Customer Relationship vs. Commodity Broker
Aquatherm offers the plumbing industry a completly different approach. Our products are primarily based on polypropylene. This high grade plastic is a by-product of the petroleum industry that needs to be put to good use. Therefore its pricing is relatively stable. Aquatherm has optimized its production practices to allow it to manufacture high performance piping systems at consistent and competitive prices. We have held pricing constant over the past three years, while commodities have swung wildly. This offers us an opportunity to dramatically transform the piping industry from low margin commodity quoting to a high margin service industry. We offer our products through limited distribution and at very competitive prices. The goal is to offer significant cost savings to the end user and to build a network of loyal Aquatherm advocates who know they can bid a job months ahead and count on getting a stable, reasonable price. The direction is to be able to have owners and engineers flat spec Aquatherm knowing they will not be gouged. By doing this we are confident that a vast majority of contractors will switch to Aquatherm, and they will stay even if metal prices take a dip. Let the commodity brokers fret over metal prices. Let us focus on customer service and making our customers profitable. In the end, consistency and reliability will be better for distributor and customer alike. - Steve Clark, P.E., P. Eng. CEM |
Steel and copper have historically been basic components in plumbing systems. They are also used in a wide variety of other products. So although relatively plentiful on this planet, they are a valuable commodity that is very price driven by international supply and demand. This fact of life has forced plumbers and plumbing wholesalers to be more like commodity brokers than service providers. Business schools have taught us that to maximize profits we need to set the price just below the competition. The customer has been trained to buy from whoever can be a penny lower that day. This business strategy puts everyone on a pricing war roller coaster where margins are ridiculously low. Inventories are cut. Low quality products are substituted. Customer loyalty evaporates. Everyone suffers.