Redefining distribution for todays contractors

A working relationship with a good distributor can help contractors and installers grow their business.

Mar 1st, 1999

A working relationship with a good distributor can help contractors and installers grow their business.

Steve Bickford

The most common misconception is that product price should be the only factor when purchasing structured cabling. While low price is certainly important, it is not necessarily the most important consideration. That old cliché, "Time is money," is especially true for contractors and installers. Poor service costs contractors money; good service saves them money. After all, a low price is meaningless if the product is not available.

When choosing a distributor, contractors should look for companies that can do more than simply supply product. It`s the service and reliability offered by the best distributors that create an ongoing and profitable business relationship with the contractor. Before choosing a distributor, carefully consider your business needs and opportunities. Many of today`s distributors are not just intermediaries between manufacturers and contractors; they can be crucial to the success of your business.

Distributors offer several levels of service, including basic services, value-added services, and informal partnerships and lead generation.

Basic services

Making up the backbone of the distribution business are the basic services with which most installers and contractors are familiar. Look for a distributor that carries most of the key vendors` product lines, including both fast-moving and hard-to-find items. This distributor should have inventory close enough to your market to provide quick delivery. The de facto reason for a distributor`s existence is the ability to get contractors and installers what they want, when they want it, and at a competitive price. Logistically, it makes little sense for a contractor to carry large inventories. The costs associated with them such as warehousing tie up capital and can make operations prohibitively expensive. It is also unnecessary and impractical for contractors and installers to carry a wide range of inventory from every manufacturer that they may need for all of their jobs.

To help save time and money for their customers, distributors should be willing and able to deliver inventory both to the customer`s job sites and to his warehouse. Lead times depend on the availability and location of stock and complexity of the order. Typically, most orders have a lead time of a few days. But, next-day or even same-day service is sometimes required. Distributors should have an established method of expediting orders based on the contractor`s need. In some instances, this may mean having will-call services, in which the contractor places an order with a sales representative and then goes directly to the warehouse or distribution center to pick it up. Contractors should also look for a distributor that can offer job-site delivery by the next business morning for most in-stock items.

There are many distributors to choose from. Regardless of their size, some distributors offer only basic distribution; others are capable of helping a contractor grow his business, and still others will tailor their services to an installer`s specific needs.

Value-added services

For project work, some distributors can offer services such as custom cut-to-length services, SpeedPulls (multiple cables bundled), custom markings, and other relevant services. These can be especially beneficial because they save the contractor time in the configuration and product-identification process.

Major projects can take weeks, months, or even years to complete. On a complex job, it is impractical for an installer to receive all of the materials for the entire job at once. In such projects, distributors should work closely with contractors by staggering deliveries (using just-in-time service) and billing around project phases. As a result, the entire order can be placed, yet delivery and billing occur for only what is needed at any given time. This type of billing is an essential area in which a distributor can play an important role in the contractor`s ability to complete a long-term project.

One distinct advantage in working with established distributors is that they can extend financial credit. It is a reality of construction that installers work at a much faster pace than they are paid. So contractors should look for--and work with--a distributor that can offer flexible credit terms. Such a distributor will work within a set budget and arrange acceptable payment terms with low interest rates. For contractors, the bottom line for success is to work with a distributor that will help them maintain their business at a profitable level.

Yet another advantage a distributor can offer is technical support. With equipment becoming more complex to understand and install, technical support is not so much an added benefit as a prerequisite when determining whether to work with a distributor. A distributor should offer technical assistance, ranging from minimal to extensive, depending upon contractor needs. Some distributors can help guide contractors to a standards-based solution. Some also have their own registered communications distribution designers or systems engineers to assist installers with designs, recommend product solutions, and troubleshoot problems. In addition, with some job sites active around the clock, some distributors` 24-hour technical help lines provide service whenever it is needed.

All distributors have sales staff to take orders and answer questions. But remember to look beyond this: Ask the distributor if the company has dedicated account management for individual installers. This gives the installer both an inside and outside representative to create efficiency in business and on the job. Dedicated account management can assist the contractor with both pre-sales and post-sales services as well.

Partnerships and leads

Beyond the sales transaction, some contractors and distributors develop synergy that results in transactional cost savings for both parties. The distributor performs services perhaps far removed from simple distribution but of critical importance to the contractor. The contractor, in turn, may pay slightly more for material through this distributor, but that factor becomes relatively insignificant because of the added value the relationship provides. Distributors might help a contractor with customer-specific part numbers, special orders, or automatic reorders upon request. In addition, they can help manage a contractor`s inventory in certain instances.

Part of the partner relationship may include training as a service offering. There are two basic types of training opportunities. In the first case, distributors have both internal technical experts and vendor-specific training to help their contractor partners plan and execute training schedules. In the second case, distributors have their own training centers where contractors can send their employees. Since training is an important factor in implementing products properly, a good suggestion is to see what a distributor offers that works best for the contractor.

An important step in dedicated account management is using a distributor`s sales staff as an extension of a contractor`s own sales force. Distributors track activity throughout a market, and their sales teams should be very active with manufacturers and end-users in learning about future opportunities.

Being an effective link to end-users and manufacturers, a good distributor can also share the latest industry news, new-product information, project leads, product tips, and frequently asked questions. Customers have more confidence in a company that communicates and shares information with its peers and partners.

With many distributors servicing the structured cabling industry, the service offerings are varied enough that contractors should be able to get the services that make the most sense to them. By asking distributors questions and understanding all of their capabilities, contractors and installers can make choices that benefit their business.

Steve Bickford is senior marketing manager, contractors, at Anixter Inc. (Skokie, IL), a global distribution specialist. For more information, browse the company`s Web site at www.anixter.com.

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