Welding product manufacturers have always supported the industrial welding distribution channel and have been rewarded by that channel for their efforts. However, because of recent changes in the profile and focus of the welding distributor in the US, and the new emphasis on users’ demand for continuous improvement, selling philosophies may be shifting.
Gas sales, not hardgoods, have typically driven distributor profits and these days welding equipment and consumables have become a bit of a “pawn” in the “P&L chess” game to capture the “king” gas account. With this scenario, a hardgoods manufacturer may consider itself at risk if it strictly relies on the distribution channel that has, in many cases, reduced its “selling efforts” for welding products. If the distributor is only taking orders from the end user, not only does the end user not receive the technical support, but the manufacturer could lose control of its own destiny.
The goals of manufacturers and distributors are not always perfectly aligned. Consolidation of the distributor channel has promoted the mega distributor, and that distributor often times promotes its own private label where possible to build its brand for market penetration and control. This strategy is being adopted by the distributor to build power in the channel, increase profitability, and support its capital-intense gas business. This strategy, however, can dilute the manufacturer’s brand name.
Technology in welding has recently advanced more rapidly than any time in its 100+ year history, which has helped the fabricator to be more effective and efficient in both manufacturing and construction. With less distributor investment in the training and learning of new technologies, however, the distributor adds a smaller amount of technical value to the end user and to the industry as a whole. With less technical knowledge, the distributor becomes more of a supplier rather than a real value-added partner that can help the end user be more successful. Without welding and cutting technical knowledge, the distributor sales person may become more like a car salesman who talks about the number of cup holders in a vehicle but knows little about the engine or the operation of the automobile.
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