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How to Build the Perfect Distributor

July 1, 2010
Do some “imagineering” and construct a bionic distributor with the qualities you admire most from the masters of the distribution universe.

While writing this month's cover story on the changing channels of distribution, which teaches electrical distributors, electrical manufacturers and independent manufacturers' reps how they can adapt EW's popular Electrical Pyramid to their own market areas, I got to thinking about the tough competition full-line electrical distributors are up against these days.

Think about all the different specialty distributors out there with more technical expertise in their product areas than any other distributors on the planet. Or competitors in the industrial MRO and facility maintenance markets like W.W. Grainger Inc., Lake Forest, Ill., and Fastenal Inc., Winona, Wis., with the business smarts to know where they will be tough to beat and the financial clout to bolster these strongholds with acquisitions, branch expansion and select investments in internal operations.

Then there are energy-service companies (ESCOs), which know how to use dollars-and-cents payback analyses to convince CFOs and bean counters that retrofits of their facilities with more efficient lighting, HVAC, roofing, windows and other green building products make business sense. They also back up this sales pitch with a one-stop solution for these retrofit jobs that includes design, supply, installation, financing and post-sale maintenance and testing.

I could go on and on. But imagine if you could somehow take the best practices of the masters of the distribution universe and combine them into a new distributorship. It's not a bad exercise to go through with your management team. Imagine if you could build a company that had an online store as good as Grainger, the entrepreneurial spirit of Winlectric, Dayton, Ohio, where all local branch managers own a piece of the action, or the blueprint (and capital) for branch expansion of Fastenal, which has opened 749 new locations since 2004. Then mix in the in-house training and counter area merchandising of the old Branch Electric Supply, and the green marketing savvy of O.K. Electric Supply/Facility Solutions Group, Perth Amboy, N.J. That would be some company!

To “localize” this concept, what if you could build a bionic distributor with the qualities you really admire — or fear — from competitors? Think about what your competitors do best and ask your management team questions like:

  • Which distributor's sales force is the best in the business?

  • Who has the best reputation for making on-time deliveries?

  • Who stocks the most inventory?

  • Who has the best product lines?

  • When it comes to opening branches, who stands out?

  • Does any distributor impress you with their marketing campaigns?

Answer each of these questions and have your management team voice their opinions on what it would take for your company to close the gap in each of these areas. Your company probably can't be the best in each of these areas. But if you use EW's Electrical Pyramid to help identify and analyze the competition in your local market and then take a good hard look at how your company stacks up against competitors in all of the these areas, you will hone your competitive edge.

EW Wins ASBPE Awards

EW is in the winner's circle again at the American Society of Business Press Editors (ASBPE) annual awards competition and has won a national award and two regional awards.

The magazine's staff won a National ASBPE Award in the “How-To Article” category for the Feb. 2009 article, “The Green Scene: 25 Ideas that Can Help You Sell More Energy-Efficient Electrical Products”; a Western Region Award in the “Editor's Letter” category for the monthly “Times and Trends” editorial; and a Western Region Award in the “Editorial Special Section” category for “Technology: The Power and the Puzzles.” We will find out next month if the editorial staff won gold, silver or bronze.