Because my picture appears at the top of the page, there’s probably no harm in telling a story that lets you know how old I am.
For the first 10 years of my life, my mom and dad bought all our family’s groceries at a tiny store in a near western suburb of Chicago, from a couple named Tom and Louise. It’s hard to believe today that we bought all our meat, fresh fruit and vegetables, milk, bread and other grocery items from a place that’s half the size of a modern convenience store, but I guess Tom and Louise were great at inventory control.
Well, sometime in the early 1950s, an A&P supermarket opened up a couple of blocks away. Soon Tom & Louise decided they couldn’t compete, so they sold their building (it’s an apartment today) and opened a dry-cleaning place several blocks away. In fact, during the period between 1950 and 1960, tens of thousands of “mom & pop” grocery stores went out of business - but there was no reason for it.
Large corporations made a killing by opening up tens of thousands of little convenience stores in the same neighborhoods to fill the vacuum that was left. All they did was stock fewer but faster moving items, such as bread, chips, soft drinks, beer, milk and cigarettes, and raise the prices.
So, what was the problem with all the little stores that couldn’t compete? They didn’t recognize who they had become. They were trying to be supermarkets in convenience store buildings and with a convenience store staff. They could have become convenience stores.
Or they could have become a specialty store (there are lots of them today). They could have just sold specialty coffee, or many types of beer, or ethnic food, or cheese, or ice cream, or candies, or fresh fruit and vegetables. Or they could have become a discount shop selling day-old bread, or cigarettes, or shipping-damaged goods.
When you run a specialty or discount store, people will travel some distance to come and buy from you. However, Tom & Louise didn’t understand this back then. They just knew that they couldn’t compete with the A&P.
So, what does all this have to do with HVAC/R (or plumbing) wholesaling? I happened to be visiting a small HVAC/R supply house one day and noticed that despite the small size of their building, they were trying to be a supermarket. In fact, they had a full line of residential HVAC equipment in the back. It took a half-hour for a clerk to get to this equipment because everything was stacked in a heap and it had to be sorted out to reach anything that wasn’t damaged.
This was part of a major national company’s distribution network. It appears as though many companies in our industry (even large ones) haven’t figured out the problem that Tom & Louise ran into. They don’t seem to know who they are yet. Either that, or they haven’t learned how to make the best use of their smaller stores.
So, what are you? Is your company a supermarket that has everything in stock at discount prices with minimal staff? Or are you located in a great area, but with a smaller store, making you a convenience store where you only sell faster moving items? Or are you a specialty shop that just sells controls, or HVAC equipment, or refrigeration equipment and/or parts? Or are you a discount shop that has great prices on equipment, or overstocked parts, or refrigerant, or whatever?
Let me add one more group to that. Several years ago, I was visiting a major supply house in Philadelphia (Riley Sales). I was walking along with one of their contractor customers, and I happened to ask, “What type of company is this?”
The contractor replied, “They’re the most expensive in the city - but my people only have to make one stop here, because if I need it, they have it.” Oh! Hats off to Riley Sales!
The point is that you have to recognize who you are to succeed in this (or in any other) business. And you have to design your business around who and what you are, and by the size of your stores and warehouses. Don’t try to be everything to everybody. Make your business stand out as unique in your market, and by so doing, don’t be just another pretty face on the block. Make your customers come searching for you!