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It looks likes business could slow down a bit in 2020. I don’t expect anything catastrophic, and certainly nothing like what the electrical industry experienced in the 2008-2009 Great Recession.
As you will find out in the 2020 Market Planning Guide, distributor survey respondents are forecasting a +4% gain in sales revenues on a national basis. That’s at the low end of the industry’s historical annual growth range of +4% to +8%. If these forecasts ring true for 2020, increasing your company’s revenues may be just a bit harder next year, and now might be a good time to sit down with your management team and brainstorm about some new revenue possibilities.
With EW’s 100th anniversary coming up next year and this month marking my 37th work anniversary with this magazine, I got thinking about the most innovative growth strategies the magazine has covered over the years. Three of them are outlined below.
Ask your customers where they need help. Last month’s cover story about Lonestar Electric Supply, Houston, explored how Jeff Metzler and his team built a business from scratch by focusing on helping customers with their pain points. One of their solutions was developing a package of design and logistical services to help customers with their lighting jobs.
Working with distributors that service different trades. A recent blog post by City Electric Supply (CES) about their new branch in Alexandria, VA, reminded me of some distributors I have written about who had interesting business relationships with distributors from outside the electrical market.
CES Branch Manager John Rodger said in the post that his new branch — less than 10 miles from where the Amazon HQ2 will be built — is right next to an HVAC company, a refrigeration company and a builder. It’s not uncommon for customers from the HVAC distributor to stop by his branch to open up accounts and pick up odds-and-ends they need for their jobs.
It reminded me of a lighting showroom Maynards Electric Supply, Rochester, NY, once ran in a converted shopping mall, where several distributors servicing the residential market had showrooms so homeowners could pick out products for their new homes without having to drive all over the city to different distributor showrooms.
The post on the new CES location also got me thinking about a 1993 visit to the Fort Collins, CO, branch of Winsupply, which at that time shared a warehouse with several other Winsupply companies in different trades.
Then there’s the industrial mall that Turtle & Hughes had in Bridgewater, NJ. I wrote a 2003 cover story on how their industrial supply subsidiary and an industrial rubber company located there helped customers who needed a mix of electrical and industrial supplies.
Making money on under-utilized warehouse space. I remember chatting with Terry Burkholder of Dauphin Associates, Harrisburg, PA, in 1990 about an idea he had for leasing some of their excess warehouse space to other companies. This next idea is a modern-day twist of Burkholder’s concept.
A recent New York Times article reported on the current traffic and parking issues in New York City because of the 1.5 million packages delivered each day by Amazon Prime, UPS and FedEx. These packages often overwhelm the package storage capacity of the Big Apple’s apartment buildings, and they are often just left in the entryways of buildings and can be stolen.
Retailers like Home Depot, WalMart and Whole Foods have package lockers where folks can pick up their online orders. What if electrical distributors utilized excess capacity in their brick-and-mortar warehouses and applied their expertise in logistics and warehousing to set up a “package depot” side businesses where folks could pick up their packages after work? It would help eliminate the widespread problem of thieves stealing packages from doorsteps, help apartment managers and local post offices from being overwhelmed with these online deliveries, and possibly turn into a profitable use of under-utilized warehouse space.
Perhaps one of these ideas or some of the data in EW’s 2020 Market Planning Guide will spark a discussion at your next strategic planning session and generate some new profitable solutions for new sales in 2020.