After a rough couple of pandemic years, electrical wholesalers came out swinging in 2022. But the new environment is not without its own challenges: ongoing supply chain disruptions make it hard to keep shelves stocked; the “Great Resignation” has left its mark on the labor supply; and runaway inflation is making it more expensive to run a growing electrical distribution company.
Still, many electrical wholesalers are seeing growth in 2022. Electrical Wholesaling magazine released its yearly list of the U.S.’ Top 150 electrical distributors in June of that year. The magazine’s editors also surveyed some of these leaders on how they achieved growth, and their responses hold valuable lessons for everyone in the industry. Here are five of the ways leading electrical wholesalers, from the latest ranking list and beyond, are growing in 2022:
5 Strategies for Growing Your Electrical Wholesaling Business
1. Break into the utilities market.
The 2022 Top 150 list featured multiple distributors that specialize in utilities, a market that’s poised for growth. The 2021 Infrastructure Investment and Jobs Act set aside $73 billion for power grid improvements, plus $12.5 billion for a national network of electric vehicle chargers.
Those funds are still trickling down to state governments and agencies, so they didn’t make a huge difference in 2022 — but they’re likely to create a lot of growth in the utilities sector over the next several years. Wholesalers with an established footprint in the field will see the most benefits, so now’s the time to market your business to utility firms.
2. Make new efforts to keep inventory in stock.
When asked what contributed to 2022 revenue growth, several Top 150 wholesalers mentioned inventory: They had it when competitors didn’t, and that was a key driver of success. In an era of supply chain challenges, the distributor with products on the shelf will win the most business. But those same supply chain issues require some creativity to keep stock levels high.
Look for new suppliers. Establish an inventory team, who can experiment with new ways to source materials. Consider loans or other funding to buy more than you think you’ll need. No one knows exactly how to counteract the effects of supply chain breakdowns; experimentation and creativity will yield new responses to a developing situation.
3. Expand your market area when researching large nearby projects.
One distributor told Electrical Wholesaler that “large projects” in their market areas contributed to double-digit profit growth. These projects included new constructions, manufacturing plant extensions, and utility upgrades. You’re probably already looking out for these opportunities, but if you’re not finding enough of them, it’s time to expand your footprint. Research nearby municipalities to see if construction is booming there, even if it isn’t in your hometown. If your delivery trucks can reach an area, it’s fair game for bids.
4. Grow your sales team.
Another Top 150 wholesaler attributed some of their growth to “investments in new salespeople.” These investments may include new hiring, advanced training, or incentive programs — the key is to reach a broader audience while delivering effective sales outreach. Pent-up demand seems to be everywhere in 2022, and investing in your sales team can help you take advantage of these conditions.
5. Provide value-added services your competitors don’t.
It’s not enough to get new customers; you also need to keep them from turning to a competitor. The best way to stand out in a crowded market is to provide a better experience, which, in the electrical distribution industry, typically involves value-added services. That could include everything from cut-to-length cable distribution and custom dyeing to contactless, 24/7 delivery (achievable by setting up Will Call Dropboxes at your facilities and/or at customer job sites).
But one new trend that can set you apart is to offer full delivered solutions, orders of electrical materials out of the packaging, pre-loaded onto ready-to-use material handling carts. Ship multiple runs of cable on multi-compartment Parallel Reel Payouts. Offer a full job’s worth of light fixtures, unpackaged and inspected, on a Light Fixture Cart. Send a rigid conduit order bundled onto a Conduit Carrier Cart.
With a delivered solution, electricians can get right to work, reducing the cost and productivity losses associated with material handling. When customers see how much more efficient they can be with delivered solutions, they’ll stay loyal to the distributor who offers them.
To learn more about specialized handling equipment for electrical materials, contact the BHS sales team at 1.800.BHS.9500 today.