Distributors Discuss Their Roles With HVAC Contractors
A current look at business partnerships in the HVAC marketplace
The partnership forged between contractors and distributors is one that is ever-evolving. It is easy to look at choosing a distributor from the contractor side of the coin, but contractors might also consider the flip side from distributors’ points of view.
Distributors are Setting Themselves Apart
Distributors are working to set themselves apart in a competitive marketplace. Sometimes that is done with products and services, and other times that is done with price. For Habegger Corp. in Cincinnati, Ohio, setting themselves apart is based in a strong history of people.
“Our legacy, our people, and our brands are what set us apart,” said Brian Newport, corporate director of residential sales, Habegger Corp. “We feel that we have the best people, we represent the best brands, and we've been around since 1952, with the same brands.”
HOW THEY STACK UP: Distributors are working to set themselves apart in a competitive marketplace. Sometimes that is done with products and services and other times that is done with price. How does your current distributor stack up?
That last part is what Newport said helps differentiate Habegger from other legacy distributors.
“Many distributors that have been around as long as we have been, have changed major HVAC brands multiple times,” he explained. “This creates channel friction, dealer insecurity, and brand confusion in any market.”
Auer Steel & Heating Supply Co. works to set themselves apart by providing contractors with more than products. Headquartered in Milwaukee, Wisconsin, the distributor supplies an extensive offering of services.
“We are growing these services each day,” said Jon Hirsch, director of Business Development, Auer Steel & Heating Supply Co. “From our extensive and professional in-house marketing services to our recruiting assistance and outreach to technical colleges and high schools, these new value adds make us different than other suppliers in our region.”
Evolving Relationships With Distributors
The change in the HVAC distribution marketplace does not stem strictly from COVID-19, even though that has had an effect on store hours, interactions, and supply lines. Changes have also come from business demands and generational shifts, to name a few.
DEPENDABLE RELATIONSHIP: Distributors should have a contractor’s back through good and bad times. Even when a contractor goes through total destruction of their business.
“The flow of information has changed quite a bit over the last 30 years, technology has made fulfillment and training different, and generational changes have made career choices less favorable to HVAC distribution,” said Richard Cook, president and COO of Johnson Supply. “There are other things that have not changed much, including the importance of trust, of values, and execution. The market is efficient over time, but someone always has to perform the last mile function.”
At Gustave A. Larson Co. in Pewaukee, Wisconsin, the company sees its relationships with contractors improve as it continues to emphasize core values with their customers.
“We capitalize on making it personal by helping them through the pandemic and economy with knowledge and guidance instead of simply selling them stuff,” said Scott K. Larson, president of the company. “Also, we have continued to welcome contractors into our showrooms while maintaining safe distance and following CDC guidelines; for those who want curbside pickup or delivery, we do all of that free of charge.”
Hirsch has seen the distributor contractor relationship change to more of a collaborative and sharing approach. He said the many of the company’s clients lean on them for outside council as a sounding board for the operations of their HVAC businesses.
Some of the newer and younger generation of HVAC contractor owners aren’t driven as much by relationship or legacy, according to Newport.
“It’s all about ‘What have you done for me lately?’” he said. “They also seem to focus on price more than anything, versus having a trusted, reliable partner that will have their back through good and bad times. For the distributors leading with price, it's a great setup. For those that value total package relationships, this is a more challenging relationship.”
Advice From Distributors
HVAC distributors are often some of the best places to go for advice. Be it parts or business know-how, the solution is usually found at their counters. That being said, these distributors have advice for contractors as they consider their current business relationships and for those in the process of choosing another distributor partner.
Ethics, reputation, and a distributor that aligns with a contractor’s values and expectations were a common theme from those distributors who offered insight.
“Pay less attention to the equipment brand than the distributor performance and collaboration,” said Cook. “Contractors select the brand on behalf of the consumer more than 75 percent of the time.”
He further explained that contractors should select the select the reliability of the equipment over the brand.
“Choose a distributor that is flexible and can make decisions quickly,” said Cook. “Pay attention to the internal training and turnover of the distributor.”
Larson agreed that product and price aren’t what help HVAC contractors build successful businesses. He said that contractors should choose a distribution company that will help them succeed.
Hirsch warned that the old model of interaction between contractors and distributors is changing.
“With the advent of technology, contractors and distributors can work more closely together, share more information and rely on each other,” he said. “Find a distributor that you can have a relationship with. Relationships allow you the opportunity to customize how you interact and value time. Today’s most successful contractors and distributors work together to accommodate each other’s needs so they can grow together.”
Newport summed up the advice with this thought: “Look for the entire package. It's not all about price; rather, it’s the relationship, pricing, support, training, business growth assistance, reliable products/brands, and much more.”
For more advice from the contractor’s perspective, see the article “How Do I … Choose a Distributor for My HVAC Company.”