Changes Ahead for the Distribution Channel?

Originally published
Originally published: 8/1/2006

Where do you see the industry heading over the next five, 10, 20 years?

The industry will continue its growth as the economy continues to expand, barring any unforeseen natural or man-made disasters that may slow, but not stop, the process. Equipment efficiency, indoor air quality (IAQ), and technician certification will continue to expand in prominence as consumers continually become more educated and demand that higher standards be met.

What do you see as some of the trends?

The HVACR industry will be significantly impacted by the influx of foreign products, resulting in further consolidations and a diversification of product offerings.

The need for greater efficiency and energy savings will continue to grow as energy costs continue to rise. Unless alternative energy sources are mandated, the HVACR industry will continue to be responsible for finding ways to conserve energy.

Manufacturers will continue to experiment with alternative methods of gaining market share. However, wholesale distribution is a proven, successful, 400-year-old process. Irrespective of how manufacturers choose to take their products to market, the cost of providing the time, place, and utility to do so will always remain, as will the need to include those costs in the final product price. Independent wholesale distribution is proven to be the most qualified and efficient method of performing logistical and marketing functions, and at the lowest cost.

Large homebuilders may continue to leverage their buying power with manufacturers and their use of unqualified installers, but ultimately they will return to relying fully on the quality installations and expertise of contractors. As consumers continue to rapidly become more knowledgeable on comfort systems, energy savings, and IAQ, they will demand quality in all aspects of their home investment.

It will continue to be essential that all participants in the HVACR channel join together to develop an industry-wide refrigerant reclaim program as soon as possible.

Wholesale distributors will continue to enhance service to their customer base by joining with other distributors to provide full service HVACR, plumbing, and electrical distribution at branch locations in select markets.

How will the distribution channel change, and what will those changes mean for contractors?

I don’t believe there will be substantial change throughout the distribution channel, because wholesale distributors have been very effective in taking the lead in reducing their costs of operation through employing the use of technology, expanding employee proficiency, and refining and expanding distribution systems and branch operations. What this means is the contractor’s time is better spent meeting their customers’ needs more efficiently and cost-effectively.


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Changes Ahead for the Distribution Channel?

HVACR Business interviews Donald L. Frendberg, executive vice president/COO of the Heating, Airconditioning & Refrigeration Distributors International (HARDI) about industry trends.