Online Retailers vs. Local Distribution Part 1

This is the first in a three-part series from HESCO's Director of Strategic Initiatives, Chad DePasquale, that demystifies misconceptions about online retailers vs. local distribution.

Online Retailers vs. Local Distribution: Misconceptions Demystified, Part 1

(Or, How to Save 61% by Switching to HESCO!)

Misconception #1 – Big Online Retailers are ALWAYS less than local companies.

By Chad DePasquale, Director of Strategic Initiatives, HESCO

MSC, Grainger, Digi-Key, Mouser, Automation Direct, Galco, Allied, McMaster and others are predominantly online stores who sell some of the same products as HESCO. The traditional thinking is, we can SAVE money by ordering through them, but I am here to challenge that thinking.

webstore-1This way of thinking can probably be tracked back to Amazon’s meteoric rise in the online retail space. It’s a logical one too: such a big company ($817 billion as of writing this) must be able to throw its weight around with its vendors to procure their products at the lowest prices and pass those savings onto the consumer.  But … that is where you would be wrong.  Don’t believe me? It’s OK, no offense taken -- I thought the same thing too -- but take a minute to stop reading this article and bring up Amazon and Walmart side by side.

On Amazon’s site, search for “Tide Free & Gentle 150 Ounce” and you should see that big old white jug of Tide. Now, notice the price. Next, search for the description on the Walmart site and find the same product. What I’m seeing is an almost 50% savings if I order through Walmart compared to Amazon! Still think Amazon is always the less expensive retailer? This is just one example, and I used Walmart because they have an easy to navigate website and I find that when I compare Amazon prices to Walmart, more often than not Walmart is able to save me money with my household purchases. Next time you reflexively try to order something from Amazon, compare it to Walmart first (or their recent acquisition to compete with Amazon.com, Jet.com).

OK, now that I’ve stunted Amazon’s sales by having everyone price check on Walmart, let’s get back to the story. The narrative is that large online retailers can deliver the products at a much better price than the local store/distributor can. I have proven that false with the example above (even though we’re talking big chain vs. big chain) and would like to do the same with our direct competition, the online stores mentioned in the first paragraph. 

I went through our top 160 fastest moving products at HESCO and searched online to grab pricing from all the vendors I could. In the examples below, I displayed what the competition was selling for online and what our HESCO price would be. Savings ranged anywhere from 5% all the way to 61% by switching to HESCO for the same product!

Product # Vendor Competition Price
HESCO Price $avings with HESCO
AGC1R                     Bussmann $0.89/E From MSC $0.41/E From MSC $0.48 / 54%
AJT15                      MERSEN $21.04/E From MSC  $19.95/E $1.09 / 5%
A10P8                      Hoffman $15.91/E From Grainger $9.10/E  $6.81 / 43%
HBL5266C Hubbell $17.27/E From Grainger $13.27/E $4.00 / 23%
C1LG6                      Panduit $8.33/6’ From Digi-Key $6.30/E $2.03 / 24%
SDN1024100P Sola/HD $379.86/E From Mouser $341.94/E $34.91 / 9%
5332                        Thomas & Betts $7.65/E From MSC $2.96/E $4.69 / 61%

 

Save yourself some money the next time you’re about to order from Amazon, and check those prices elsewhere. And, save yourself some money next time you’re looking for electrical supplies by checking out our HESCO prices. We’re here to look out for your best interests, whether that's selecting the right solution or finding the best-priced product for your application.  Please think of us next time you’re about to submit that order online with the big retailer (did you know we now have a HESCO webstore???) and see if we can save you some money!

In the next article, I’ll piggyback off how the online retailers are able to offer free shipping to sweeten the deal -- but be aware that this may not be as sweet as you think.

Chad DePasquale, Director of Strategic Initiatives, HESCO

Email Chad