The hidden truth
Many perceived "commodity products" may be more specialized than you think
By Mark Sweeney -- Industrial Distribution, 9/1/2002
Oftentimes a product that is widely used in all types of industrial facilities is categorized as a commodity. In many cases, this is far from the truth.
Commodity products exist when numerous manufacturers make a product that could meet the same application criteria, or when a market for a specific product is large enough to support several suppliers. Although this results in price-leveling, which is an advantage, commodity products also are viewed as having no real features or benefits. When this occurs it's hard for distributors to enhance margin potential because the customer doesn't perceive any value-added features or benefits in the "commodity product."
Take, for example, cord connectors, which are used anywhere that cable or conduit connects to an enclosure or machine. Cord connectors tend to be viewed as a commodity because most industrial applications don't call for specific connector features and/or benefits. Therefore, customers and distributors alike perceive that all cord connectors are made the same way or can be used in all types of applications. The truth is quite different. Cord connectors can, and are, manufactured in a variety of ways due to different materials of construction, product options, and different customer requirements.
Cord connectors are hardware components that must meet or exceed customer requirements. Those needs will differ based on whether you're selling to an MRO or OEM customer. An MRO customer is primarily concerned with meeting minimum function requirements. While this is also true of the OEM, they have other needs that are equally, or perhaps even more, important. Cosmetic issues, product options, customization and volume are all critical factors to the OEM and should be discussed when helping them decide which connector best suits their needs.
Also, many perceived commodity items can be made for specific applications. For instance, there are six different materials used in manufacturing cord connectors, each suited to different operating environments:
- Diecast Zinc: primarily used in residential or commercial applications
- Aluminum: the most common material used in a wide variety of industrial applications
- Nylon: used most often in marine and high-moisture environments
- Steel: offers enhanced resistance to rust and better physical appearance
- Valox: provides superior corrosion-resistance for washdown applications
- Stainless steel: offers exceptional strength and the highest levels of durability for severely corrosive applications.
Another option is wire mesh attachments, which provide extra protection from cable pull-out. Connectors with wire mesh typically are used in industrial applications where vibration or flexing is a concern. Threading options such as NPT, PG or ISO/Metric are also important. And of course, there are some customers who will be better served by customized cord connectors. In these cases, the customer may be interested in design options such as multiple hole bushings, locknuts, O-rings, and various grommet materials.
Cord connectors, like other widely used industrial products, are not commodities. Customers have numerous product options that will allow them to specify the connector that best suits their specific application. Distributors also have options. They can choose to align themselves with the manufacturer that best meets the needs of their customers. After all, one size does not fit all.
| Author Information |
| Mark Sweeney is vice president, sales and marketing, for Remke Industries Inc., Wheeling, Ill. He can be reached at msweeney@remke.com. |
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