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It's still very confusing that those brands don't take a larger share. If I'm not mistaken, the ductless market, even in the US, is growing rapidly. Why don't they enter the central air conditioning unit market as well? Is it just because the OEMs control the distribution that heavily, or is there another reason?

Yes, you nailed it. I've had several consulting calls where this topic has come up, and I can't recall if I mentioned this when we met on the 20th, but the US market is really driven by distributors who support the contractor and installer networks. The distributor market is extremely robust and very traditional, with some distributors we've partnered with having been in place for 30, 40, 50, 60 years. To break into the US market, one must penetrate this distributor network. The biggest challenge is that the distributor network has strong ties and partnerships with the OEMs they work with. For example, Carrier distributors are known to be a tight-knit group and have been working with Carrier for a long time.

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You mentioned you have worked not only with Watsco but also with larger distributors like Ferguson Supply and others. Could you highlight any notable differences, such as strengths or weaknesses, that other distributors have that could be emphasized?

I'm not sure I have a great answer for you. Distributors tend to perform similarly based on size, especially in areas like demand planning, inventory, and other supply chain-related aspects. For example, Ferguson, due to their size, and companies like Winsupply and Watsco, along with others such as Johnstone and United Refrigeration, tend to perform better. Larger customers obviously have more capital, more space, and more locations, which simplifies supply chain and demand planning for them. They are generally driven by the process of ensuring they have inventory locally when and where they need it. They might even be a bit over-inventoried to ensure product availability.

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