A common topic that comes up in my conversations with contractors and distributors this year is the ever-increasing product shortages.
This has been especially true with higher efficiency equipment, as these products typically use more sophisticated electronics that depend on a shrinking supply of microchips from the Pacific Rim.
Unless you live under a rock, you’ve probably seen the daily news broadcasts about container ships backed up at ports — especially on the west coast.
These ongoing disruptions to the supply chain have impacted HVAC equipment manufacturers for many months, and they don’t seem to be going away any time soon. Eventually, things will catch up, but it’s anybody’s guess when that will happen.
In the meantime, how can distributors help contractors get through this difficult time, and what can contractors do to keep customers happy and provide the best possible products and services?
Short and Long-Term Strategies
When you can’t get higher efficiency equipment, a good short-term solution is to couple more readily available lower efficiency equipment with air distribution system improvements.
National statistics show the typical HVAC system delivers less than 60% of its capacity at the registers. This dramatically reduces the effective efficiency of any equipment.
By upgrading air distribution systems to deliver 80-90% of equipment capacity you can achieve great savings and comfort improvements even without the highest efficiency equipment. When you couple an Air Upgrade with mid-efficiency equipment, you can achieve the same result at a similar price to their higher efficiency counterparts.
If, for example, you typically sell an 18 SEER 95% AFUE replacement system for $9,000, you could price a lower efficiency system at $6,000 and add air distribution improvements for an additional $3,000. The net effect is a high-performing system that will deliver a higher effective efficiency at the registers.
The bonus is your customer experiences improved comfort with an upgraded delivery system, their equipment will last longer, and you can achieve higher margins on the additional work.
What’s great about this short-term strategy is it sets the stage for the longer-term, once higher efficiency equipment is more readily available. By continuing to include Air Upgrades and duct renovations, your average prices can continue to increase along with significantly higher net profits — and you are adding real value for your customers!
How Can Distributors Help?
Distributors can support their contractor customers by offering training that focuses on improving installation quality and delivered system efficiency.
Contractors need your support more than ever during these trying times. Rather than shying away from talking to your customers because you don’t want to get beat up on equipment shortages, be part of the solution. Show them ways they can make any system they install better.
By being proactive now and working closely with contractors to offer them great support and training, they will be more forgiving. They’ll see you as a valuable long-term partner.
It’s more important than ever that manufacturers, distributors, and contractors work together to make the most of the products that are available.
I’m excited to see several distributors and manufacturers stepping up to help contractors get through these challenges with training and creative approaches to selling products that are available right now. This investment will create lasting dividends for years to come.