Buy Direct or Through Distribution?
The year 2000 wasn’t that long ago, but back then the only practical way to buy automation components was through a distributor. Due to the efforts of AutomationDirect.com and others, this situation has changed radically, giving industrial plants and facilities choices when purchasing automation systems and related components.
The Value of Both
Seeing the value to their customers of both approaches, Endress+Hauser sells some products through distribution and others direct. “We have a unique sales model in the U.S. made up of manufacturer representatives and direct sales, which provides OEMs with the maximum amount of flexibility,” says Kevin Bischoping, vice president of sales at Endress+Hauser.
For OEMs needing to quickly purchase relatively simple instruments, Endress+Hauser recommends going direct. “E-direct provides OEMs with a quick, effective way to purchase entry-level instrumentation. OEMs can order 24/365, and products are attractively priced with tiered quantity discounts,” adds Bischoping.
As Bischoping relates, the direct sales model allows suppliers to offer lower prices and round-the-clock availability. Another characteristic of online purchases is complete control by the buyer over just what’s purchased.
But when buying complex products like multi-parameter smart instruments or analyzers, assistance may be required, and distributors and local sales reps can provide it. “Our sales representatives are close to the market and thus familiar with OEM issues, allowing them to provide engineered solutions tailored to meet specific application needs,” notes Bischoping.
Distributors do provide concrete benefits for some, but direct purchasing is better for others. “The direct sales model offers the shortest path between the product and the customer, which means less markup along the way,” states Gary Marchuk, the business development manager at AutomationDirect.
AutomationDirect passes these savings on to OEMs and other customers in the form of lower prices, free shipping and free technical support. AutomationDirect touts its low prices, and it’s easy enough to compare their prices to other similar automation components, as they often offer tables and charts doing just that on their web site and in ads. They also offer free two-day shipping on most orders.
AutomationDirect also offers free technical support via phone, which may or may not be more valuable to you than the support offered by a local distributor. On the one hand, phone support is usually quicker to access as a supplier can staff support lines with many tech support experts, while a local distributor will have fewer support staff and they will generally be less available. On the other hand, if your local distributor has the right support person familiar with your needs and he or she is consistently available, this can be the way to go.
This blog post is based on the Distribution Versus Direct: How to Decide Where to Buy Automation System Components column which was posted online March 2015 and will run in the May 2015 print edition of Control Design magazine.