Giving Exclusives To Integrators?

JH
John Honovich
Nov 24, 2016
IPVM

Every so often a manufacturer will give an exclusive in a certain region to an integrator. It can be good for the integrator who gets it but a pain to other integrators as most integrators don't want to have to buy from local competitors.

This came up today as Feenics did it but it is not unique; typically smaller companies trying to grow.

What do you think? Regional exclusives to integrators? Good idea? Bad idea? How to handle it?

JS
John Saunders
Nov 24, 2016
IPVMU Certified

From a consultant's perspective - as the rep for the Owner - I don't want an integrator to have a product pricing edge. I want them to demonstrate a quality and experience edge.

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JH
John Honovich
Nov 24, 2016
IPVM

John, good feedback.

The other thing is that if an integrator has an exclusive, he could block a rival from having access to a product. Moreover, some integrators will refuse to offer products if they have to buy it from a competitor because of the difficulty involved (the eclusive integrator could drag their feet, etc.) and having to disclose such information to a rival.

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Michael Silva
Nov 24, 2016
Silva Consultants

I generally won't specify or recommend a product unless it is available from at least three integrators in a given market area. I make an exception when the client has standardized on a proprietary product available only from a single source, or when working in very small markets where we have a limited selection of integrators.

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RR
Richard Ramsowr
Nov 25, 2016

If an integrator come to me with a project I will often favor him or her over others out of respect and in doing so will gain a long term advantage and a future alliance with a substantial local, regional, or even national integrator. It's all about trust and taking care of the integrator and vic-vera.

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JH
John Honovich
Nov 25, 2016
IPVM

I will often favor him or her over others out of respect

Richard, does that include giving that integrator an exclusive?

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RR
Richard Ramsowr
Nov 25, 2016

Exclusive's, no not really

Sorry about that John, Guess I'm starting to show some age after all...

By the way, trust you and yours had a safe and happy thanksgiving...

Rick

Houston / San Francisco

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David Coughlin
Nov 28, 2016
Protection One / ADT

Let's start with the definition of "exclusive." I'm guessing that it means only one integrator in a given market has access to a product. It can also mean access to a discount level that is "exclusive" to an integrator that helped move a manufacturer's product into a specification or end user.

Exclusives on products are counter-productive in many ways. First, there may be anti-trust issues under anti-monopoly laws. Also, end users should avoid products that are only available through one distribution point. The security industry typically doesn't see this but, it exists in the fire and controls industries.

That noted, "open" product distribution puts end users at the mercy of a very large electrical pool with little to no quality control. If a manufacturer has more than 4 existing integrators in a geographic territory, it's very unlikely that I'll invest in training technicians, sales people, and stocking products.

As far as an exclusive to a discounting level, imho, manufacturers and/or distributors should be able to offer unique discounts IF there is value in exchange for that exclusive discount over the rest of the market. Otherwise, it's likely unfair trade restraint.

Best,

David Coughlin

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UM
Undisclosed Manufacturer #1
Nov 28, 2016

Feenics is lead by some former Lenel folks. Lenel, among others, used this model to great success. To Mike's point, yes you need to have more than 1 choice in a given market so that an end-user isn't forced to use the one and only integrator in their city, however, limiting your integrators to 3-5 (or whatever you deem an appropriate number) in an "NFL city" drives loyalty from the integrator side and can help to insure your brand is represented competently. Those integrators will be more likely to invest in training. It also helps all avoid margin erosion.

Opening up a new line to just anyone risks untrained or undertrained technicians installing the line poorly and giving the brand a bad reputation. This does not serve the end-users buying the product, the manufacturer, or the integrators who have invested in training their staff on the product line.

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