American Hometec realizes success in niche market

By Mary Jo Martin
Editorial director

A relative newcomer in a rather mature industry, American Hometec is defining its niche in the targeted on-demand water heating market. Its fascinating backstory only adds to the allure generated by the groundbreaking products.

Backed by a capital investment company based in Delaware, American Hometec was incorporated in 2006 by Shimin Luo, a Chinese American, who was a Ph D candidate in chemistry and holds an MBA from George Washington University. She was concerned with issues including lime-scale and the efficiency losses that all water heaters were experiencing, along with wanting to develop a company that not only offer environmentally responsible products, but also put an emphasis on green practices as well.
A pioneer in coilless technology, Luo’s goal was to invigorate the water heating category by designing units without the typical coils. Her breakthrough Coilless Technology® has multiple patents and patents pending.

After years of seeing proven results in Europe and China, American Hometec Inc. was founded to bring to North America the Coilless Technology that will meet U.S. market needs, and make water heating nearly maintenance free. Its sophisticated digital controls are designed to give users the enjoyment of a luxurious experience.

Between 2006-2009, much of Luo’s time was spent in research and development, ensuring that American Hometec’s products went through the proper certification procedures to meet and exceed U.S. standards. The company’s first product was officially launched to the public through U.S. distribution in 2009. Since that time, American Hometec has strategically staged launches of their whole line of Coilless Technology electric and H2O Saver Technology gas tankless water heaters.

Seizing opportunities

“Our factory partners are some of the largest in the world for tankless water heating,” said Dave Millilo, vice president-sales and marketing. “We have zero capacity issues when it comes to our manufacturing, which are certified to ISO 14001 and 9001.We’re also very environmentally responsible, using recycled materials in packaging and RoHS-compliant electric circuit boards. We have a paperless environment. Shimin’s philosophy of walk the walk on green practices in our daily operation really guides our practices. It costs more to produce responsibly, but we don’t reflect that in our pricing. We believe it’s just the right thing to do for the environment and we look into our own efficiency to keep the cost down to our customers.”

Larry Linkens, director of product technology, added, “The Department of Energy is really clamping down on wasteful energy and is taking a look at tankless water heating units. The future is really bright for point of use installation, which means that the units are to be installed in every hot water zone in the house. That’s a very efficient way of heating water because it doesn’t rely on pipes running throughout the home.”

The company’s sales efforts are managed by regional sales managers and handled in the field through a large and seasoned manufacturers’ rep network. “We have reps come to us asking to take on our line all the time,” Millilo noted. “We use all means of marketing and sales strategies to get our product where it needs to be. We are face-to-face every day with customers, and we ask them for their honest feedback so we can take that back and use it in our product development efforts. Often, I personally ask our customers what they like and what they do not like…that’s the best form of market insights.”

The public is becoming better-versed in tankless water heating, and American Hometec’s sales and marketing department are investing in educating the trade and the public while building their brand. “It’s all about communicating the benefits and cost savings,” explained Millilo. “We’ve also put a lot of effort into the exterior design of the units. American Hometec has hit the sweet spot with our fantastic technology and brushed chrome and piano black finish. Our units look like a piece of household electronics that blends in with the home.”

The newest generation

One of American Hometec’s latest product launches — the AHQ-T16 — really signals the direction in which the future of water heating industry is headed.

“We are growing every day and demand is increasing rapidly,” Millilo noted. “We unveiled the AHQ-T16 last year and it’s pretty darn cool. Before that, we were launching commercial low-flow sink products, and then residential units. But customers were saying they needed something that would handle a whole bathroom. The AHQ-T16 is a beautiful unit with brushed chrome, piano black finish, blue LED, and all the bells and whistles in our toolbox. It’s really the flagship of our electric line.

“It’s important in this economy to bring to the table realistic product that people want to talk about. Another product our customers asked for is the TB32, which we released last October. This unit can handle a whole house or a very large bathroom and replace a 50–gallon tank type water heater. It’s a wonderful piece of technology and innovation.”

The nuts and bolts

Coilless Technology® by American Hometec is changing the way water heaters work.

“The product development we’ve done at American Hometec is probably the most fun I’ve worked on during my career,” said Millilo. “With our design, the electric components are never in direct contact with the water being heated, preventing accumulation of lime scale inside the unit. Typically, traditional tank and conventional tankless water heaters immerse coils in water to directly heat the water, which causes heat spots. Over time scale can build up and may cause a decrease in heating efficiency and capacity.”
American Hometec’s products also use SmoothStart Technology™, which ramp up power smoothly so there is no sudden power surge. They are very gentle on a home’s infrastructure and electrical power quality.

The company has designed their products with a multi-in-one philosophy of use in mind.

“Our products are designed so that each is able to replace multiple SKUs of other water heaters,” Millilo noted. “For example, our TC10 replaces up to 25 competitive SKUs. It really benefits the whole value chain. And it makes it much easier for a contractor to just grab a couple of these units for their truck when they stop by their wholesaler’s counter. That is what wholesalers love — saving money by not having to stock as broad of an inventory.”

And contractors love the ease of installation. The units can be hung like a picture frame. Millilo emphasized that they are extremely easy to set up and program, thanks to the very simple interface.
“Educating our customers on the design, installation, application and other benefits of our products is very important to us,” Millilo explained. “We built an excellent education program and we travel to train anyone who needs us. We do authorizing programs with our reps so they can conduct training as well. We do it every day, every week and spend a good deal of our resources on these efforts.

“We also utilize our fantastic manufacturers’ rep network to help spread the story and train customers on the many features and benefits of American Hometec tankless water heaters. Our Florida-based rep, Engineered Concepts, is a great supporter and believer in the brand. Their eagerness to train, work ethic, innovative strategic thought process, and technically savvy field sales folks astounds us. Engineered Concepts is just one of many in our network that are amazing at what they do.”

One of the most frequently asked questions that Millilo gets has to do with electrical usag. “There is a perception in the market that electric tankless units pull a lot of power,” he said. “But you have to remember that these units are only using energy when a homeowner is using water. And, American Hometec electric tankless units are fully digitally controlled to deliver only the amount of energy needed regardless of higher capacity installed.”

Building trade partnerships

When asked what American Hometec is doing to further solidify its supply chain partnership with their wholesaler and contractor customers, Millilo cited a few specific efforts he and his team are making: “Contractors and distributors want three things — to continue to build the brand, create demand in their market and lots of training. We believe we have really stepped up to the plate on all of those areas. In addition, our after-sale service is going to really make us stand out. If they have a question or problem with one of our units, we respond immediately.

“When it comes to our wholesalers, we’re going to continue helping them build demand with their contractors. We want to help them reduce inventory cost with our Multi-in-One™ design. We believe that what we’re doing is truly changing the industry. That’s the cornerstone of our company.”

American Hometec has partnered with tremendous wholesalers that believe in the American Hometec brand.

“One of the most progressive and forward-thinking distributors has to be Hydrologic Distribution based in Pinnellas Park, Fla.,” said Millilo. “When we linked up with Chris Lynch and the boys at Hydrologic we knew it was the perfect match. When we sat down with them to deliver our technology story, they got it instantly. Hydrologic — like many other distributors we do business with — seems to just ‘get it.’ It is those partners we look for to help spread the American Hometec story and place our products in the contractors’ hands. The wholesalers that we are blessed to call partners get 110% support from us because we are getting the same amount of support and drive from them.”

Chris Lynch, who is president of Hydrologic Distribution, noted, “We want manufacturers with innovative products that offer new solutions to challenges our customers have in the field. American Hometec gave us new technology, unbeatable value and the capacity to cover a wide range of applications with just a few SKUs. It’s a home run for us.”

For additional information, visit www.americanhometec.com or call 877-NO-COILS.