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What If

March 1, 2008
Here are some ideas that could change how the electrical market does business, even with this uncertain economic climate.

During my travels to several industry meetings earlier this year, the answers I got to the million-dollar question, “How's business?” elicited some pretty interesting responses, particularly in the context of the uncertain U.S. economic climate. With the onslaught of dire economic news in the general media, I was expecting to find far more people perched on their office window ledges. This year won't be a banner year for many of the industry executives with whom I spoke. And if the residential market is their main market, well, you can pretty much guess the types of double-digit declines they expect for 2008.

But I was surprised to hear how many companies are more than holding their own, and were even forecasting some modest growth for this year. They tended to be folks with companies aimed squarely at the electrical wholesaling industry's sweet-spot: the commercial and industrial markets that account for approximately half of all industry sales. The biggest “what if” on the horizon for this all-things-considered-fairly-optimistic outlook is what if banks tighten their lending on commercial projects and stunt any existing market demand for this work.

In producing this month's issue of Electrical Wholesaling, the magazine's editors discovered a bunch of other interesting “what ifs” that could dramatically impact the business fortunes of electrical distributors, independent manufacturers' reps and electrical manufacturers — in 2008 and for years to come.

What if manufacturers of LEDs develop dependable, economically priced LED lighting systems that produce white light for general lighting applications much faster than expected? Imagine how that R&D breakthrough could affect the millions of light bulbs, lighting fixtures, ballasts and related lighting equipment now produced each year by lighting manufacturers and stocked by thousands of electrical distributors in their warehouses. Check out “The Land of LEDs” on page 20 to get a sense of where the LED market is at right now.

What if yet another overseas distributor took an interest in the electrical market and made a major acquisition of a national or large regional electrical distributor? It's quite possible. Wolseley plc is the world's largest distributor of plumbing and building supplies. Its U.S. operations, Ferguson Enterprises and Stock Building Supply, are suffering through 20-percent declines this year because they are tied so tightly to the fortunes of the homebuilding market. Diversifying into the commercial/industrial (read electrical) market could lessen the blow. Wolseley owns several smaller electrical distributors in the United States, but hasn't yet stepped into the market in a big way.

What if companies in the electrical market figure out how to use Web 2.0 technology? As Mike Rioux says in his article, “The World of Web 2.0” on page 44, Web 2.0 could change how distributors, reps and manufacturers interact with their customers.

What if more distributors took to heart the concept of upselling to their customers' customers? Allen Ray and David Gordon suggest that distributors should work with and through their existing accounts to find out how they can help their customers' customers (see “Meeting Your Customers' Customers” on page 53). This might mean working with an electrical contractor to teach a specifying engineer, general contractor or building owner how some new products can save them money.

What if more companies take the Lean Thinking philosophy to heart? In Howard Coleman's article, “Lean Thinking,” (page 63), he says that just looking at your company from some new perspectives and employing some creative brainstorming techniques can uncover operational savings and even teach you and your employees some new ways to do business.