Distribution Center magazine recently interviewed Zeiad Hussein, founder of National Equipment Parts, a new online presence in our marketplace. His view of our industry and the role his company will play in it, provides for an interesting discussion of our future.
DC: Our sister publication, The News, ran a recent article about National Equipment Parts (NEP) and said that you hoped to become the “Amazon of HVAC.” Is that your actual goal? If so, what role do you feel NEP can fulfill that is lacking in the HVACR industry?
ZH: Nowadays, when I think of Amazon, it’s all about their logistics and fulfillment speed. In order for NEP to become the “Amazon of HVAC,” it has to zone in on fulfillment and plugging wholesalers, which allows for a very large SKU count and availability of inventory. Unlike many other e-commerce businesses where they sell what they have, my vision for NEP has always been to get the wholesaler involved. That’s the win-win scenario, and wholesalers appreciate that. The online market is here to stay. Amazon didn’t destroy publishing houses; the internet happened, and Amazon was in the perfect position to take advantage of it. We hope to do the same but with a different take on it, as NEP will empower its partners.
DC: Tell us a little about NEP Web Services and how you came about to identify that this solution was needed.
ZH: NEP Web Services is the software arm of NEP, and it is becoming even larger than the e-commerce side of the business. With NEP, we filled a void for the transactional side of the online business, which is where we needed to start. However, as we took an in-depth look at the market, one thing that was lacking was sophisticated software, more so micro-applications that allowed for less invasive integration projects with wholesalers.
One of the first products that we are getting ready to deploy is Textify Pro, a text messaging service for wholesalers and contractors. Think of envelope stuffers, going directly from the wholesaler to the contractor or from the contractor to their customer, instant communication with a call to action. We are very excited about this product and have a handful of distributors and contractors ready to start using this service.
We are also working on a shopping cart, NEP Pro, which will standardize the web order entry portal for wholesalers. This will be fully powered by the cloud and will create a standard for contractor shopping via their supplier. After speaking with many distributors, the percentage of business through their portal versus their counters was like day and night. NEP Pro will fix that by having a password-protected site that looks the same no matter which wholesaler they are buying from.
DC: That’s interesting, because a lot of people assume you’re competing with wholesalers.
ZH: The word competition is sometimes taken out of context. Wholesalers are competing with one another in their respective local markets, yet they are part of the same buying groups. We’re approaching this ecosystem from an empowerment angle. NEP is doing something different and it will take time for the market to see that, and we are OK with that.
DC: Tell us a little about TextifyPro. Where do you see the value proposition; is it with distributors, contractors or both?
ZH: Textify Pro is for both contractors and wholesalers. The staggering statistic is that only 23 percent of emails are opened, whereas 98 percent of text messages are read within 45 seconds. Everything from distributors’ branch specials, product training, and flash sales will now be communicated directly to the techs. From the contractor perspective, they are now able to communicate on an even higher personal level with their customers about tuneups, summer/winter specials, equipment upgrades, and other valuable information.
DC: These are great solutions, but are you still focusing on NEP?
ZH: Absolutely, NEP is now transitioning to a distributor marketplace. It will become a viable vehicle where wholesalers can plug in and have an online presence. Our data continue to indicate that our market is on the rise and it’s accelerating. I feel it’s important to share this with the market rather than having a conglomerate step in to solely increase their bottom line. I respect the market, the channels, and the interests, and that’s important to my whole team.
DC: What is Rocket IAQ? How is it different from NEP? What part of the market is that serving?
ZH: Rocket IAQ is a new e-commerce site that solely focuses on the largest data point from our system, which is the IAQ category. Our customer base has indicated their biggest problems when shopping for filters online is the unknown of when they will be receiving it. When you shop at Rocket IAQ, there are products that will be labeled “Rocket Speed Shipping,” which guarantees your item will be at your doorstep within three business days. We’re following our data and are very excited to really grow our market share in this specific sector of the market.
DC: What are the biggest myth or myths that you still feel exist regarding your presence in the marketplace, and what is your answer when confronted by them?
ZH: The biggest myth I believe when I first started NEP was the ability to pull in customers from the web. I was able to show distributors that the online space is indeed here to stay and growing. At this point, I haven’t confronted any of them —there’s still more work to do.
DC: First to market, as NEP appears to be, is a huge advantage for any businesses. How concerned are you that you’ll turn around and see a competitor on your doorstep?
ZH: There’s always competition, and competition makes us better. We feel we’ve got a head start on this, but we cannot be comfortable. As long as we continue to innovate and have the market as our main priority, we feel that competition will just be playing catch-up.
DC: My understanding is that you are moving your corporate headquarters to New York City. Please explain why.
ZH: As a tech startup, we have to be where there’s institutional capital, so that’s going to be New York City or Silicon Valley. Where there’s capital, there’s talent, and in order to complete our mission, having the right people is key. Our development team is out of New York City, and it just made sense to slowly start shifting toward that area.
NEP Web Services: