Will you buy fire alarms from a new type of company?

Hello everyone,

I am testing a new business idea. This is a preliminary concept and I will refine based on the feedback I receive.

So I know the installers and others who purchase and install all types of detectors, panels, etc. buy it either directly from a manufacturer, a distributor (e.g. ADI), or a dealer. I have spoken to a few folks and I am hearing that the reason they buy from these people are:

  1. We know them, they are local, they are in the community, and some of them are even friends and associates.
  2. A company like Honeywell or a distributor like ADI or Anixter provide training, support, credit, etc.
  3. A local dealer is always there for you and may also provide tech support, training, credit, etc.

These are valid reasons, but what if there was, let’s say, an Amazon like website for all that you need, and also had technical support, financing, etc. Well, you wonder what is the catch? What I am thinking is that if I could centralize all the support and modernize all the operations, I could be able to sell at a lower cost, and pass on the savings to the buyers. The same service and support, but lower prices. Obviously, it is not possible to provide that in-person interaction that many of you appreciate because there might not be any physical locations.

What do you think? Do you value that in-person interaction so much that you are happy to pay higher prices? Or what else will you need in order for you to switch to a different type of distribution model? I think I can get you all the major brands. Appreciate any input that you can provide. Thanks.

If i’m buying directly from a manufacturer, how would your prices be cheaper?

[quote=chris+s post_id=80064 time=1523986615 user_id=3064]

If i’m buying directly from a manufacturer, how would your prices be cheaper?

[/quote]

Chris, my understanding is that manufacturers price it at a certain level because, well, they can. But you know how Amazon or Walmart work? What I am thinking is that if I can raise enough venture capital, then, I can push the manufacturers to give us a volume discount, and leave us free to set whatever price we think will get us the most business. I would not be surprised that companies like Potter (at one time they reduced the number of dealers to keep prices from falling through competition) may not sell to us, and that is okay, but we will see.

What I am really hoping to learn from buyers is that Is there a new model to sell in this industry? Great prices, customer/tech service from professionals 24X7X365, financing, next-day delivery, etc. It’s just that you may not have a store to go to, the way there is no store to go to for Wayfair or Casper mattress. I have heard that things are a bit different on the business-to-business side where contractors like the flexibility of going to a warehouse type store, pick up stuff right there, ask questions from folks who might be technically competent, and so forth.

So feel free to share your ideas as to what you would like to see in a new type of company so that things that we have not even thought of yet, we can start to include them. Thanks.

[quote=milfordjason post_id=80068 time=1524000549 user_id=4546]

What I am really hoping to learn from buyers is that Is there a new model to sell in this industry? Great prices, customer/tech service from professionals 24X7X365, financing, next-day delivery, etc. It’s just that you may not have a store to go to, the way there is no store to go to for Wayfair or Casper mattress. I have heard that things are a bit different on the business-to-business side where contractors like the flexibility of going to a warehouse type store, pick up stuff right there, ask questions from folks who might be technically competent, and so forth.

So feel free to share your ideas as to what you would like to see in a new type of company so that things that we have not even thought of yet, we can start to include them. Thanks.

[/quote]

We already order 99% of everything direct from the manufacturer, goes from their warehouse to our warehouse or our job site, there’s no building for us to go to if we need to pick up parts. That’s something you should probably keep in mind, so you would need a pretty good sized volume discount to make it worth going from the manufacturer, to your shop, then to ours… and then there’s the whole issue of, why wouldn’t you just have it drop shipped to us directly from the manufacturer with some sort of additional discount. You’d be on the hook for any RMA’s though. Not really sure what kind of discount you’d need to make it worth while.

I get that you’re trying to create an anixter/ADI without a store front (does anixter have storefronts?) and pass the savings a long… but all of those do way more than fire alarm and I think people use ADI specifically for when they need to run to a store to get something, otherwise they’d have ordered it from elsewhere ahead of time.

The lower end stuff we can get from ADI/Anixter/whoever but I’m guessing the profit margins on those are already pretty low to compete in that market.

Just thinking out loud… take it as you will. There might be a market for this from electricals or what not that don’t order directly from manufacturers because they simply don’t do enough fire alarm business.

I’m nodding along with much of what chris+s has said. There may be room for innovation here, but as a company with factory trained technicians and a close relationship with our primary manufacturer, I am not seeing how a middleman would fit in this scenario. The primary use we have for brick and mortar wholesale distributors is when we need small parts right away like conventional pull stations, surge protectors, batteries, etc.

That said, we depend on these distributors for particular lines that we don’t sell enough of to buy straight from manufacturer. If there were an online option with fast shipping, competitive prices, it may be worth our consideration. I’d be curious to see if the economies of scale could make it feasible. It seems like the profit margin may be slim in trying to ship small quantities of batteries for less cost than the local wholesalers. Also, a lot of these distributors already offer shipping to our office, we just opt to pick it up to save on the shipping cost.