EDITOR’S NOTE:Larry Taylor, current president of Air Conditioning Contractors of America (ACCA), sent the following article toThe News. The article is straight out of the November 1926 bulletin (Volume 3, No. 11) of the National Warm Air Heating and Ventilating Association (NWAHVA), which later became ACCA. As Taylor noted to The News, “While certainly technological, scientific, and mechanical changes have been made for the better over the last three quarters of a century, our archives show that many business aspects of the hvacr industry haven’t changed that much. The November 1926 NWHAHVA monthly bulletin ran an article titled, ‘The Furnace Installer: A Frank Talk on Competition.’ By changing just a few references, this article could be about today’s hvac contractors battling for fair competition with utilities, coming to terms with manufacturers, or putting together a solid business plan to ensure success.”

There come into [NWAHVA] headquarters many letters from furnace dealers. Some of these are filled with encouragement and enthusiasm. They come from men who have found the furnace industry a profitable line of work and who are building for themselves prosperous and permanent businesses.

There is another group. These come from men who find difficulty in making both ends meet so that there is enough in between for a decent living surplus. These dealers make certain comments regarding the furnace business, some of which are so frequent that they deserve attention.

Probably the most common one is that of unfair competition. Some dealers have difficulty in meeting the competition set up by those who sell cheap goods and who sell to a cheap market on almost any price they can get. Others have been frightened by the threat of direct from the manufacturer selling. Each class makes suggestions for general improvement and hopes that his individual problem can be solved by some sort of legislation or trade regulation. Somehow they seem to feel that their worries and troubles are peculiar to their respective towns or to their own individual businesses.

As a matter of fact, selling goods in this enlightened year of 1926 is basically the same whether the commodity be shoes, automobiles, fur coats, or furnaces. The differences are merely those of detail. Goods must be made and they must be sold and there are certain accepted ways which have been proven most successful in both manufacture and selling. But the whole procedure, from beginning to end, is one of competition. If a manufacturer does not make as good a furnace as his competitor, the market will not want it. And if the dealer has not the selling ability of his competitor, he will lose out in the race.

Now apply this to local conditions. A is a manufacturer working hard to produce the best furnace he knows how to make. He must sell the product of his foundry or go out of business. He makes an arrangement with B to handle his line. If B cannot dispose of it he has two alternatives; one is to find someone who can and the other is to sell direct. A cannot tolerate bad business methods or indifferent selling on the part of B; that would be as fatal as to employ a foundry superintendent who was not on the job.

See how this situation works out in certain towns. Here is one — an actual case — in which two dealers have for years been installing about 30 furnaces each and every year. Along comes a manufacturer selling direct and in the second year of operation puts in 80 furnaces in that town. Those two dealers have been frightened white. They both are sure that the furnace business has gone to pot and that they are the victims of unfair competition.

Now here is another town of about the same size. In it is a dealer who applies modern methods of merchandising. A direct selling manufacturer entered that town, with the same methods that frightened the other two dealers and, in two years, was forced to close the branch. The original dealer had made it impossible to operate the branch at a profit. There is no furnace manufacturer in existence today who can take business away from that dealer by any methods of direct selling or otherwise. And there is no cheap competitor who can do him a bit of harm. He has entrenched himself so thoroughly in his own community by methods of good business, good workmanship and intelligent service that his customers cannot be won over by any argument or inducements. His name in that town stands for the last word in heating.

The difference between this man and the other two is the secret of the whole problem. It is simply a manifestation of the law of the survival of the fittest which, in the last analysis, all business is. The last man is just as competent from a business point of view as any competitor that can come into his field and thus he holds his own. The other two are slipping. Whether they like it or not they will be forced out in the pressure of modern merchandising unless they revise their policies and learn how to be better merchants than the other fellow.

Thus it is, when all is said and done, that the differences in records of one shop or another are not those of competitors and trade conditions, with rare exceptions, but, rather, those in the efficiency with which existing conditions are met. If a dealer really sells his goods — not just takes phone orders; if he sells goods of quality, installs them according to the Standard Code, gets a good price for them and then stands back of them with honest service, he need fear no competition for there is always a ready market for that kind of merchandising in any community.

Publication date: 04/30/2001