Many years ago, suppliers, manufacturers and wholesale/distributors felt the fastest and easiest way to move product was to pull it through a market. Why? It’s simple: supply exceeded demand and producers needed to make sure their products were sold. The market was supplied by more than 100 brand names, all made by individual manufacturers. Today we have dozens of brand names produced and sold by just a few corporations. The change occurred in the supply chain but did not really change the way we sell at the consumer end of the pipeline.
Years ago, we had dealers who could send a price quote out to a buyer and call on the phone to see when they wanted it installed. The contractor often had a waiting list of prospects. This same contractor sold one or possibly two equipment brands, but the prime line was supposed to be a brand the consumer knew. This arrangement meant manufacturers had to spend big bucks to make their lines familiar to consumers. Because of this tie in, contractors became soft in their selling approach and leaned heavily on brand names. Consumers would often look in the yellow pages for a “Dealer” to install a brand name. Rather than lose a job, often a contractor would sell the customer their second line of equipment. When this began to happen, price became the big problem it is today.
Coming up shortWhen you are unable to sell yourself and your company at a price above the market, you find yourself short on the bottom line. The independent contractor’s profit over the years has been eroded and needs to be restored to the level of being an equal partner in the supply pipeline. This will happen when contractors identify themselves less with a product brand and more with the one brand name no one can take away from you: your company. Shed the clocks, coats, hats and other stuff with a manufacturer’s logo on it and develop your own identity. You are and always have been an independent comfort specialist.
Contractors need to think about how they are perceived in the market. “Why am I not able to receive the proper compensation for the quality work I do? Do I still do quality work or have I reduced my workmanship to match market prices? Do I have the reputation I want in my market or do I want to change it? Do I get a lot of referral work? Am I able to maintain a slightly higher price than the going rate? Do I get 5% to 8% higher than the going market price? Why not? Am I making the bottom line products I should for the products I sell?”
If you have no problems or answered positively on all the above, you know what you are doing is right. Keep it up. For those of you who want to improve your bottom line, think about this: Are you one of the manufacturer’s dealers or are you an independent contractor, selling your brand? Think about it and make some very hard decisions that will allow you to prosper in the future regardless of what happens in the supply pipeline.
Your independence can secure your company a future in this industry. Your ability to deliver this message to your prospects will assure them of the quality comfort only you, the contractor, can deliver.