Do you purchase direct from manufacturers?

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tortuga

tortuga

Code Historian
Location
Oregon
Occupation
Electrical Design
Do any of you purchase direct from manufacturers rep instead of going through a supply house?
If so what manufacturers do this and what kind of minimum orders?
I have asked a few and been shot down in the past.
Thanks in advance.
 
tortuga said:
Do any of you purchase direct from manufacturers rep instead of going through a supply house?
If so what manufacturers do this and what kind of minimum orders?
I have asked a few and been shot down in the past.
Thanks in advance.
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The only things I do is HID lighting, and specialized equipment that other wise a supply house cant order.

For HID lighting I use RUUD/ Economy lighting
 
most electrical manufacturers respect their distributors and will not sell direct. What products do you have in mind?
 
tortuga said:
Do any of you purchase direct from manufacturers rep instead of going through a supply house?
If so what manufacturers do this and what kind of minimum orders?
I have asked a few and been shot down in the past.
Thanks in advance.
Click to expand...

Yes, from all of them, but not the stuff a supply house would ever carry.
 
wireguru said:
most electrical manufacturers respect their distributors and will not sell direct. What products do you have in mind?
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Its common for us to get shipments direct from manufacturers. Things like MCCs, large quantities of parts, or something we need fast.

Usually billing is handled through the electrical house, so presumably they get a cut of some kind.
 
petersonra said:
Its common for us to get shipments direct from manufacturers. Things like MCCs, large quantities of parts, or something we need fast.

Usually billing is handled through the electrical house, so presumably they get a cut of some kind.
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Right. You are purchasing through the supply house (an authorized manufacturer) and they are having the product shipped from the manufacturer to you. It doesnt make sense for a truckful of switchgear to make a stop at CED between Square D and your shop for example.
 
zog said:
But is it is something the supply house does not carry or support and you are buying from the OEM, via them, what service are they providing?
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what I am saying doesnt apply to your company....

Ok, so lets say I am an EC and I need a switchgear lineup that my local graybar doesnt have in stock, should I be able to call up square D and buy it directly? absolutely not.

From a manufacturer's standpoint, why would I want to deal with customers who only buy a few thousand $ a year?
 
zog said:
For doing what?
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Carrying the money. Typically when a mfr does this, they cut the distributor in for 5 or 6%. The money costs that much if not more now days.

For the products you tend to buy though Zog, it makes more sense; big ticket, low volume, i.e. the stuff not usually carried by a distributor. But if Sq. D had to field the 10s of thousands of calls every day that would come in from all over the country for QO breakers and panels the market price would go up, not down.

One thing about buying direct from a mfr., they usually do NOT extend any terms. Cash/credit card in advance or Net 10 days is it. The old "I'll pay you as soon as I get paid" doesn't cut it with them.

The other thing is what's called "cost of sales". When a mfr sells direct, no distributor is going to be interested in selling their product. Why would they? So once that happens, then the only way the product gets to market is if the customer comes to them to ask for it, or the mfr hires a bunch of salesmen to cover the country which increases their overhead exponentially. It's a fallacy that many of them fall into, especially with the notion of the internet as a sales channel. It can work, as long as you trust that customers will always think to ask. People think Automation Direct is an example of that being a successful strategy, what they don't realize is that Automation Direct has had to go to a Distribution model now in order to maintain their volume discounts with the manufacturers. They still sell direct on the internet, but the orders are now being shipped from distribution companies, who then follow up with a salesman. Full circle...
 
Jraef said:
Carrying the money. Typically when a mfr does this, they cut the distributor in for 5 or 6%. The money costs that much if not more now days.

For the products you tend to buy though Zog, it makes more sense; big ticket, low volume, i.e. the stuff not usually carried by a distributor. But if Sq. D had to field the 10s of thousands of calls every day that would come in from all over the country for QO breakers and panels the market price would go up, not down.
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I understand that but I thought petersonra was asking about an MCC or large quanity of parts. Which is why I was confused about the distributor getting anything.
Jraef said:
One thing about buying direct from a mfr., they usually do NOT extend any terms. Cash/credit card in advance or Net 10 days is it. The old "I'll pay you as soon as I get paid" doesn't cut it with them.
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Me either :), guys I like can usually talk me into met 30 though.

Jraef said:
The other thing is what's called "cost of sales". When a mfr sells direct, no distributor is going to be interested in selling their product. Why would they? So once that happens, then the only way the product gets to market is if the customer comes to them to ask for it, or the mfr hires a bunch of salesmen to cover the country which increases their overhead exponentially. It's a fallacy that many of them fall into, especially with the notion of the internet as a sales channel. It can work, as long as you trust that customers will always think to ask. People think Automation Direct is an example of that being a successful strategy, what they don't realize is that Automation Direct has had to go to a Distribution model now in order to maintain their volume discounts with the manufacturers. They still sell direct on the internet, but the orders are now being shipped from distribution companies, who then follow up with a salesman. Full circle...
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Interesting, never heard of them, are they like an allbreakers/relectric?
 
[Zog, Automation Direct is an e-tailer of industrial control products, most notably PLCs.]


Why is it that major manufacturers like Square D, Siemens, ABB, and Eaton all 'fight' to protect their distributor relationships (even though they do have some direct sales) but the smaller, almost niche, manufacturers sell almost to anyone? Did they get big in spite of, or because of, their distributors?

Manufacturers sell through distribution simply because they 'net' more overall money. The multiplication of sales effort is worth the occasional 5-10% 'finders fee' that is lost by not taking an order direct.

A large national sale force for a manufacturer might be 400 people. How many companies, that will buy only (1) MCC per year can they contact? Now add 12,000 distributor sales people, how many single MCC order's can they get in a year?

But, every major manufacturer I know of, will take an order direct, completely cutting out the distributor, when market conditions dictate (i.e when selling to OEMs).
 
zog said:
But is it is something the supply house does not carry or support and you are buying from the OEM, via them, what service are they providing?
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Among other things, the supply house is providing administrative services such as billing. The supply house has established channels with the manufacturer for dealing with the financial aspects of the transaction that would otherwise force the manufacturer to make those arrangements. They really don't want to be a retailer of sorts. there is a benefit to us in that we do not have to go through all the rigmarole of getting credit approved and such.

The supply house also usually has much better lines of communication with the manufacturer than we do.
 
I am moving away from the supply house for more and more stuff.
They keep less and less in stock, there prices are high and the service is dwindling. A good supply house I have been going to for 10 years has had a lot of people leave or retire and the new people simply cant get it right.
When I was stumbeling on the net recently I arrived at a site for a "Manufacturers' representative" and they had some prepaid minimum order sheet with minimum orders of like $1000 or less for wire and conduit.
I did not have the time to research it more.
I am thinking I can meet these minimums by allot.

I have noticed the big home improvement stores around here have the lowest prices on wire especially romex, when I ask a supply house to match the price they said it was below there cost.
I am wondering if since I have to special order stuff more often why not spend a few extra bucks and order direct?
Another example is data comm stuff, I just ordered a bunch of cat5 data stuff for about 1/3 what the supply house can order it for.
I recently noticed my other supply house laid off a few people and all this leaves me wondering if like other industry's the trend is elceware.
Thanks for the insights and discussion.
 
tortuga said:
I am moving away from the supply house for more and more stuff.
They keep less and less in stock, there prices are high and the service is dwindling. A good supply house I have been going to for 10 years has had a lot of people leave or retire and the new people simply cant get it right.
When I was stumbeling on the net recently I arrived at a site for a "Manufacturers' representative" and they had some prepaid minimum order sheet with minimum orders of like $1000 or less for wire and conduit.
I did not have the time to research it more.
I am thinking I can meet these minimums by allot.

I have noticed the big home improvement stores around here have the lowest prices on wire especially romex, when I ask a supply house to match the price they said it was below there cost.
I am wondering if since I have to special order stuff more often why not spend a few extra bucks and order direct?
Another example is data comm stuff, I just ordered a bunch of cat5 data stuff for about 1/3 what the supply house can order it for.
I recently noticed my other supply house laid off a few people and all this leaves me wondering if like other industry's the trend is elceware.
Thanks for the insights and discussion.
Click to expand...

datacom stuff you can buy anywhere, websites such as monoprice for example. supply houses have always been a ripoff for datacom

as far as pipe and wire, you most likely arent going to be able to touch what the bix boxes are selling it for.

Last, while you found some mfgr rep information with price sheets and minimum orders that doesnt mean you can buy that product. The reps dont handle money, they just facilitate the relationship between the mfgr and customer and some perform order entry. The manufacturer still has to open you as a distributor to be able to purchase from them which they arent going to do.
 
Jraef said:
Carrying the money. Typically when a mfr does this, they cut the distributor in for 5 or 6%. The money costs that much if not more now days.

For the products you tend to buy though Zog, it makes more sense; big ticket, low volume, i.e. the stuff not usually carried by a distributor. But if Sq. D had to field the 10s of thousands of calls every day that would come in from all over the country for QO breakers and panels the market price would go up, not down.

One thing about buying direct from a mfr., they usually do NOT extend any terms. Cash/credit card in advance or Net 10 days is it. The old "I'll pay you as soon as I get paid" doesn't cut it with them.

The other thing is what's called "cost of sales". When a mfr sells direct, no distributor is going to be interested in selling their product. Why would they? So once that happens, then the only way the product gets to market is if the customer comes to them to ask for it, or the mfr hires a bunch of salesmen to cover the country which increases their overhead exponentially...
Click to expand...

GE has been selling direct to large industrial customers for at least 12-14 years in my area. A select few GE factory sales reps call on large customers directly, quote to them directly the same way they would quote to a distributor, and have negotiated terms and conditions with the customer that cover liability on engineered equipment. These are the same reps that the distributors call to quote switchgear, motor control centers, transformers, prefabricated substations, and other large equipment. Obviously the GE distributor in the area is dissatisfied with this arrangement, but as Zog pointed out, for a sophisticated customer buying engineered equipment the distributor adds no value to the transaction but does add cost. As you mentioned, there is some administrative overhead that GE incurs, but it is worth it because we as customers have a much closer relationship with them and the communciation channels are in place that enable them to offer highly custom equipment that would be difficult for a distributor to comprehend. I can see how a distributor does add value to the transaction for less sophisticated customers, which would include all customers without experienced power engineers and relay engineers working on the project - essentially everybody except the largest industrial customers.
 
jdsmith said:
GE has been selling direct to large industrial customers for at least 12-14 years in my area. A select few GE factory sales reps call on large customers directly, quote to them directly the same way they would quote to a distributor, and have negotiated terms and conditions with the customer that cover liability on engineered equipment. These are the same reps that the distributors call to quote switchgear, motor control centers, transformers, prefabricated substations, and other large equipment. Obviously the GE distributor in the area is dissatisfied with this arrangement, but as Zog pointed out, for a sophisticated customer buying engineered equipment the distributor adds no value to the transaction but does add cost. As you mentioned, there is some administrative overhead that GE incurs, but it is worth it because we as customers have a much closer relationship with them and the communication channels are in place that enable them to offer highly custom equipment that would be difficult for a distributor to comprehend. I can see how a distributor does add value to the transaction for less sophisticated customers, which would include all customers without experienced power engineers and relay engineers working on the project - essentially everybody except the largest industrial customers.
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Well as I can tell you in THIS THREAD , dealing with GE engineers was a fruitless effort that cost us $480 for extra parts that we couldn't even use, and we still had to go through a distributor, which GE and the distributor refused to return the parts.
 
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