The NEWS wanted to know what impact eBay has made on HVAC contractors and whether these business owners have embraced eBay as an alternate source for customers to buy equipment and have themselves, the brick-and-mortar contractors, perform the installations. If HVAC contractors haven’t embraced this concept, they probably have bought into it simply because of their own personal buying habits.
Four of the several contractors who were contacted for this story represented two differing opinions on installing equipment they don’t sell.
“Actually I buy and sell via eBay - I really don’t see them as a threat,” said Bob Rohr of Show Me Radiant Heat & Solar, Rogersville, Mo. “I have installed systems sold by others. It needs to be made very clear where I, as the installer, start and stop in regard to warranty issues.”
Rich Krohn of Krohn Refrigeration Inc., Manalapan, N.J., sees it the same way. “If you do not sell the machine, then you do not have to lose money when it breaks under warranty,” he said. “We take the bad part off and hand it to the customer and tell them to get it replaced under warranty from whomever they bought it from, and call us to put the new part in after it arrives. They are paying for the labor from the get-go.
“We also point out if they had purchased the machine from us we would be doing all the running around for the part exchange instead of them. This works like a charm most of the time, and when it comes time for them to get new equipment, we generally get the sale.”
Greg Akers of Dial One Hour, Indianapolis, Ind., represents another point of view - contractors who won’t install what they don’t sell. “I would rather make the profit from the equipment markup and do not want to be responsible for any hidden shipping damages,” he said.
“If the unit doesn’t work out of the box, then the consumer may think the contractor damaged it.” That same point of view was shared by Rich Lorimer of Modern Piping Inc., Cedar Rapids, Iowa. “I can still make a profit off of the labor but it takes the same amount of time and the profit margin is not there if I’m not getting the mark up of the equipment,” he said.
“Also if there are problems with the equipment down the road, whose fault is it going to be, the equipment or the installer? I’m not going to warranty equipment I didn’t sell but did install. It’s a ticklish area best to avoid.”
USING THE WEB TO FIGHT BACKFor the most part, contractors who spoke with The NEWS viewed the big box stores as bigger competition than eBay. John Levey of Oilheat Associates, Wantagh, N.Y., said it is the big box stores he worries about.
“There are many people who go to Home Depot and price thermostats, circulators, baseboard, etc. and decide what they think is “fair” markup and installation costs,” he said. “Then they accuse legitimate contractors of being rip-off artists when they try to get a fair price. These same people would never go to a supermarket, price a steak, and then accuse the restaurant of charging too much.”
But some contractors said that eBay was also a big threat. “eBay has given contractors’ employees and other side jobbers that are not licensed a much easier way to do installations,” said Dave Hutchins of Bay Area A/C, Crystal River, Fla. “They can have the equipment delivered directly to the consumer, spend little to no money upfront, and the equipment arrives days before the unpermitted job. So I think eBay is the larger threat, along with all the other services on the Internet.”
But having an Internet presence is one way to fight the eBay threat, according to some contractors. “Having a Website helps our customers make better buying decisions and enhances our efforts to make them customers for life,” said Bob Wilkos of Peaden Air Conditioning, Panama City, Fla.
Dial One Hour’s Akers noted, “We receive letters daily in our Ask The Expert section and also we book sales and service calls off our Website. We also have a section that has info on the systems we sell.”
Larry Sinn of The Service Co., Greer, S.C., thinks that having a Website with useful information helps one in five customers. “About 20 percent of our buyers look at our Website before, during, or after the sales call,” he said.
Fighting fire with fire may be the answer for competing against eBay but for respondents who talked with The NEWS, the summation word is caution. If HVAC contractors want to install equipment that their customer bought from eBay, they must be aware of the ramifications of installing nonwarranted products. And if they choose to use eBay as a selling tool, they may be opening themselves up for even more competition down the road.
Publication date: 01/07/2008