Distributors Are the HVAC Industry’s Kingmakers
HVAC wholesalers are much more than middlemen
In HVAC as in politics, there are those who toil in the background more than the foreground. Yet, their presence is ever felt because without them, great things would not happen. Behind every successful HVAC brand is a distribution system. If you’re on the inside of the system, you can win. If you are on the outside, well, it’s harder to win.
Manufacturers that are trying to introduce a new product or gain share for an existing product often lament that getting shelf space in a wholesaler/distributor, whether on the front counter or in the back row in the warehouse, is one of the toughest tasks known to mankind. One may say that attending the annual HARDI convention is a must just to stay in contention, but that cracking the starting lineup is akin to the impossible.
“With the HVACR channel, you see one of the most diverse customer bases and product offerings that creates significant pressure on HVACR distributors to be many things to many people while remaining profitable and sustainable,” said Talbot Gee, CEO, HARDI. “Further, while distributors have often traditionally been viewed as logistics providers and fulfillers of orders, today, distributors are creating and affecting customer demand, expected and able to deliver market share gains, and responsible for accessing new markets as our industry’s product offerings and customer base increase.”
Mike Riley, president of Riley Sales, Philadelphia and surrounding Pennsylvania, replied to a dumb question, “What are we bringing to the party? We are the party,” he said. “I always disliked being called the middleman. If that is what a manufacturer and/or the contractor thinks of a wholesale distributor, then the relationship will always be bad. ‘They’re just the middleman’ shows no respect. Independent distributors deserve and have earned the industry’s respect.
“The party starts at our stores,” continued Riley. “We train both our contractor customers and our team members about vendors’ new products and procedures that can make them more efficient and profitable. Our stores contain the inventory, and we are the bank that helps customers with cash flow to get through their jobs. Successful jobs makes everyone happy, just like a party.”
If you’ve ever met Riley, you know he always has on a party shirt, operates a great business, and serves great customers. They make it work, and they treat every customer with respect — well, except for Patriots fans.
A LOADED QUESTION
Distributors want the respect a behind-the-scenes player deserves, yet wield such powerful control over the success of a product line that some manufacturers pay homage while maneuvering an end run. You have heard this many-times-overused word, yet it may be appropriate — we have a conundrum: What choice do manufacturers have?
I’ve seen the U.S. industry shun ductless mini-split manufacturers and effectively keep them out of the market until they were ready to dip in their own big toes, observed manufacturer’s reps who occupy a product on line cards simply to keep it away from better exposure, and witnessed distributors who’ve kept manufacturers on the outside looking in as they remained loyal to existing suppliers. I rather like the latter better than the two former. Still, how is someone on the outside of the distribution system supposed to crack the starting lineup? I attest, it’s worth the effort, no matter how long it takes to secure the warehouse, staging area, warranty facilitation, resource library, training facility, advisors, bank, business partners, and friends that wholesalers/distributors provide.
Manufacturers: go to the distribution meetings, talk with people, and continue this conversation. Distributors: Open your ears. It’s a tough process out there, but keep on fighting the good fight.
Publication date: 01/07/19