@ThereAbouts ,
Thanks for the anecdote.
I've come across a number of similar points of reference in relation to Reece.
Initially (many years ago) I couldn't quite understand the loyalty of Reece's trade customers, given that Reece is by no means cheaper than its competitors. I thought that this is a business of mere plumbing commodities; one lot of PVC pipe sitting on Reece's shelves is exactly the same as another lot sitting on the shelves of Reece's competitors, so surely it will make zero difference where plumbers shop for their materials.
But then one day the penny dropped for me because of something that was said by a plumber - who was a die-hard Reece client -I was speaking to.
When I asked him why he always got his supplies from Reece despite them being more expensive, the ensuing dialogue went something along the lines of:
Plumber: "Why do I care what Reece charge? It is the client who pays for that."
Me: "But what about a competing plumber getting the work by quoting a cheaper price because that other plumber is sourcing cheaper materials at one of Reece's competitors?"
Plumber: "Yeah, nah, mate. That doesn't happen. Because, firstly, only 15% to 20% of the value of a plumbing job is in the materials and supplies; most of the cost by far is labour. So whether or not we can get valves or PVC pipes for 10% or 15% less doesn't make any real difference. Especially when I know that when I go to Reece they always have what I need in stock and if I place my order then day before, then they have all my stuff ready for me, including invoice, the next morning. Sometimes in the morning I drop my apprentice outside my Reece store, and by the time I return from doing a U-turn at the traffic circle 300m down the road, he is already coming back out the front door with all the kit in a bag. If I am doing a job in an area where there is no Reece, then I know that I must ratchet up my quote because I know that if I pop into the local Tradelink, I'm going to be stuck there for half an hour to 40 minutes while they dick around getting up and down stepladders to see if what I am after is lying somewhere in a box on one of their disorganised and chaotic shelves. And then often when they do manage to locate what I am after, it will be the wrong thing, or their system won't have a price for it, or the price in the system will be completely wrong.
With Reece, if their system says that have it in stock, they definitely do, they know exactly where in the store it is located, and the computer always has the right price, which is reflected 100% accurately in my monthly account statement. "
That's when it occurred to me that what Reece is selling is not really pipes or valves or spigots; rather what it is selling is what I like to call "dead time minimisation", in other words, by providing an efficient service, Reece is maximising the plumber's time actually doing plumbing work, as opposed to waiting in a store.
And at one stage, some years ago, I thought that the end-user (i.e., the homeowner or the builder) is subsidising the plumber by having to pay for fully-priced plumbing materials and supplies. But over time, I have come to realise that this is not the case, because the costs of a plumbing job is not really a function of the cost of the plumbing materials used, because the "more expensive" materials (i.e., ex Reece) are usually accompanied by lower time allocation... the "Reece Efficiency Dividend" in action, if you like.
And that efficiency dividend is split between the plumber (more on-the-job "uptime"), the plumber's client (faster job completion at no higher cost), and Reece (the ability to be the industry price leader).
(20min delay)
