Canadian Electrical Wholesaler

Sept 11, 2019

David GordonBy David Gordon

The rep alignment dilemma… whom to align with to generate sales? End-users? National chains? Independent supportive distributors? Any distributor who will support the manufacturer? The manufacturer? But, the bottom line becomes, what will generate sales to meet manufacturer expectations?

It’s complicated, and channel consolidation and channel diversification will make this more complicated.

The market share conversation

Recently I received a call from a rep asking for some advice. They had satisfactorily represented a manufacturer for over 25 years with never a hint of dissatisfaction. In fact, they had gone through at least three different sales management regime changes. Either the manufacturer was satisfied or complacent.

This rep happens to be in a state that is relatively rural and, in its metropolitan areas is pretty consolidated from a distribution viewpoint. A couple of independents dominate and then there are the chains. There are a few small independents but… did I say that they are small?

And the manufacturer is not the #1 in their category and does not have much share, even nationally, within a number of national chains.

The manufacturer recently conducted a state-by-state market share analysis and projects that, in this state, they have about a 10% share versus their estimate of the overall market.

10% is low, therefore the email/call of “your 30-day countdown has started.”

So, let’s put aside the fact that there wasn’t a meeting and a plan developed to try to improve share. The reality is the share has been about the same for years.

But it brings up some issues that are growing within the industry due to consolidation as well as channel fragmentation / alternative channels that question some industry sacred cows.

When share isn’t available, where can a rep grow?

The questions then become the following:

• In an age of distributor consolidation, if the manufacturer essentially has limited share at a national chain, is this due solely to an agent or is it a joint issue? Some national chains are very structured. If a manufacturer isn’t preferred, trying to get significant business at a local level is a challenge. That’s the distributor’s choice. What is the role an agent plays in supporting a manufacturer in such a chain? What is the manufacturer’s role?

• While calculating share is important as a metric, should the discussion be about TAM (total available market)? In reality, some aspects of the market may not be feasible to obtain, or the manufacturer may not want aspects of the market due to pricing levels or they may not have the appropriate / preferred product offering (or brand).

• In a market with few electrical distributor conversion opportunities, if the rep pursues end-users, where can they place the business? Most buyers already have their preferred distributors and want to place their orders with them. Which begs the question of what is more important… manufacturer brand or preferred distributor? The reality… the customer will decide.

• Nowadays there are multiple channels for electrical material. Products can be purchased via Grainger, MSC, McMaster Carr, Fastenal, plumbing distributors, industrial supply distributors, automation houses, power transmission distributors and more, let alone Amazon Business, Home Depot, online only distributors and distributors outside the market. And yes, there are manufacturers who will take the order direct (sometimes bypassing their reps). While hopefully the manufacturer compensates the rep based upon POS at the postal code level, most manufacturers do not compensate reps for sales to non-electrical distributors. Perhaps the rep could grow the business at the end-user level if they could direct the business to a non-electrical distributor… when they are blocked in placing the business through a local electrical distributor (no supporting distributor for the line). This then begs these questions:

◦ Should reps be compensated for sales to non-electrical distributors?

◦ Should reps, with manufacturer consent, be able to open non-electrical distributors as accounts?

◦ Should reps support a manufacturer’s sales to Grainger, Fastenal, et al (whomever the manufacturer has authorized)?

◦ Or, is the electrical rep committed to supporting electrical distributors, even if the electrical distributor is not committed to supporting all of their lines?

• What is the manufacturer’s responsibility / role in getting “stocked / preferred” within a national chain or a local leading distributor or is the responsibility the rep’s within their territory?

Evolving roles in an evolving market

Lot’s of interesting questions as the market evolves. The role of a rep may change by type of distributor, or perhaps the culture of the distributor. For very disciplined distributors where corporate makes decisions of which lines to support, perhaps the role of the rep is to support the manufacturer initiative with the manufacturer responsible for communicating (selling) their value proposition to corporate management? In other distributors, where local decision-making is more prevalent, perhaps the role of the rep is engagement throughout the distributor’s business … corporate to branch and salespeople?

Or is the role of the rep to focus solely at the “customer/end-user” level to generate demand within the territory for their manufacturer?

As the business changes, it becomes more nuanced. Will we get more similar to the electronic industry where most distributors represent all and the role of the rep is really specification-driven and providing local support?

A challenging dilemma for reps. Align with independent distributors and control your destiny locally? Focus solely on end-users and let them decide whom to buy from? Hope the manufacturer provides clear channel guidance? Seek agreements to sell multiple channels? Should manufacturers compensate based upon the territory or by the channel that sells the product? Does the role of the rep change based upon the culture/type of distributor that they call on… support solely at local level or “top to bottom” engagement?

Thoughts?

David Gordon is President of Channel Marketing Group. Channel Marketing Group develops market share and growth strategies for manufacturers and distributors and develops market research. CMG’s specialty is the electrical industry. He also authors an electrical industry blog, www.electricaltrends.com. He can be reached at 919-488-8635 or This email address is being protected from spambots. You need JavaScript enabled to view it..

 

SchneiderBy Patrick Donovan

The lack of staff or “lights out” nature of many local IT and mobile edge computing (MEC) sites makes operations and maintenance a challenge. This struggle worsens as the number of sites increase. How do you maintain IT resiliency in a cost-effective way under these conditions? It is not practical to staff each location with trained personnel. The answer lies, in large part, on data centre infrastructure management (DCIM) software. In this paper we describe essential DCIM functions for small, unmanned edge computing sites and attributes of next-generation DCIM solutions best optimized for that type of environment. 

Read More

 

Rick McCartenBy Rick McCarten

Two articles on branding recently caught my attention.

The first was on electric vehicles. Ford Motor Company felt that, as all cars move to electric, the number of moving parts and the complexity of production will simplify, which will result in a reduction in brand importance from 30% to 10%. Your decision to purchase will only be influenced by the brand by 1/10. Nine-tenths of your decision will be based on other factors.


Read More

Smart BuildingsIn an era of energy and digital transformation, the economics of building ownership are changing. According to a new white paper from the global Energy practice of Navigant, a Guidehouse company, energy, technology and service providers must innovate in the buildings sector or risk major disruption to their businesses.

Worldwide, an estimated 24 billion square feet of new commercial buildings is constructed annually — the equivalent of about 9,000 new Empire State Buildings. The new Navigant white paper concludes that while building owners have been deploying intelligent buildings solutions that rely on data for automation and control for decades...

Read More

 

Changing Scene

  • Prev
Founded in 1906 by François-Xavier Guillevin in Old Montreal, Guillevin International Co. has ...
Prior to joining ABB in 2017 as Executive Vice President of the Electrification business, Deschenes ...
Affiliated Distributors' (AD) Electrical Business Unit hosted its U.S., Canada and Mexico members, ...
AD reported a 13% increase in member sales across its 12 divisions, totaling $35 billion in the ...
Anixter International has entered into a definitive agreement with an affiliate of Clayton, ...
  It is with a heavy heart that Stelpro has announced the passing of Mr. John Chabot, ...
  OmniCable would like to thank the electrical distributors and industry partners who ...
WESCO has announced the appointment of Nelson Squires as its Senior Vice President and Chief ...
A Friday night, the end of summer, the weather is mild, and 2,500 people — customers, suppliers, ...
Sonepar Canada has announced the launch of new mobile applications for Gescan Vallen, Sesco and ...

OmronOmron recently announced that Christa Bankay has joined the company's leadership team as Regional Marketing Manager, Canada.

Christa will be responsible for establishing and executing marketing strategies and tactics in support of Omron’s commercial team. In addition, she will help brand development and messaging for Canada consistent with Omron Automation Americas marketing & digital strategy.

 

 

 

Read More

 

 

GreenleeEmerson announced the addition of a handheld puller to its Greenlee pulling lineup – the new G1 Versi-Tugger. The versatile and portable G1 is designed for pulls normally done by hand and can pull up to 68-percent faster when compared to manual pulling.

“We engineered and built G1 based on honest feedback from professionals,” said Adele Hendrix, product manager for Greenlee, Emerson. “We learned being fast wasn’t only about pull speed. From setup and pulling to unspooling the line after – the entire process should be quicker than pulling by hand. Our design delivers that speed.”

 

Read More

 

Ilsco and Adanac SalesILSCO Canada has announced the appointment of Adanac Sales as agency of representation for the ILSCO brand in the province of British Columbia.

This partnership exemplifies ILSCO’s dedication to collaborate with companies that share ILSCO’s commitment to providing excellent products and service to the electrical industry in British Columbia.

 

 

 

Read More

 

 

Peers & Profiles

  • Prev
Jon Llewellyn is the Branch Manager City Electric Supply’s Nanaimo, BC location. “I've worn many ...
Stephanie Medeiros leads ABB Canada’s Electric Vehicle Charging Infrastructure team, as well as ...
Earlier this month Canadian Electrical Wholesaler had the pleasure of tabling a few questions to ...
Canadian Electrical Wholesaler was able to catch up with Sonepar Canada’s Stacey Corley, which was ...
OmniCable was founded in 1977 by partners with deep experience in the US electrical marketplace. ...
On a regular basis, our publications profile members of our industry through their responses to a ...
First and foremost, sitting down with Susan Uthayakumar feels more like sitting down and conversing ...
Sales of electrical supplies from full-line electrical distributors capture the geographic ...
Laura Dempsey has been working as an outside sales representative for E.B. Horsman & Son for ...
Michael Gentile, President and CEO of Philips Lighting Canada, has had a long and distinguished ...

Alex CouckuytBy Blake Marchand

Alexander Couckuyt, Director of Operations for Southwire Canada, spent the majority of his formative years in Belgium where he undertook his schooling in Business Marketing and Sales before entering an Electrician Apprenticeship program, and working as a licenced electrician as well as an independent contractor for three years.

His work as a contractor would eventually lead him to his current position. Working with suppliers as an electrician, Alex was presented with an opportunity to work for CEBEO, one of Sonepar’s operating companies.

Read More

 

Looking Back

  • Prev
The best memory I keep from CEDA is the way that they accepted me when I came into the business. ...
In the 1930s to 1940s, CEDA’s Western Canada membership was very stable with old line independent ...
Prior to the late 1950s there was little if any involvement in CEDA by the so-called “national ...
  As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of ...

Copper $US Dollar price per pound

Kerrwil Publications

538 Elizabeth Street, Midland,Ontario, Canada L4R2A3 +1 705 527 7666
©2019 All rights reserved

Use of this Site constitutes acceptance of our Privacy Policy (effective 1.1.2016)
The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Kerrwil