Picking a plc line to distribute

[joeyb23]

Hi,

I recently started with a small distributing company in Buffalo. It is my task to pick up a plc line to distribute. We are limited between Moeller Automation, Cutler - Hammer and Mitsubishi. What questions should i be asking when meeting with the representatives from each company????

Thank You Joe

 

[RussB]

Distributor Questions

There are 3 important questions.
1. How much margin can I make. (This is what feeds my kids.)
2. How does the sell price compare to AB? (This is what your customer is thinking.)
4. How many other distributors in my teritory sell this product? (This determins the 'Street price')

Keep this in mind:
The technical aspects are irrevilent here.
You will need to be able to support the product regardless.....
How large is the existing base of users?
Are they buying lunch?
What are the mandatory stocking levels?

 

[joeyb23]

Technical aspect

I would also be supporting and programming the line we pick up for out consumers. Do you know anything about Moeller, Cuttler - Hammer, or Mitsubishi as the quality as a whole. Also i think i might have to ask technical questions. We will not only be distributing PLCs as a stand alone but also be incorporating them on our conveyor lines to sell as a whole package. Id would apprecitae any additional information.

Thanks Again,
Joe

 

[Stephen Luft]

Joey,

Why are you limited to the three you mentioned?

 

[RussB]

Distribute PLCs

The best information I can give you is "don't".
In the long term one can not be a distributor, and OEM. You limit the number of customers that you can work with because of competition, either real or percieved.
Your competing conveyor (or other machinery) builders will not buy from thier competitors. That limits you to MRO business, they want to buy everything from one vendor.

My advice, pick a nitch and be the BEST in that area.

 

[joeyb23]

I am limited to those 3 only because all other lines have distributors in my area---Ab seimens, modican etc wont let us pick them up........

 

[joeyb23]

RussB

Boss wants to pick up a plc line----wants to outsource me as a programmer and installer as well with the eqiup---other option dont pick up a line and just use me as a programmer for other plc's ie ab

 

[Stephen Luft]

Joey,

Have you considered a different approach from the traditional packaged PLCs if you are going to be both an OEM and a distributor?

I would have to disagree with Russ, in that it is possible to do both. What matters is how you set up your companies. If you are going to run both of them, make certain that you separate them from one another, to present no potential for conflict between your distributor customers and your conveyor customers.

All three manufacturers that you have selected offer good products. You will have competition from Forster in Rochester for Mitsubishi. When taking on a line that competes directly with AB, AD or any of the many others, it will usually come down to either price or name.

You mentioned that you are in the Buffalo area. We are located in Gasport and do not currently have a distributor for this area. We do not put on a distributor for the sake of having a distributor in an area. We put on a distributor who can not only support our products, but also understands our concept in how we market our products and is able to apply it.

So, if you are interested, you can contact me to discuss further. Here is our web site for you to review if you are interested. www.entertron.com

God Bless,

 

[ArikBY]

I agree with RussB If you want to sale PLCs it OK. but it not coming togther with saleing projects too.
You need to be exclusively to do both.and even then no one will like you.
If you decide to do so OEM will not be your customer only end user.
It very attempting to do both but it two edge sword.

 

[RussB]

PLC Distributor or OEM

Joey,
Stephen has a pretty good sales pitch there, but I know from experience. The OEM/Distributor combination will not last very long, take a look around, how many companies with that combination can you find? Why?

Your second option is MUCH better, as an integrator and/or service center you can service and use the best product for the job. As a distributor you will be limited to the best product that 'your' vendor offers.

This same logic is true for those people who will not entertain even looking at anything but brand AorB.

Good Luck with your decision and as Stepen says God Bless you and your boss.

 

[joeyb23]

So what your tyring to say is only offer it as a distributor or an oem. But the better option would be to offer the service and support for all types of plcs.....but how get good pricing to offer the products from all manufacturers to be competitive..

 

[joeyb23]

My decision needs to be made fairley quick i have a meeting with reps from all 3 companies on 5/21....And why would it not be good to offer the plcs as stand alone products and also offer them as a packaged product that i would do the support and service on with our conveyor systems.

thanks again

 

[joeyb23]

My company distributes mostly pt products and conveyor systems. I am new to the company and my boss wants to start to get into the plc and electrical aspect of distributing. My background is electrical engineering. I graduated only 6 months ago and I really dont know what course of action to take. Any other suggestions.

Thanks,
Joey

 

[RussB]

PLC Distributor

So what your tyring to say is only offer it as a distributor or an oem. But the better option would be to offer the service and support for all types of plcs.....but how get good pricing to offer the products from all manufacturers to be competitive..

If you are doing this to get better pricing, that is another reason why NOT to. I don't want to be too repititious, but what you need to suceed is a good product at a fair price and GREAT service. You can increase your profits by selling more volume or decrease costs. You and your boss need to decide what the best way is for your company. This is a very simplistic approach but it is the bottom line of every business model out there.

I personally believe that it is better for everyone to make a little less money but have happy customers who keep comming back and help sell you and your product by word of mouth.

Good Luck and forward this thread to your boss.

 

[joeyb23]

RussB,