How Do I Choose a Distributor for My HVAC Company?
Advice and tips from seasoned HVAC contractors
PRODUCT ON THE SHELF: Product availability and warranty support are important. When contractors need a next-day install, the products need to be on the shelf. When there is a warranty issue, parts need to be on the shelf as well.
Choosing an HVAC distributor to work with is much like finding a business partner. Each tangible and intangible benefit must be investigated and weighed. Like with any relationship though, nothing is perfect and there are often trade-offs to navigate. How do contractors choose a distributor? Here are some topics and answers to consider from contractors and distributors in the HVAC industry.
1. How do they spend contractors' time and money?
Time is money, and how a distributor handles both are important considerations when choosing a distributor.
"Forget that they give you popcorn or hotdogs," said Steve Moon, owner of Moon Services Inc., Elkton, Maryland. "That means they want you happy while you’re waiting.”
He explained that a bad vendor can cost contractors thousands of dollars and warned that a lack of stock and accessory items can have technicians traveling from supply house to supply house, costing both time and money.
TIME AND MONEY COUNT: A bad vendor can cost contractors thousands of dollars, and a lack of stock and accessory items can have technicians traveling from supply house to supply house, costing both time and money.
“Ask about average wait times and watch for their attitude towards customers,” said Moon. “The distributor contractors choose will be their business partner. If they don’t respond well to contractors, how can they respond well to contractor clients?”
Parts availability is another consideration that ties in with time and money. When it comes to OEM parts, Jay Hart, service manager of the Coastal Carolinas Region for Piedmont Service Group in Raleigh, North Carolina, said that the company will often pick the distributor that represents those parts.
“All distributors can get the OEM parts you need, but how many third-party hands will it go through?” he said. “With competition being tough, you have to get the best price you can for those parts. Generic parts needed are determined by the type of customer service; part availability we get from the distributors.”
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As a commercial contractor, Piedmont Service Groups also looks at the distributor’s e-commerce apps, which helps the company quickly know if the parts needed are in stock.
2. How does the distribution company act when everything goes wrong?
Business isn't a perfectly executed display of commerce. Mistakes are made, and how they are handled can make or break a situation for contractors. When choosing a distributor, contractors should keep in mind what the company is willing to do to create a successful situation when everything is going wrong.
"Distributors need to make doing business with them easy," said Jason Stom, CEO of Clear the Air AC, Friendswood, Texas. "The last thing I want to deal with is trying to bridge a distributor’s shortcomings with my customers."
He suggested that any distributor that contractors choose should have easy ordering, accounting, and access to support/training.
"Make sure they can give you the best support and best payment terms too,” said Stom. “Cash is still king.”
A key to problem solving with a distributor partner is building a strong relationship with the territory manager, according to Chris Roth, president and CEO of Climate Control Experts, Las Vegas.
“When a problem arises, which it will, I need to know that they will be there to make it right,” he said. “A good partner will be part of local trade organizations and can help you grow your business. This will pay dividends.”
3. What customer services does the distributor provide beyond products?
According to Paul Sammataro, president of Samm's Heating and Air Conditioning, Plano, Texas, the number one consideration when choosing a distributor has to be customer service.
CUSTOMER SERVICE: Having good customer service is a step in the right direction, but knowledgeable counter staff and kind accountants aren’t the only customer service areas that contractors need to learn about before choosing a distributor.
“Like a restaurant that serves the best steak and wine at a great value, if the service is lacking, it doesn’t matter,” he said. “Good service means the company has what’s needed, when it is needed; it understands your needs to operate most efficiently; and it provides the customer service that values you as a customer. This has to be tops.”
To accomplish this understanding of a distributor, Sammataro suggests that contractors get to know the people they will be working with and then ask for references of long-term and recent customers. If the company doesn’t readily provide the information, he said that looking for local companies and calling them for their experiences is not a bad idea.
“Do your homework,” he said.
Having good customer service is a step in the right direction, but knowledgeable counter staff and kind accountants aren’t the only customer service areas that contractors need to learn about before choosing a distributor. Robert Ring, president and CEO of Meyer Depew Co., Kenilworth, New Jersey, knows from experience that the level of service provided is important as well.
“Do they have a convenient and economical program for after-hours access to parts and equipment,” said Ring. “What administrative tasks will they handle such as warranty processing and registration? Will they work with me to provide innovative solutions to logistics issues, making it easier for me to do business with them?”
He suggests that contractors work with distributors that will partner with them to help make their business better.
“Don’t choose a distributor strictly on price,” cautioned Ring.
Free Professional Advice
Butch Welsch, owner of Welsch Heating & Cooling in St. Louis, said it best when advising contractors about choosing a distributor.
"Seek advice from another contractor or two who has been in the industry for several years to get those contractors’ input on who the good distributors are and which aren’t."
With that in mind, here are 15 tips from contractor peers across the nation to help contractors in their search for a distribution partner.
- With equipment distributors, look at the quality and reputation of the brand, the price, the support, and the service.
- Find a hungry distributor with knowhow.
- Find a vendor that has the bench strength to fulfill the needs of a contractor's company and support the customers.
- Find a distributor that has your back and will work with you to do whatever it takes to make sure the customer is completely satisfied when something goes wrong.
- Look for a distributor that has a reputation for doing what they say, returns calls, and has plenty of inventory.
- Look for the aggressive vendor that wants your business and will bend to make things right when you need to make a customer happy.
- Interview the prospect as if they are your employee or co-worker. Make sure that it’s a good fit, it’s not all about the brand, and it’s about the support you receive after the sale.
- Do they know what they are talking about, and will they stand behind their products? If not, keep looking.
- You want a distributor that, first of all, is willing to partner with you and be available if you need their help. You want someone that genuinely cares that you are successful. Together you both win.
- Make sure you have an established brand that won’t leave the area; that can ruin your reputation, even though it’s not your fault.
- Find a supplier who is fluent in your lingo, then make sure their prices are in line with their competition. Not every price has to be the lowest. A supplier that speaks your language has expertise that will pay you back more than saving a couple pennies.
- Free delivery to job sites can really save time because you won’t have to pick up equipment. If you have jobs every day, there is no time to go to a supply house.
- The brand isn’t the most important aspect of the HVAC sale. Who in your market can deliver the support at a competitive price and work with you to become a better organization than you were before?
- Do they handle the brands and types of items which you are required to use? If they fail there, then no matter how much you like them, you really can’t do business with them.
- It is not always easy to tell from a salesperson, or the building or the warehouse, which distributor really wants to be a partner and will work with you to provide the service you desire (and deserve). Some are just in it for the number of boxes or pieces they can sell.
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