When OmniCable first started selling Eaton and Square D circuit breakers to electrical distributors two years ago, it focused on two foundational service mantras that supported its growth as a master distributor of specialty wire and cable products over the past 42 years — commit to a distributor-only sales strategy and eliminate pain points for distributors and manufacturers.
These two business basics have served the employee-owned company well in the wire and cable market since the West Chester, PA-based company was founded by Jeff Siegfried in 1977. Greg Donato, the company’s COO, says these strategies will support its efforts as a national redistributor of Eaton, Square D and now Siemens circuit breakers.
OmniCable’s move into circuit breakers started out through discussions with Square D (Schneider Electric) based on feedback that Square D received from its distributor advisory council. Square D distributors were looking for an authorized source of off-brand circuit breakers.
“Square D was trying to address an issue the channel had,” says Donato. “They reached out to us. We explained our model and concept of redistribution. Shortly after we talked with Square D, we approached Eaton to learn about their challenges. We then started to understand the pain points and thought our redistribution model could help. We built a business adding value to one of the hardest products to handle — specialty wire & cable. Our operational procedures and processes are a great fit for our circuit breaker program.”
Greg Donato, OmniCable COO (left) and Chris Kennedy, the company’s director of product development, say the company’s distribution centers across the U.S. now stock residential and molded-case circuit breakers from Eaton, Square D and Siemens.
Chris Kennedy, OmniCable’s director of product development, said the company initially stocked thousands of SKUs (stock-keeping units) during a pilot program in 14 Northeastern and Mid-Atlantic states. The company now sells Square D, Eaton and Siemens residential and molded case circuit breakers nationally. Kennedy said that with the addition of the Siemens line OmniCable is continuing to invest in their nationally stocked circuit breaker inventory.
Douglas Carolan, market development manager - Circuit Protection, says one of the biggest advantages OmniCable has over unauthorized companies in the gray market selling circuit breakers is that they have access to not only their own inventory in distribution centers across the United States, but manufacturers’ direct inventory as well. Recently retired from Eaton Corp. after several decades in senior-level executive posts managing the company’s circuit breaker and distribution products businesses, Carolan says a related additional advantage is OmniCable’s access to the circuit breaker manufacturers’ supported warranty and technical expertise. “We have access to their technical resources,” he says. “The gray market does not have access to manufacturers for technical questions or factory warranties.”
OmniCable only sells new factory products and does not handle refurbished or reconditioned products. Carolan says the company agrees with the position held by the National Electrical Manufacturers Association (NEMA) in Rosslyn, VA. “The option of reconditioning existing equipment (instead of purchasing new equipment) exists today,” he says. “Proper electrical equipment reconditioning provides a means to extend the life of electrical products as well as an opportunity in some cases to update installed equipment with the latest performance and safety features.
“However, not all components of the electrical infrastructure are candidates for reconditioning. As guidance, NEMA Appendix B provides a list of electrical products and components considered by NEMA suitable for reconditioning, and Appendix A provides a list of electrical products considered not suitable for reconditioning. Molded Case Circuit Breakers (MCCB) are listed in Appendix A.”
Donato says OmniCable strives to draw a clear distinction between its approach to the sale of circuit breakers and the approach of the estimated 180 identified gray market sources. “Our goal is to focus on the traceability, authenticity and factory warranty that only comes from an authorized source. That’s the one thing that there is a lot of confusion about in the market when it comes to these gray market suppliers. None of the gray market sources are authorized to sell. We are trying to create awareness by telling the story over and over again.”
He adds that one thing OmniCable does that no other master distributor, redistributor or gray market distributor will do is log the serial number and date code of every MCCB into its computer system as part of our quality assurance process. “If you buy any molded case circuit breaker from us, we are going to know the serial number and ‘born-on’ date for that breaker,” he explains. “If someone tries to return a different breaker to us that was used in the field and potentially refurbished, we will be able to track that down. We focus on the traceability, authenticity and factory warranty that only comes from an authorized source. We believe a strong awareness campaign driven by the manufacturers, distributors and OmniCable will help to educate and slow down unauthorized and unsafe sourcing practices.”
The OmniCable press release announcing the national rollout said in part, “The agreements with Eaton, Schneider Electric and now Siemens positions OmniCable as an authorized source for electrical distributors to purchase genuine Eaton, Square D and Siemens circuit breakers, reducing the chance of distributors seeking products from unauthorized sources… OmniCable can now provide electrical distributors across the country with safe, reliable and traceable factory-direct circuit breakers from competing manufacturers.”
Traceability is a critical issue with the major circuit breaker manufacturers in their efforts to eliminate counterfeit or improperly reconditioned products, and today they all mark new breakers in some manner, including etching serial numbers into the circuit breakers or various package labeling methods.
Donato says a key focus of the OmniCable circuit breaker program is making sure customers understand that they only sell the products to distributors who are already authorized by one of the major circuit breaker manufacturers and that they will never sell to end users.
In addition to selling wire and cable and now circuit breakers to full-line electrical distributors, the company redistributes TE Energy’s Raychem splice and termination products and T&B’s legacy connector products. “In 2012, we started to diversify our business,” says Donato. “Our people have become very skilled at selling splice and termination kits and fittings. Because of this success, we knew OmniCable could handle this circuit breaker program and we remain confident in our ability to diversify our product offering.”
OmniCable may eventually stock additional products as a master distributor. However, Donato says the products would only fit if OmniCable could eliminate some sort of pain point for the electrical distributor or electrical manufacturer. “Eighty-five percent of the industry’s product needs are not wire and cable,” he says. “When looking for additional products to diversify around, we focus not only on our traditional wire & cable products, but also include the other 85%.
“But we want to add value, not just put products in a huge master distribution center the distributor is already stocking and supporting. We built a sound business that supports the channel with products they need us to support them on. By sticking to these core beliefs and best practices we feel strongly the breaker initiative will be a success for our industry.”
Sidebar: Manufacturers Speak Out on Unauthorized Circuit Breaker Sales
EW asked the three manufacturers selling their circuit breakers through OmniCable about the challenges they face with the unauthorized sale of circuit breakers in the gray market. All of the companies said OmniCable plays a key role in combating this problem by acting as national source for new, factory authorized circuit breakers because of its broad reach and the reputation it built over the past 42 years with its distributor customers as a dependable source of supply.
EW: Unauthorized sales of circuit breakers have been going on for quite some time. Has the practice gotten worse in recent years? If so, how?
Paul Connors, product line manager, molded case circuit breakers, Eaton Corp.: Yes. As more people begin their buying journey online, it can become increasingly difficult to distinguish unauthorized resellers in a digital marketplace. These unauthorized or “gray market” resellers go to great lengths to feign their legitimacy despite having no commercial relationship directly with original equipment manufacturers. Without awareness of the dangers that inauthentic product poses to the market, buyers may be enticed by the lure of quick ship and low price. As the old adage goes, if a deal looks too good to be true, it probably is.
Jon Duffie, director of channel marketing, Siemens: The problem has gotten worse as new threats enter the market, and with the use of the internet as a primary sales tool. In past years the broker market was dominated by a handful of large players. Recently there has been wide proliferation of smaller unauthorized sources.
Square D: The biggest change that has made it worse is the growth of the internet and the marketplaces on the internet that make all products, not just circuit breakers, available globally. Now it’s easy to place an order on an internet marketplace for any quantity desired and have it quickly shipped to you, even if the product is located on the other side of the world; many times with free shipping.
EW: What type of new tools do circuit breaker manufacturers have to police this problem?
Paul Connors - Eaton Corp: In addition to an authorized distributor locator tool, Eaton publishes a list of known unauthorized resellers in order to unequivocally confirm that no commercial relationship exists with the manufacturer. Additionally, Eaton has a Circuit Breaker Authentication Tool to help its customers verify the authenticity of their Eaton circuit breaker.
Also, with its new line of Power Defense molded case circuit breakers, Eaton has done away with adhesive product labels in favor of laser etching, which cannot be tampered with to misrepresent the product, a practice that is prevalent in the gray market.
Jon Duffie – Siemens: Manufacturers have begun to utilize advanced manufacturing technologies, in addition to tracking methodologies, to help identify and root out the players in this dangerous and illegal industry wide problem.
Square D: As of today, we put a QR code on our breakers that can give you all of the necessary information and help track whether the breaker is counterfeit.
EW: There have been some interesting developments with circuit breakers (smart breakers with enhanced communications & control capabilities, etc.). Do you think the unauthorized sale of circuit breakers will be an issue with these new devices?
Paul Connors - Eaton Corp: Generally speaking, the more specialized and sophisticated a product is, the less likely it will be commoditized. Higher feature set circuit breakers are often accompanied by a consultative selling process or may require technical expertise, which is more likely to lead a buyer to an authorized channel partner that has tools, resources and training on the product. With that said, this technology is not implicitly a barrier to the gray market resellers, and buyers should always take caution to ensure they are getting authentic product.
Jon Duffie – Siemens: There is no UL process for re-certification of circuit breakers by a third party. As technology evolves, these changes will contribute more to an unsafe condition when prior-use product is sold into the market.
Square D: The best example we have today is for our MASTERPACT MTZ. The options required have to be digitally purchased, and you can’t install modules from one breaker to another one. As breaker technology advances, the ability to guard against unauthorized reselling will advance as well.