The HVAC industry relies on the weather more than most consumers may realize. When the weather is at either end of extreme \u2013 whether it be a blazing summer or a bitter winter \u2013 demand for HVAC units and supplies goes way up. This leads to intense competition during the high-demand months as HVAC suppliers fight for a limited market share, while sales during the milder months \u2013 the dreaded \u201cslow season\u201d \u2013 typically lag behind.<\/p>\n\n\n\n
Growth during busy seasons can take HVAC suppliers far, but with declining sales across the board, most are quick to seek more reliable ways of securing revenue year-round. To mitigate the industry\u2019s seasonality, many suppliers offer incentive programs and other deals during the seasons of spring and fall. As seasons shift and demand rises once again, many promotions come to an end, but they can be a vital technique for boosting margins and sales even during the slowest months of the year.<\/p>\n\n\n\n
If you aren\u2019t already using supplier rebate programs, you may be wondering where to start. Today, we\u2019ll be starting at the beginning: what are supplier rebates, and how are they used to promote growth in the HVAC industry?<\/p>\n\n\n\n
Supplier rebates are incentive programs used by suppliers or manufacturers in the HVAC industry to reward their channel partners \u2013 typically distributors and retailers \u2013 for hitting specific purchasing targets. Rebates come in many shapes and sizes, each with its own unique purpose, but the most common involves rewarding distributors with a portion of their money back for purchasing specific volumes or ratios of products.<\/p>\n\n\n\n
Rebates differ from coupons, discounts and other incentives in a few key characteristics. With rebates, it is only after a purchase is made at full price that customers can claim a percentage of their purchase price back. Rebates also avoid many of the negative associations of price cuts, with the price up front remaining unchanged.<\/p>\n\n\n\n
HVAC suppliers employ rebate programs to aid in accomplishing any number of goals, from increasing profit margins, building stronger strategic relationships, boost certain product ranges or SKUs.<\/p>\n\n\n\n
Imagine that you\u2019re an HVAC supplier looking to increase sales of a certain type of filter. To accomplish this goal, you can create a tiered rebate program offering distributors a $1 rebate for any purchase over 10,000 units and a $2.50 rebate for any purchase 20,000 units, with the rate increasing at each successive tier.<\/p>\n\n\n\n
Here\u2019s another example: perhaps your high-margin fan blades are slow to sell, but your low-margin coils are flying off the shelves. To give your fan blades a boost, you can create a mix incentive program wherein distributors earn a rebate for purchasing specific mixes of fan blades and coils, usually at a preset volume or ratio. This gives distributors a better deal on the products they\u2019re already buying and those they may be buying elsewhere.<\/p>\n\n\n\n
The R.E. Michel Company, LLC is one of the USA\u2019s leading distributors of HVACR supplies, with more than 270 locations across the nation.<\/p>\n\n\n\n
As they took on more rebates, the company found themselves attempting to manage hundreds of deals with hundreds of suppliers manually, with most information stored in spreadsheets. When spreadsheets became unfeasible, they switched to custom Access databases, but still found themselves struggling to track and share their rebate data, ensure the accuracy of their payments and identify opportunities to maximize rebate earnings.<\/p>\n\n\n\n
After employing Enable\u2019s automated rebate management platform, they were able to scale back their hiring needs and free up a significant amount of time to return to their core tasks. The intuitive, easy-to-use system meant that R.E. Michel was no longer reliant on \u201crebate gatekeepers\u201d to run accurate reports, allowing the team to start managing their deals with minimal training.<\/p>\n\n\n\n