Welcome to ElectricalTrends
ElectricalTrends is a communications vehicle offered to the electrical distribution industry by Allen Ray Associates and Channel Marketing Group. The purpose of ElectricalTrends is to share Allen Ray Associates' and Channel Marketing Group's insights on industry trends, observations on industry activities and issues and offer ideas that may benefit industry participants in their endeavor to improve their businesses in the areas of growth and profitability.
Readers should not construe our postings, nor comments from individuals as reasons to purchase / not purchase from a supplier nor as a basis for making an investment decision.
Tuesday, April 21, 2009
Recently we've reached out to a number of people around the industry and thought we'd share some of what we are hearing:
- From a regional at a national chain: "To say that we have had our share of problems is an understatement. The swing in the economy that we started to see as early as Q2-08 has given us real concern from a personnel and profit standpoint. We are under constant directive to lesson inventory. As we reduce our inventory and personnel, we've noticed that our service is starting to slide, but that is the price of trying to have profit. We've lost some of our best people to independents and now have a mandate to try to hire the best salespeople from our competitors, especially if they can bring business, even though personnel reviews continue internally. We're hoping to upgrade our talent base."
- From another national chain: "So far we are able to survive on large commercial projects that had already been secured, industrial MRO, arc flash and re-lamping. Forget residential. We're trying to reach out to new customers and customers that are creditworthy eventhough we've filed liens on some projects. Our outlook has improved over the past four months, the promise of the stimulus is better than what we've been dealing with."
- From a small distributor: "After hearing your presentation on surviving and growing in 2009, I took your advice and "changed my frame of mind". I stopped listening to the 24 hour financial networks and told my employees we would survive. We reviewed customers, order size, stopped extending credit beyond 30 days, went on some sales calls, set two tiers of pricing (one for credit cards and the other for non-credit card users and now are cash flow positive."
- Another distributor: "We reduced inventory that hadn't sold in 13 months and decided to use the rep warehouses that are around us more, enabling us to further cut back inventory. I also became more involved in sales, went on some calls and realized that my salespeople drive by more business than they should (and don't realize it). We also started to renegotiate everything. Even though we're down 17%, we have a better sense of our market and are making money."
And some more news ...
- Some of you may have heard of the Home Depot Earth Day promotion. They were giving away one million EcoSmart CFLs. This shows two things. One is that energy opportunities abound. The second is the power of private labeling. EcoSmart is manufactured by TCP. The into stock price advantage allows for unique promotional endeavors.From
- the NAILD Annual Conference: while attendance is down, there are still more distributors attending than manufacturers (albeit by one). A "one to one" ratio makes for a mutually beneficial conference. A big topic of conversation is LEDs and everyone expects LEDs to be the main focus of LightFair. Distributors are still hesitant in understanding which suppliers to support in LEDs. (We've recently conducted some distributor and contractor research on LEDs and will share shortly.)
- Speaking of NAILD and LightFair, NAILD will be sponsoring a seminar at LightFair entitled "What's new in lamps and ballasts" on Wednesday, May 6 from 4:30-6:30.
- Also, as of May 1, NAILD's Lighting Specialist course (LS1) will be open to non-members. Could be a great way to better positioning your lighting personnel as well as provide additional training. They are at booth 1276 at LightFair or contact NAILD.
Just some thoughts ... been on planes lately, so look for a "reading roundup" in the next week or so.
What are you seeing and hearing?