Never has the industrial and medical gas distributor been faced with such a need to rethink their strategy and approach to the specialty gas business. Though sales continue to grow at a healthy rate, margins are shrinking at an equal rate as previously high-end products are being priced as commodities, especially by the majors.
Recent acquisitions and mergers have also introduced an element of uncertainty among independent distributors. Many have become apprehensive about their continued source of high-end specialty gas products and equipment, as well as the technical support they need to maintain and expand their presence in the marketplace. The bottom line is that there are decisions to be made and the distributor feels the squeeze. In an effort to improve margins, many distributors quickly resort to increasing prices. Though this may improve profits on the sale, it becomes counterproductive when it is at the expense of other existing sales if your pricing becomes less competitive. Others decide to invest in technology that allows them to produce more of what they sell. Both strategies are valid as part of an overall plan, but this approach will fall short of the goal if net new sales are not part of the equation. “Nothing happens until somebody sells something” is an adage worth remembering.
Selling is easy, right? Establish rapport, qualify the lead, establish the need, sell your company, fill the need, get the commitment, and close the deal. Then why, with hundreds of independent gas and welding distributors spread throughout the country, have only a double-handful become successful regional players and developed profitable specialty gas business programs? The key ingredient is knowledge: knowledge of the local market pressures, knowledge of customers’ applications, and knowledge of their own company’s ability to serve the needs of their customers (their company’s edge). Without this knowledge, the first step in the process, establishing rapport, becomes a daunting task.
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