Breaking Down Industry Barriers to “Emerging Talent”

Last week I received a sponsorship solicitation email from NAED that got me thinking in a tangential way (bear with me!).  The email was entitled “Support Emerging Talent in Electrical Distribution”. They are looking for manufacturers, service providers and maybe some distributors to sponsor speakers and food functions for the upcoming LEAD Conference in July. Nothing wrong with that.  The part that got me thinking was “Support Emerging Talent”.

Let’s expand the definition of “talent” to also include individuals and products we are not aware of … hence possibly “emerging manufacturers.”

Giving the evolving structure of the industry … more consolidation among distributors as well as among manufacturers, almost 1300 distributors in one of the two marketing groups, the role (expectation) of rebates, challenges on time for training, and more, where becomes the entry points for new companies and new technologies?

Consider:

• The marketing groups, which are the gateway for many distributors, focus solely on established companies (with the exception of AD’s Clean Energy division which has some “new” as well as existing suppliers)
• National chains have preferred lists and don’t encourage their branches to purchase from “non-approved” suppliers or new technologies unless it is a special customer request.
• Most distributor sales management and purchasing staffs don’t have the time to meet with unproven suppliers or the skill set to ascertain if a new offering could represent an opportunity.
• Most distributor sales organizations would rather sell / accept orders / support products that they know rather than research other solutions.
• Rebates are an integral part of the solution

And could this be some of the reason why alternative channels, inclusive of smaller manufacturers going direct, have increased as a percentage of industry sales? After all, these entrepreneurial companies need to find a path to market to ensure their existence.

Consider companies in the solar industry. LED companies. Electric vehicle charging companies. Companies with smart grid technology. Companies in the a/v and security markets. Or companies that have a very narrow product line.

So the question becomes, “how do ‘you’ become a viable outlet for emerging companies?” Could this provide a competitive advantage in your marketplace? Should marketing groups be a resource for “emerging” companies (not start-ups, but companies that have viable products that aren’t known in the industry)?

Years ago, when I was VP Marketing at IMARK, I remember meeting with a small fastener company that is in the industry. Their CEO, known to be a little eccentric, asked an interesting question, “shouldn’t marketing groups help smaller manufacturers compete in the industry and ‘market’ them”? He compared this to the groups facilitating helping smaller distributors to compete against the chains and earning comparable rebates.  I’m not saying the role should strictly be for marketing groups. NAED could consider how to be more “open” to smaller companies to showcase them, distributors could be more open (and larger ones could dedicate someone to supplier diversity – defined as size) and I’m sure there are other ideas.

Think of if this way.  Manufacturers in the solar industry saw an emerging market. Many couldn’t get access to the electrical channel so they went direct to solar dealers and electrical contractors. Their margin range becomes defined. When the market matures, where is the margin opportunity for them to integrate distribution? Hasn’t this also occurred for a myriad of niche LED lighting lines?

Expanding supplier reach and adapting to a changing market can be elements to help compete against alternative channels … we can be the channel of choice if we offer the range of products customers seek.  Distributors used to sell appliances … what will we sell next and how will we become aware of, and welcome, those suppliers?

If we’re not receptive, we’ll get left behind.