PUE Refrigerators: Product and supplier selection
Summary
Before your last mile distribution company pilots sales of PUE (productive use of energy) refrigerators, you’ll need to research different products and suppliers. Here we give an overview of what research is needed, how to test a product order, plus things to think about when agreeing terms with a supplier.
Prioritise reliable products and suppliers
After validating the demand for refrigeration, the next important step is to find a manufacturer with a relevant offering.
Priority should be given to reliable refrigerators that minimise the risk of frequent breakdowns and maintenance issues, as these become prohibitive after-sales expenses for LMDs.
Besides asking other LMDs for peer reviews, the Verasol product database provides a great starting point to compare different brands and models. It lists more than 100 units that have been quality verified by independent testing institutions.
As an additional metric to the Verasol database, Efficiency for Access suggests considering how easy the product is to repair. LMDs should, for example, consider whether the supplier can make spare parts available, even at small quantities.
A key advance in refrigeration technology for LMDs to keep an eye on is the use of thermal energy storage. This will reduce the need for electrical batteries, lowering the cost of solar systems to operate a refrigerator, while making the system more durable and resilient.
Challenges faced by smaller LMDs
Building strong ongoing relationships with manufacturers is essential to ensure smooth collaboration when piloting refrigeration sales.
Establishing these relationships involves working with manufacturers who are open to feedback and responsive to suggestions for product design and performance improvements.
POPO in Uganda learned that such manufacturers are valuable partners because they can adapt their products to better meet the specific needs and challenges of the target communities.
Some manufacturers might even be willing to customise their product design if an LMD buys larger quantities.
Smaller LMDs (in terms of revenue) often face more barriers when it comes to accessing products. Specific challenges include unfavourable payment terms and having to pay more to order smaller quantities. LMDs invest significant time in vetting suppliers and building strong partnerships (GDC and Solar Sisters, 2022).
Procuring from a supplier in the same country can be an advantage to building the relationship. However, LMDs such as Sosai in Nigeria, have chosen to only work with manufacturers that do not have a distribution presence in Nigeria. This is to avoid their suppliers becoming future competitors.
Make a first order to test and compare
Once LMDs have conducted rigorous desk research on potential manufacturers, they can compile a shortlist that can be reviewed through further consultation.
One could, for example, ask other LMDs about their experience of working with the supplier. Furthermore, sales managers could take a picture of the product to their sales agents and customers and ask for feedback on the design specifications, such as product dimensions and, for solar power fridges, the guaranteed cooling time during cloudy days.
Manufacturers often sell fridges at different sizes. Choosing the right size is important to ensure it has sufficient capacity for retailers to store the amount of beverages they expect to sell.
When LMDs have assessed the product’s compatibility with their customers needs, it is time to order a few units to assess the quality and performance of the refrigeration units and identify potential issues before committing to a large purchase.
Agree on supplier terms and conditions
To build a mutually beneficial relationships, LMDs and manufacturers should make clear terms of agreement.
Agree on terms of communication
Clear communication, reliability and responsiveness are critical during the piloting stage because LMDs may need to make quick adjustments based on feedback and performance data.
Agree on warranty terms
Both LMDs and the manufacturer should be aligned on the responsibilities for product repairs and replacements. This minimises disputes and ensures that any product defects are addressed quickly and costs are reduced.
Establish clear terms for logistics and order management
This should include minimum and maximum order quantities, delivery schedules, shipping responsibilities, insurances, and how to handle delays or damaged goods costs.
Keep reading
Read more about selling PUE refrigerators:
- Consumer demand and value proposition
- Sales and marketing
- Consumer finance
- Stock financing
- Logistics
- After-sales support
Read our full publication
Want to learn more? The above articles have been taken from our downloadable publication: How to Sell Refrigerators for Productive Use.
Photo credits
Top graphic: Contains the following edited images: photo of a man by wavebreakmedia-micro on Freepik; fridge photo by muhammad.abdullah on Freepik; and chicken icon by Freepik
First photo: Image by Drazen Zigic on Freepik