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Omni Cable Breaks the Mold

April 3, 2017
Omni Cable has become an authorized distributor of Square D and Eaton molded-case circuit breakers.

Wire and cable master distributor Omni Cable, headquartered in West Chester, PA, has signed agreements with two of the industry’s largest manufacturers of molded case circuit breakers (MCCBs) making Omni an authorized distributor. Both Eaton Corp., Cleveland, and Schneider Electric, Andover, MA, authorized Omni Cable to sell their MCCBs, a move that positions Omni as an approved source, reducing the market incentives for distributors to buy products from unauthorized resellers.

Setting up Omni Cable as an authorized channel for breakers addresses an age-old conundrum in the electrical market, where distributors occasionally have a legitimate need to supply customers with a brand they’re not authorized to carry. They’ll sometimes solve the problem by purchasing from a competing distributor who is authorized, but that raises its own problems in that it frequently violates the terms of that distributor’s franchise agreement. The other alternative is to buy on the gray market from non-authorized resellers and surplus dealers, a choice that manufacturers say can sometimes introduce questions about authenticity and therefore safety.

The opportunity came as a surprise for Omni Cable, said Greg Donato, COO, in an interview. Schneider Electric approached the company to learn more about its model, “and to verify Omni Cable’s reputation and sales policies. Omni Cable does not interact directly with contractors or end users, and our model supports all electrical distributors, utilizing a national platform built around the needs of both the independent and national distributors.”

In the meantime Omni began having similar conversations with Eaton. “It’s part of a journey we’ve been on for many years,” Matt Cleary, Eaton’s channel V.P., told EW. “In spite of our best efforts to eliminate the supply side of the problem by increasing our inventory and in spite our of moves to enforce distributor agreements, it continued to be a problem. This led us to say, ‘Why couldn’t we find someone who’s already selling to distributors only, someone every distributor is already familiar with and comfortable with, and let them provide product, including to those not authorized for it, where they can buy in a legitimate way, which provides them a path to new legitimate products from an authorized source?’”

A key consideration for Omni Cable was making sure its customers would be comfortable with it expanding into the breaker market. “They were very supportive,” Donato said. “We would never have done this if we felt our core business was in jeopardy.”

Omni Cable will carry more than 1,500 SKUs in MCCBs and related accessories such as lugs and shunt trips. Omni Cable won’t be carrying the full lines of Square D and Eaton molded-case breakers but a sizable subset tailored to the needs of the market. For example, residential breakers such as Square D’s QO line won’t be part of Omni’s offering but it will carry A and B items that are most likely to be needed by distributors for commercial and industrial applications as well as a deep stock of slower moving products.

Pricing was a primary concern in setting up the authorization because one of the biggest complaints about the role of the gray market is the prospect of non-authorized distributors being able to buy below authorized distributors’ costs. “Our pricing structure allows for the authorized side to maintain some advantage,” Donato said, “because they should. They’re the authorized distributor.”

The greater value comes from the reduced risk to the distributor of being able to sell an authentic product traceable back to the manufacturer and covered by factory warranties.

The addition of circuit breakers to Omni Cable’s warehouses was the easy part, Donato said. The company already stocks and sells a small amount of product outside its core wire & cable such as TE Connectivity and Raychem terminations, load break elbows, splices and taps.

The program will begin with a pilot in Connecticut, District of Columbia, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, Vermont and West Virginia.

If the arrangement proves successful in those markets and distributors embrace it, they will look at expanding the program nationwide, Donato said.

Donato also pointed to a side-benefit: the expansion into breakers has moved development of a new e-commerce platform, a project already underway before the breaker opportunity emerged, to the top of the priority list.