ACHRNEWS

Source 1 Watches The ‘3.5 Factor'

October 13, 2004
NORMAN, Okla. - York UPG's replacement parts and supplies group, Source 1, is a big proponent of the "3.5 factor."

"The number 3.5 is mentioned frequently when we talk to our distributors about growing their business," said Ben King, vice president of Aftermarket Sales and Service.

In King's estimation, the 3.5 factor is prevalent in the HVACR parts market. For instance:

  • The average dealer visits the distributor 3.5 times per week for replacement parts and supplies.

  • The average purchase on a repair bill includes 3.5 parts.

  • Each dealer has about 3.5 trucks on the road.

    With the above statistics in mind, York UPG said its approach to the burgeoning HVAC replacement parts business is to work in concert with its strong network of equipment distributors.

    "Our York, Coleman, and Luxaire distributors want to strengthen their relationships with their dealers," said King. "With 3.5 dealer ‘touches' per week, a distributor wants to offer a strong portfolio of equipment for commercial and residential markets, as well as a full line of replacement parts."

    One way York UPG works to enhance the buying experience for its equipment customers is by providing a merchandizing concept called the Source 1 Ideal Store.

    This concept is designed to support dealers by offering a one-stop shop for equipment, parts, and supplies. Source 1 considers availability as the key market dynamic in the parts business.

    "We know the three keys to the parts business are availability, availability, and availability," King told The News. "We support our distributors by providing a one-stop shop, merchandizing, and point-of-sale programs, and a complete, competitive product offering.

    "Our dealers, when visiting a distributor with an Ideal Store, will find a well-merchandized, well-stocked parts and equipment outlet. Additionally, they will find important technical and training information. The look and feel suggests a ‘retail' approach. We strive to achieve a purchasing experience that is both value-added and efficient."

    Based on reaction and comments from dealers and contractors, it appears the Ideal Store Concept is a hit for Source 1.

    The Source 1 Ideal Store concept not only stresses having parts in stock, but having the look and feel of a retail outlet as well. Pictured above is the Lenexa, Kan., store, which strives to achieve a purchasing experience that is value-added and efficient, according to the company.

    A-OK With Source 1

    For instance, Fred Byrd of Plumbers Supply in Louisville, Ky., subscribed to the Source 1 Ideal Store concept early. Byrd believes that "the HVAC wholesale parts business is becoming more and more retail. Point-of-sale items and store merchandizing are both huge elements of customer service. This concept combines both of these variables with proven methods to enhance the customer experience."

    Meanwhile, McCruddens Supply in Youngstown, Ohio, is a long-term Luxaire distributor that only recently began carrying aftermarket parts and accessories.

    "The addition of the Ideal Store program has had a very positive effect on our parts business," said Joe Furlong, purchasing manager-HVAC parts. "Not only has it showed our customers we are committed to the parts business, but has given our showroom a fantastic look that our customers find appealing."

    In the Baltimore area, employees at York distributor UPD know how important parts are to the contractor, to customers, and to the company's bottom line. UPD's focus on parts is a core business philosophy, and it has showrooms in each of its three locations in Maryland and Virginia.

    "The Source 1 Ideal Store concept gives each of our locations the same look and feel," said Richard Hicks, parts manager at UPD. "It's a professional look that really enhances our showrooms and tells our customers we are a complete wholesaler."

    Jeanette Sheehay, store manager for CFM Distributors of Lenexa, Kan., echoed Hicks' critique.

    "I like the concept," she said. "It's informative, bright ... It gives our store a face lift."

    Extra Effort

    Sheehay encourages contractors and customers to stock up on the parts they need and use the most. By adopting this practice, she said, a contractor will spend less time in acquiring parts. And, as business owners know, time is money.

    "Why not stock them on your truck?" she asked. "You become more efficient then. Buy the parts that you need the most."

    However, Sheehay is quick to point out that each Source 1 store will have the parts a contractor needs, whenever the contractor really needs them.

    Don West, of Don West Cooling and Heating Inc., Shawnee, Kan., will attest to that. On more than one occasion, the York dealer has needed an item from a CFM Distributor store, and someone was there to open a closed store to get the needed part for West.

    "They always meet our needs," said West. "It doesn't matter when. They've given us a list of contact numbers, which we call and usually it's the branch manager that will come to open the store to get the needed part. It has been in the middle of winter and we needed a blower motor, they were there to open the store and find the part. That's a big plus for us and our customers."

    Without hesitation, West added that he passes along information to fellow contractors about how CFM Distributor outlets - and Source 1 in general - have been good to him and his customers.

    "We feel like we have a partnership," he said.

    Here's betting West spreads the word to more than 3.5 contractors a year.

    Publication date: 10/18/2004