Distributors dissect retailers’ equipment needs, trends

May 9, 2016 By    

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It seems only fitting that, in this LP Gas Buyers Guide issue, we focus here on a segment of the propane industry integral to the equipment needs of the retailer.

Certainly, the manufacturers listed throughout the opening pages of the Buyers Guide are invaluable. They not only make the equipment that moves, stores, delivers, controls, measures, monitors and ultimately – and most importantly – burns propane safely, but these companies make retail operations possible. They make a propane industry that has endured for more than 100 years possible.

But in the 600-plus words on this page, I want to bring attention to another segment of the industry that’s not always sexy – as one industry member put it – but one that supplies retailers with the needed equipment, when they need it, to keep their businesses running smoothly. This segment makes up another key portion of our Buyers Guide: equipment distributors.

The National Propane Gas Association lists about 40 distributors among its membership. These companies would seem to have a strong pulse on the industry, from the manufacturers they represent, to the type and amount of equipment they distribute, to knowing and understanding the needs of their customers – the propane retailers.

So I decided to reach out to a handful of distributors and inquire about the work they do and the latest information they have gleaned about the propane industry.

What did I learn?

  • Phone orders are still the go-to method for retailers to purchase equipment from distributors, but the online option is growing. In addition, distributors say having representatives in the field connecting with customers is important for information sharing and sales purposes.
  • Products that distributors sell routinely include cylinders, dispensers, fittings, flex risers, hearth lines, meters, plastic and copper tubing, pumps, regulators, tanks and tank monitors, tankless water heaters, valves, and various other repair parts and components.
  • For many distributors, business increases before the winter heating season kicks into gear – from August through December.
  • Retailers don’t stock equipment like they used to, distributors say. Instead, the trend is to keep overhead low and order as needed or for a particular job.
  • Another trend: Residential cylinder and tank valve orders have declined, one distributor says, because retailers are not doing the same amount of tank refurbishing and maintenance at their sites. Many retailers are sending their tanks to refurbishing companies, thus reducing the retailer’s need to buy replacement valves and parts, the distributor adds.
  • Another distributor has seen a decline in regulator sales, which it attributes to a longer lifespan of the equipment and retailers’ reuse of the equipment. The same distributor is also seeing a rally in new tank sales, which had been down for years due to retailers using refurbished tanks, it says.
  • One distributor recalled the days when retailers did a significant heating and hearth product installation business, but this activity has declined over the last decade. A segment of the industry has been emphasizing the need for retailers to return to the ways of promoting, selling and servicing propane-burning appliances.
  • Autogas is a high priority of distributor companies wanting to help retailers boost propane demand in a nontraditional market. So these companies are offering the needed equipment, such as autogas dispensers, hoses, nozzles, pumps and tanks. One distributor notes an opportunity for the industry to convert engines to propane autogas across a range of markets, especially with the improvement in today’s autogas conversion technology.
  • Speaking of technology, one distributor has seen a trend in propane retailers being more open to trying new technology and purchasing products from these providers. This distributor cited remote tank monitors as an example of a trending technology.

Distributors say having product on the shelf that’s easy to order and can ship in the same day, as well as those distributors that show versatility and a genuine willingness to help people, spell success in this industry.

Brian Richesson

About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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