Supply House Vs. Big Box -- From The Contractor's Point Of View
In the early '90s, I was both a PHC contractor and co-owner of a radiant heating manufacturing company. This gave me a keen view of how the manufacturer, the rep, the supply house and the contractor all fit in supplying and delivering product and service to the end customer.
Today, I have successfully sold my PHC business and the radiant heating manufacturing business to devote time and energy to training and consulting for the PHC and home service industry.
While consulting with contractors, they tell me that many problems that existed when I was in both businesses still exist. What they mostly hate is the attitude by some manufacturers, reps and supply houses towards them, the contractor. The main object of their anger is the last guy in the chain, their supplier: the supply house.
What I knew to be true back then was the routine closing of the doors between 12 and 1 p.m. for lunch. This was the first time all day we'd have to stop and get materials. Should we arrive at 11:55 a.m., we'd get a steely-eyed gaze from the surly counterperson who saw us as the villain standing between him and his lunch break.
Then this race to the supply house would start again around 4:30 p.m. We'd begin scurrying around trying to figure out what we needed to finish the work. We would call in our material list and ask if the items were definitely in stock. We got the mandatory answer, "Sure, come on in." Leaving the job as the daylight hours were dwindling, we'd rush to the supply house to beat the 5 p.m. closing of the doors for the day.
With our hearts racing from anxiety, we would find that the material was not in stock as promised. This left us to scramble to find a way to finish the work we had assured our customer would be done. They hated us for any delays and inconvenience. By not checking your stock, you at the supply house took away our chances of finding what we needed elsewhere because everyone else also closed at 5 p.m.
As the weather would get colder or hotter, we'd get loaded with requests for work proposals. That's when we most needed help from our supply house. Our requests for timely help with material pricing or technical advice would go ignored.
So we learned from experience that it would be hard to do business with you, the supply house. Because you weren't providing the service we desired, you taught us that what you offered was a commodity. We were free to look elsewhere, but before the entry of the big-box stores, there were few options.
When the big-box stores arrived, they exploited a marketplace that had been rife with abuse. Many of the worst supply house offenders went out of business as we, the contractors, exercised our options to buy elsewhere.
The home center stores were open longer hours and in convenient locations to our job sites; they didn't shut down for lunch breaks or close at 5 p.m. when we were racing to finish the work we had promised. The staff was courteous, knowledgeable, even friendly. The prices were right and they had the stock we needed.
The smart supply houses made a decision that saved their businesses. They chose to become partners with us, the contractor, by doing the following:
- They provided products that were not readily available to our customers at the home centers.
- They provided technical training and business classes in our office.
- They happily took our phone calls and pleas for help when it came time to bid jobs, especially when it got busy.
We came to see them as our competitive advantage over our competitors who didn't understand the value they were providing. The smart supply houses understood that price is important but not the only important thing. We wanted service along with a good price.
Here are five questions you might want to ask yourself about how you're serving the contractor:
1. What am I doing to become partners with my customers and to make it easier for them to do business with me?
2. What am I doing that makes me special to them and why should they care about it?
3. What technical and business educational programs am I supplying to the contractor - since building successful contractors is in my best interest?
4. Have I been attending the industry trade shows focused on finding unique products that solve problems, and/or creating a niche for me and my customers?
5. Have I been supportive of the industry trade groups that promote success and help raise standards for the whole industry that I sell to?
Here are seven suggestions:
1. Arrange your work schedules to provide longer hours at the beginning of the day, at lunch time and most importantly at the end of the day.
2. Put the systems in place that keep better track of your "real" inventory. This means frequent physical counts of inventory to assure the contractor the best chance he'll get what he came for.
3. Stock even the slow-moving material. Yes, I know you have to balance proper stocking with over-stocking. But you need to have it all, including the slow movers. Just keep a tighter leash on them.
4. Communicate with the contractor early on when you are unable to deliver what you've promised and then tell him what you're doing to make it right.
5. Keep contractors informed when there is a developing problem with a product. They know when you have piles of product sitting on the dock awaiting return. If you don't tell them, they're going to be angry with you, not just the manufacturer.
6. Keep your own technical and business training up-to-date. Learn how to figure jobs correctly so you can help contractors. More times than not, they're going to support those who support them.
7. Partner with the manufacturers to hold ongoing training for both technical and business subjects.
Be proactive and reach out as a partner. You'll find a welcome response from the contractors you really want as customers. The smart contractor will understand the value you bring once you have put it in place and delivered on the promise each and every time.
As an industry consultant and trainer, I still look to create opportunities for partnering because it creates a win for everyone involved in the process. It has helped me grow my business.