but when that changes you’ll want to have some flexible financing options in your back pocket. And remember that your customers probably prioritize their accounts payable activity based on which vendors are most important to them. Make it easy for them to put your company at the top of that list.
- A streamlined invoicing process…preferably industry-wide. The process of issuing a single bill for all items sold to one customer over a certain period of time, and regardless of the number of shipments or purchase orders, invoice consolidation reduces the time and expense involved in processing a separate bill for each purchase. It’s something Gary R. Misicka, president at LaGrange, Ill.-based Lyons & Pinner Electric Companies would love to see his electrical distributors offering more of. “My foremen are calling in orders to various suppliers all over the Greater Chicago area,” Misicka says. “The materials get delivered and then I get an email or paper bill. By the end of the month, I have 600+ different invoices from vendors on my desk.” In a perfect world, those suppliers would find a way to consolidate those invoices and/or work together to find a way to streamline the process. “That would allow us to focus more on activities that actually make us money while also saving some paper,” says Misicka, who took his company paperless a few years ago with the help of a new enterprise resource planning (ERP) solution. “I still get paper invoices that need to be scanned in; it’s just paper upon paper and so many ‘touches.’ If we could somehow streamline that and drive some margin back on home for all parties, it would be great.”
- A core menu of value-added services. As Weir pointed out, price alone isn’t enough to make a bid stand out in today’s competitive construction environment. Rather than cutting prices by 1-2% and hoping it puts your bid at the top of the pile, take the time to outline the value-added services that you’ll provide along the way. Last-minute job site delivery, storage, vendor-managed inventory (VMI), and technical support are just a handful of the options that you should be highlighting on those correspondences. Combining storage services with on-demand job site delivery, for example, can be a huge benefit for the electrical contractor that’s working on a job site where there’s no room to store and stage equipment and supplies.
- Creative delivery and pickup options. In a world where online competitors are offering same-day delivery service on basic electrical products, electrical distributors need to think outside of the box when it comes to delivery and pickup. At Rexel in San Diego, Maxwell Gabin, branch manager, says the company has added new services designed to make life easier for its customers. Last month, the company installed lockers of various sizes (up to 10-feet-high) to the front of its building to make after-hours pickups more convenient for its buyers. “We give them a code to the locker,” says Gabin, “and they can come and get the orders at midnight if they want to.”