Solar Power

The hows and whys of establishing solar distributor relationships

Mary Shaffer Gill, Director of Marketing, CivicSolar

By: Mary Shaffer Gill, Director of Marketing, CivicSolar

Distributors provide efficiency for solar contractors by serving as a single point of contact for accessing modules, racking, inverters, balance of systems and most—if not all—ancillary services necessary to install solar. As a result of their strategic market position between supply and demand, distributors gain knowledge they can pass onto solar contractors to guide their regular business operations and long-term strategic decisions. By establishing a partnership with solar distributors, contractors gain an extension to their team and access to tools and knowledge needed for achieving a competitive advantage.

How distributors can help
Distributors help solar contractors grow their businesses by acting as the fully-managed warehouse for contractors who deliver equipment on-site and job-to-job. Distributors also provide technical guidance on product innovations, design support and permit preparation. In addition, they serve as the top of the sales funnel for solar installers by notifying them of project opportunities and/or providing referrals. Solar contractors also look to distributors as the extension of their market research team, keeping an eye on changes in technology, policy and market forces that could impact their business.

As the partnership grows, both entities can reduce risk, increase sales and profitability and continue to approach the market with confidence.

Choosing a distribution partner
Establishing a contractor-distributor relationship can occur in many ways. Distributors are actively looking for new customers to support, while solar contractors are continuously working to improve their businesses. Whether the conversation begins with a distributor’s prospecting efforts or a solar contractor’s online research, solar contractors should complete their due diligence before entering a relationship with a distributor.

As with any relationship, transparency is key for success. Similar to instilling confidence in the home and business owners they serve, contractors should have coinciding expectations for their distributions partners. A quality distributor will have a proven-track record, a commitment to set and fulfill accurate expectations and the ability to deliver quality equipment and services. Each aspect cannot stand on its own and is equally as important when choosing partners.

As a solar contractor pursuing a partnership with a distributor, one should have a good understanding of what they consider valuable and important for their business. Preparing a list of pain points, important value adds and business-driven questions before an introductory conversation will ensure everyone’s needs are met.

For example, does the distributor assist with design and engineering? This could make a huge impact on the contractor’s business if in-house technical expertise needs additional support. At a higher level: What would the distributor consider to be its strengths and weaknesses? How long has it been in business? How many installers has it supported? These exploratory questions will foster a productive conversation and ultimately a transparent, value-driven partnership.

This is the time for contractors to share candid thoughts on how a distributor can add value to their business and set expectations.

Preparing important documents
When a contractor is considering a partnership with a distributor, they should also begin preparing documents that showcase their company. This includes basic business information such as:

  • Licenses and certificates (contractor’s, business, resale, etc.)
  • Financials to ensure eligibility for authorized dealer programs and lines of credit offered by the distributor (P&L statements, tax returns, etc.)
  • Current lenders and credit references
  • Volume installed and project/customer references to support said work

The distributor may also request other information to better understand the contractor’s experience and product preferences.

As with any business partnership, one between a solar contractor and distributor should be mutually beneficial. Contractors should be offered more certainty and consistency with every transaction, while enjoying the support and positivity such a relationship can award.

 

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