I was recently perusing the plumbing, heating, and cooling industries monthly staple, The Wholesaler, December 2007 issue. The Wholesaler highlights the news, trends, and happenings for the industry’s distribution channels.
Each month I’m struck by the number of articles that, summarized, celebrate the remodeling, expansion, or establishment of new wholesaler showrooms across our country. Simply put, these showrooms are seen by manufacturers as an opportunity to physically show their wears. Manufacturers like Kohler, Moen, Delta, and others look to entice customers; dare say end users, to purchase their product offerings using this tried and true brick and mortar channel.
As an eCommerce company, our showroom is far from traditional. Our showroom is dynamic and far reaching although we have "0" square footage; in other words, our showroom is the internet. As a Supply Chain Manager, ever time I read on of these articles touting some wholesalers' Taj Mahal showroom, I ask myself the following three questions:
- Showrooms reach a particular customer, is it the customer that manufacturers really want?
- Who decides what the customer wants to see in a showroom?
- How can the $’s behind manufacturer showroom incentive programs be better spent?
Look for the answers to these questions as I look further in to this “Tried & True” channel.
“Showrooms reach a particular customer, is it the customer that manufacturers really want?”
An elementary understanding of the plumbing industry’s distribution model is necessary in answering this question. It generally looks something like this:
If you yelled “confusing”, correct! In looking at the journey of a product, from manufacturer, each stop on the way is, in some way, with a customer. But at the end of the day if the product doesn’t reach the end user the rest is simply an effort in futility.
Where then are the showrooms you ask? Just through the doors of the wholesaler. Referring back to our chart, you might notice that there’s no arrow from the wholesaler to the end user.
As 1 of the 301,139,947 end users, you’re considering remodeling your bathroom. All you know is you want to replace your old dingy faucet. It isn’t likely you’ll locate 1 of the 1350 wholesalers with names like McJunkin Corp., EMCO LTD., and Johnstone Supply, Inc. even if your fingers are doing the walking. I didn’t pick those names from obscurity either; they’re ranked among the top 10 national wholesalers by, The Wholesaler, August 2007 issue.
But should you come upon the doors of a wholesaler, no matter how inviting they may look, I assure you the end user isn’t welcome. There is no opportunity for the end user to purchase anything sitting on a wholesaler’s showroom floor, no matter how shiny that Danze faucet is. Before I move on let me give you a quick note about retail: Space, Space, and Space. Retail only stocks, at best, the top 20% of any given product line, several A’s and some B’s, meaning their top selling products. So if you think you’ll find that exact faucet at retail, chances are you’ll be disappointed standing in the aisles of your big-box-store.
The showroom customer is the contractor. Even if the showroom is successful in convincing the contractor they prefer American Standard over Price Pfister, the big box model tells us the Do-It-Yourselfers aren’t asking the contractor. And if they do solicit the contractor for installation, isn’t the contractor going to cater to the end users interest?
PlumberSurplus.com saw three key shortfalls of the showroom:
- 1350 Wholesaler locations vs. 301,139,947 End Users
- The end user is disenfranchised from the showroom
- Retail provides limited breadth and depth of product
To overcome these shortfalls, PlumberSurplus.com complicated the diagram in an effort to simplify purchasing for the end user.
By establishing purchasing relationships with the manufacturer, manufacturer’s representative, and wholesaler, PlumberSurplus.com is able to tap into the 301,139,947 end users by bridging their disenfranchisement while providing a breadth and depth of product unequaled by a single channel.
Regardless of the project, the end user is able to research complete manufacturer product offerings across multiple manufacturer lines resulting in purchasing at a reasonable price without ever having to understand either of the above diagrams. Isn’t that the customer the manufacturer ultimately desires?
Next post, “Who decides what the customer wants to see in a showroom?” Understanding breadth and depth of product.