I am pleased we are beginning a new fiscal quarter as Jan – Mar was sluggish. The Industrial Supply Association posted a “no growth” cycle for Feb ‘17 and that is consistent with what I have seen in the marketplace. Why is the Industrial MRO market down, you ask? I am uncertain, though I have an opinion, but I shall refrain from delving into politics in this newsletter.
We are seeing an aggressive push by all the major MRO suppliers with a “no holds barred” philosophy. Their size and dollars allows them to undercut prices and push services that make it difficult for Independent Distributors to compete. Their weakness still lies within their technical capabilities and customer service, or rather their lack of both. The large MRO Distributors do not have the technical expertise and personalized customer service that H&S offers our customers. Fortunately, many customers view quality products, technical expertise and personalized service as valued commodities vs. the mindset price as the first, last and only determining factor.
We recently received a Request for Proposal and in my 40+ years in this market I have never seen a RFP such as this. Essentially, it was “I want, I want, I want and oh, I want all at the supplier’s expense!” To accede to the incredulous demands of this RFP would be detrimental to H&S’ bottom line. As such, it is our intent “hold fire” to see if a competitor attempts to take on this RFP. Ultimately, it will prove interesting to see how satisfied the customer will be with the service they receive. After all, one often truly does receive what one pays for, do we not?
Our market is rapidly changing and H&S is bolstering our arsenal of weapons by deepening our technical expertise, broadening our manufacturer base, investing in technological advancements and expanding our customer service department. While H&S will never be the “cheapest” in our market (and all that connotation implies), we assuredly will be the “quality.”
President & CEO