To better understand the sales, we need to identify the various channels in the HVAC distribution process. The manufacturer sells the equipment to a wholesaler distributor who in turns sells to a local contractor who will then sell the equipment to the end user or homeowner. We will be focusing on both the sales from the distributor to local contractor and then to the end user.
Once we could determine what the wholesale volume was, we could make some accurate guesses as to the retail sales. We decided to check with one of our local distributors for guidance. He reported that their greater Orlando locations had sales of roughly $30 million last year. He was also able to provide some additional insight that they have roughly 25% market share. With that information we were able to determine that the wholesale revenue for HVAC in Orlando is roughly $120 million annually.
To determine retail sales, we simply use averages for air conditioning contractors in the United States. While the percentage of cost of materials to revenue is higher and lower for some companies depending on a number of factors whether they are new construction, replacement or a combination, an average is 30%. In other words, the $120 million in wholesale purchases would be roughly 30% of the retail market. That would yield a total of $400 million in retail sales and a combined (wholesale and retail) $520 million market.
We hope you've found this entry regarding the Orlando air conditioning market insightful. If you are interested in saving money and making sure you contribute as little to the nearly half a billion dollar market as possible, contact the HVAC experts at Melco HVAC Services of Orlando today.