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All hail the distributors!

If you are a contractor, you do not want to go it alone, which is why they can be so critical to your overall financial health.


July 1, 2005  


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Isn’t spam grand? Every day we are inundated with hundreds of spam e-mails that proclaim values and deals beyond belief. My daddy used to say that “if it seems to good to be true, it probably isn’t.”

The $48 Rolex watch is obviously a counterfeit. In the communications industry there are some counterfeit products. Some are even labeled and packaged to look identical to the ‘real deal’.

Imagine that you found out that the installed cable did not meet the transmission requirements of the product you thought you bought, AFTER you just completed the installation of a 700- station cabling system for a call centre or bank?

While this is certainly not a common occurrence, it can happen. The pace of technology in the communications network industry is moving so quickly that a purchasing agent would have to be dedicated to new products and improvements on a full time basis. That is not a practical solution.

Million-dollar test lab

Add to this frustration the need for product testing and quality control and bingo, you need another dozen or so full time employees. Also, do not forget the million-dollar test laboratory because you can no longer evaluate product on a standalone basis.

Now you have to put it to work in a real network to calculate the actual performance with other components and to do that type of testing, you will require some real “high dollar” techs. Throw that in your budget.

Fortunately, none of those moves are necessary thanks to the distributor. Face it; the distributor is the communications cabling and connector markets largest buyer.

For the manufacturers, maintaining the best working relationship possible is an absolute must. The distributor is the focal point for the products to meet, combine, and create the network systems required in the marketplace. We don’t buy parts anymore. We buy systems. The systems must be integrated and maximized.

Today, the process of developing a design and evaluating alternatives for the cabling network infrastructure is more challenging than ever before.

Functionality, performance, life-cycle term, and budget are thrown into the mix along with the entire technical specification.

In the world of communications infrastructure, using a distributor is a logical tool for the contractor. However, we still see many contractors failing to use or capture the values they offer.

The time to find out about glitches or mismatches is not after the fact. The communications infrastructure was once a formula of 80% labour and 20% materials. Today, that formula has evolved to 52% labor and 48% materials. Once the installation has been performed, a change-out could cost the contractor the entire labour investment.

That scenario is a death sentence for the contractors’ profitability.

Inventory headaches

It is one thing to make the sale. It is another thing to deliver it. There are no mystical gurus in the back room at the contractors’ office with a database of current connectivity solutions and costs.

Also, maintaining large inventories to service their customers is not a good business practice for the contractor. We have all seen inventory building up in the contractor’s warehouse AND that sometimes adds up to a small fortune.

Much of the contractor’s inventory that is not installed immediately usually ends up as junk. Out of date, obsolete, or incomplete materials mean wasted dollars. Most contractors don’t manage inventory on a small basis. As an option, the contractor should turn to the distributor to offer that part of the business solution for their customers.

Having all of the materials for the communications network is only part of the solution. We must have the peripherals. We need labeling and record systems. We need testers and analyzers. We need to stay abreast of technology, codes, and standards. We also need to be able to predict the future.

Building barriers to obsolescence requires a vision for the future. Planning for the future challenges, while delivering today’s solutions, is imperative. Anything less is usually unacceptable. If you are a contractor, you do not want to go it alone, which is why the distributor is so critical to your overall financial health.

Frank Bisbee is the founding editor of Wireville, an industry newsletter based in Jacksonville, Fla.