Examining Distributor Relationships

NEW ORLEANS - At the 2004 Air Conditioning Contractors of America (ACCA) Conference, a panel of business leaders in HVACR distribution talked about the dynamics of the distributor and contractor relationship within the trade. The panel consisted of Don Frendberg of the Heating, Airconditioning & Refrigeration Distributors International (HARDI), Columbus, Ohio; Randy Tice of APR Supply Co., Lebanon, Pa.; and Frank Meier of Meier Supply Co., Johnson City, N.Y.

Frendberg started the discussion with a couple of facts about distribution:

  • There is $2.91 trillion in total revenues in U.S. wholesale distribution business.

  • One out of every 20 U.S. jobs is in wholesale distribution.

    He stated that HARDI is the "single voice of wholesale distribution in the HVACR industry, accounting for $17 billion in sales in 2003.

    "Our basic focus at HARDI is education," Frendberg said. "Our job is to make wholesaling more efficient and to remove redundant costs."

    He pointed to some developing trends in the trade: business relationships are becoming in-creasingly critical; value-added services are expanding to meet customer needs; and distribution has formed alliances to cut costs.

    Frendberg said that contractors deserve the best customer service from distributors, stating, "Contractors have the right to responsiveness, products in stock, on-time delivery, proximity to their location/customer, price consistency, product variety/quality, order/invoice accuracy and integrity."

    Meier said that he provides good customer service because he surveys his customers regularly in order to see what is important to them.

    He said there are questions that contractors should ask of their distributors, including:

  • Can they help with warranty issues? "We have more leverage with manufacturers when it involves warranty parts problems," Meier said.

  • Do they offer 24-hour service or do they post their hours of operation? Do they offer convenient locations?

  • Are the stores clean and laid out properly?

  • Can they support your stock or offer special inventory items?

  • Can they help you sell?

  • Do they offer training? "We suggest that distributors support training from various organizations," he said.

    Of his own company, he said, "We have improved storage and supply chain logistics. Our goal is to achieve 99.8 percent accuracy."

    One of his company's goals is to put UPC bar codes on approximately 1.5 million products. "It is very important for inventory accuracy," Tice said.

    He said that one of the services he offers is to go into his customer's business and bar code the inventory. He also provides contractors with a Palm Pilot to inventory the products via the bar codes, saving contractors a lot of billable hours. "Being able to handle inventory in a contractor's shop doesn't cost distributors money, it saves money. And there is less traffic tie-up during busy times."

    Tice encourages a cooperative spirit between distributors, too. "It is getting to the point where distributors are sharing information with each other in order to deliver products when and where they are needed," he said.

    For more ACCA conference coverage, see "Tips For Managing Cash Flow" in this issue.

    Publication date: 05/03/2004

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