Each year, The MHEDA Journal interviews a random group of distributors across North America to find out expectations for the upcoming year. 2007 is shaping up to be a year of measured growth for many in the material handling industry, as 73% of those interviewed predict a sales increase by an average of 11%. However, the numbers vary significantly across product lines. For example, over 90% of storage & handling distributors anticipate sales to be up, but only 40% of those with diversified product lines do.

The same is true for geographic regions. Not one distributor forecasts a down year across the country, except in the Northeast, where 22% of those interviewed believe they will see a downturn.

Reasons for distributors' generally optimistic outlook include new product releases from manufacturers, enhanced Internet presences, expanded sales forces and renewed focus on training young employees, among others. Of course, distributors will also face a host of challenges, most notably the continued struggle to attract qualified technicians and the high cost of raw materials and insurance.

Succeeding in business despite these obstacles requires knowledge, creativity and experience. MHEDA Distributors have these qualities in spades. It may not be easy to forge success in the year ahead, but MHEDA Distributors are artists. Listen to their plans to achieve greatness in 2007.

2006 Improvements to Pay Off for ENGINEERED SYSTEMS Distributors
Engineered systems distributors expect the highest average increase of any product segment. Among the 77% of ES distributors forecasting an increase, the average anticipated gain is over 14%. Consequently, these members are planning to build on past improvements, such as new facilities, larger sales forces and advanced training programs.

“We must execute in all areas of our business to keep the momentum going throughout the year and into 2008.” Jim Bowes President Peach State Integrated Technologies (Norcross, GA)   “It is essential that we find talented people to whom we can pass on our knowledge base.” Paul Wanous President Skarnes, Inc. (Plymouth, MN)   “We have several next-generation leaders on our staff and are working to develop them into managers.” Chris Shult President Babush Material Handling Systems (Sussex, WI)   “It's coming so fast that our sales will only be limited by our ability to process the orders.” Tom Wells President Wells Equipment Company (Ellensburg, WA)   “We must continue to implement new technologies and incentives without adding overhead.” Mike Nemechek, President IBT Inc. (Merriam, KS)   “Our biggest challenge is time management and verifying where to allocate our time and effort.” John Williams President ConveyorMan (Memphis, TN)   “One of our biggest strengths is the ability to listen to the customer rather than chasing them for sales.” Bob Iwrey President McNichols Conveyor Company (Southfield, MI)   “Posting jobs on our Web site has been a good means of attracting personnel.” Robert Weeks President FloStor Engineering (Hayward, CA)   “Finding personnel is difficult because a lot of good talent is attracted to industries perceived to be sexier than material handling.” Steven Strifler President Cisco-Eagle (Dallas, TX)

An overall sales rise of 3-4% at Norpak Handling Limited (Port Hope, ON, Canada) may be bolstered by some high-dollar jobs. “We divide our business into day-to-day sales and premium jobs,” says President Stewart Raynor. “With the volume of sales we do, a $5 million job could double our sales volume.” Such a situation would require the company to hire more project managers and site supervisors. Raynor says the focus for 2007 will be on training. “Maintaining our knowledge of the equipment and systems that are available around the world that may interest our customers is a challenge,” he says. Raynor will be attending multiple trade shows to keep himself up to speed.

Chris Shult, president of Babush Material Handling Systems (Sussex, WI), foresees 10% sales growth. “We added salespeople in 2006. As they have more time in their territories, their sales will increase,” he explains. The addition of more salespeople may occur as sales volume continues to elevate.

The same 10% is forecasted by Ian Brown, president of St. Cyr Conveyors (Lucedale, MS). “We will be adding another salesperson to be able to have more feet out on the street,” Brown says. Finding that person won't be easy, so Brown will perform lengthy interviews to make sure he finds the right person. He also will instruct his salespeople to focus more on person-to-person contact with less reliance on telephone and e-mails.

Peach State Integrated Technologies (Norcross, GA) will experience a slight sales increase of less than 5%, says President Jim Bowes. “It seems like there's a lot of activity out there and a very strong pipeline of projects. We're going to do our usual blocking and tackling to execute our plans.” Bowes will add support personnel and keep his team focused on their individual and departmental goals.

“Any growth we see will be artificial because it is due solely to inflation,” says Paul Wanous, president of Skarnes Inc. (Plymouth, MN). Wanous predicts actual sales levels to be flat. To counteract this, Skarnes will introduce a parts and service department to handle service work that it previously outsourced. “There seems to be a niche there, so we will start with an inside person developing parts business over the phone and look to add a service technician as we get more business,” Wanous says.

Level sales are also predicted by Service Storage International (Willoughby, OH) President Craig Budreo, who is worried about the local economy in northeast Ohio. Budreo's sales staff will be extending its sales territory to attract business. Also, the company will focus on more high-tech systems and increase its sales of used equipment to try to overcome overseas competition. “Trying to maintain pricing is difficult because of the instability of steel and rack prices. That will be a big challenge next year.”

One of the most optimistic forecasts comes from Jim Green, president of Morrison Company (Willoughby, OH), who expects 20-25% more sales in 2007. “Our clients are making decisions where they seemed to be hesitant before,” Green notes. “We see an awful lot of business from companies in the apparel industry.” Such growth means Green will need to hire project managers. “To complete all the tasks on the line, we need to look at our returns and be more aware of customer service.”

Tom Wells, president of Wells Equipment Company (Ellensburg, WA), will take a different tack. “I don't really solicit service work,” he says. “My primary focus is equipment sales.” Wells believes the company may go over $2 million in sales, a 50% increase, based on the policy that the customer is always right. “If they buy something and aren't happy with it, I give them a full refund with no restocking charge. I put their needs ahead of my own.”

IBT Inc. (Merriam, KS) has a busy year ahead. “I've been working on new budgeting and support processes for the organization,” says President Mike Nemechek. IBT has several lines of business, and Nemechek says, “Within the realm of material handling, we're focusing on markets such as mining, power plants and heavyweight belt industries as targets.” Nemechek hopes these strategies will lead to 10% growth. “The principal driver here has been our integrated services group, where we help companies streamline their maintenance, repair and operations processes. That has helped us with national contract business that we have been ineffective with in the past. We go in and become partners at the corporate level to begin integrating these larger national companies.”

John Williams, president of ConveyorMan (Memphis, TN), expects “fairly healthy growth” of 15-20%. He believes the mid-term elections will spur changes in the overall business climate and lead to more stability in the economy. “People are getting more acclimated to issues and challenges and learning to deal with them. The reluctance that has been there since 9/11 will fade.” Williams hopes to add people in sales, engineering and administrative positions and will spend some time developing those individuals.

At McNichols Conveyor Company (Southfield, MI), President Bob Iwrey predicts level sales. “Our base is primarily automotive and automotive supply. I see some softening in the domestic auto market,” Iwrey says. The company will evaluate its product mix and look to enhance its relationships with its top suppliers, while also seeking new products to complement its current niche. Customer feedback will remain a critical element as well. “Our customers tell us how they want to be serviced. It's important to listen to the customer rather than chase them.”

Another person who is focused on customer satisfaction is Robert Weeks, president of FloStor Engineering (Hayward, CA). “We don't want to just finish a job and be on our way,” Weeks says. “We want to work with people for a long time.” Those long-term relationships generate referrals, and Weeks sees many larger projects on the horizon. That, coupled with an expanded national presence, will lead to 15% growth. “When the electronics assembly business in our area suddenly moved to Asia about five years ago, we expanded to Nashville to go after business on a national scale. That office represents 50 percent of our business already and should continue to grow.” Weeks will tackle that growth by hiring employees in sales, engineering and project management.

Sales growth of 5-7% is the forecast from Steven Strifler, president, Cisco-Eagle (Dallas, TX). The company added a branch in San Antonio and started a controls group during the last part of 2006. “It will take a little bit to get each of those ramped up but those will give us growth in 2007,” Strifler notes. He also plans to add at least 10 employees in field operations, service technicians and salespeople, as well as one or two in the Web business.

Recruiting Issues Will Not Stall INDUSTRIAL TRUCKS
Among distributors of industrial trucks, 75% believe 2007 sales will be ahead of those in 2006. The average rise will be 10% for reasons ranging from areas of local economic growth and concentration on employee safety. Finding quality technicians remains problematic, and IT distributors are ramping up their recruiting efforts in response.

“We've hired a major account planner to deal exclusively with our large, core customers.” Mark Maechling President Cal-Lift (City of Commerce, CA)   “Our business has expanded tremendously during the last few years. We expect that to continue.” Jeff Pennell President Pennell Forklift Service (Jacksonville, IL)   “We reimburse full tuition for pre-approved business courses for any employee.” Jeff Darling Vice President Washington Liftruck (Seattle, WA)   “Market volatility caused by the threat of terrorism is a concern for small business.” Bob Levin President Material Handling Supply (Brooklawn, NJ)   “We will evaluate every opening but make sure that we are sized properly.” Steve Raymond President Raymond Handling Concepts Corp. (Fremont, CA)   “Insurance costs that used to be of minor concern are now a major concern, but are beyond our control.” Kent Pierce President TEC Material Handling Corp. (Addison, IL)   “Brand diversity provides us with more alternatives to meet customers' needs.” Ted Springer President Springer Equipment Company (Birmingham, AL)   “We will concentrate on internal training and exposing young people to different departments.” John Hession President Vantage (Syracuse, NY)   “We need to increase efficiencies to reduce our internal costs due to shrinking margins from increased competition and more elaborate bidding processes such as reverse auctions.” Joe Sneyers Executive Vice President Raymond of New Jersey (Union, NJ)   “We are grooming our young managers for upper positions to give them a career path.” Gary Work President W.E. Johnson Equipment Company (Hialeah, FL)   “We must determine how to compensate and keep quality salespeople in a time of declining margins.” Richard Shaw President Shaw Material Handling Systems (Bartlett, TN)   “We need to create more sales-related programs and incentives to help continue our growth.” Rick Power President Power Machinery Center (Oxnard, CA)

More market focus and penetration will lead to a 15% increase in new equipment sales for Cal-Lift (City of Commerce, CA). President Mark Maechling believes a similar rise in parts, service and rentals will offset a decrease in used equipment. “We are getting our systems in order with long-term rentals, guaranteed maintenance and reduced inventory,” Maechling says. He would like to hire 10 new mechanics and five salespeople and train them to create value in every relationship. “We must stop chasing bad deals and focus on good business. When we unravel some of our unprofitable transactions, it's amazing what happens to the bottom line.”

“Dramatically up” is the forecast of Jeff Pennell, president of Pennell Forklift Service (Jacksonville, IL), who predicts the company will grow 20-25% in 2007 on top of 35% growth in 2006 and 60% in 2005. Pennell points to customer service as the biggest catalyst of that growth. “We give every customer my personal guarantee of their satisfaction,” Pennell says. “No matter what the problem, tell us about it and we will right that wrong.” Pennell will continue to expand his rental fleet, which will reach 200 units by the end of 2006. “The rental fleet really has helped fund our growth.” Pennell expects to add four positions in clerical, sales and technicians, and he is in the process of purchasing 25 acres of property with interstate frontage for a new facility.

General Manager Shilo Monney at Southern Field Maintenance (Victoria, TX) offers a similar outlook. Monney predicts that increased oilfield production will lead to 25% sales growth. “We're stocking more forklifts than we ever have, and we also added a new line of rough terrain forklifts.” A facility expansion, projected to be complete in June 2007, is underway that will double the office space and add two service bays. Monney says he would like to add two or three technicians, plus one more salesperson toward the end of the year.

Jerry Clark, general manager of Mesa Forklift Company (Grand Junction, CO), attributes his projected 15% rise in sales to a “microburst of local growth.” Clark will be looking to hire technicians, and has begun advertising and offering incentive programs, such as moving allowances, signing bonuses and benefits, to try to help recruiting for these positions.

Similar tactics have been tried at Washington Liftruck (Seattle, WA), whose vice president, Jeff Darling, has offered $2,500 sign-on bonuses to technicians and bounties for referrals from employees. “Our recruiting has gone outside our normal market area,” Darling says, adding that the company recently paid to relocate two experienced individuals from the Midwest. Darling also points to a program initiated with a local community college as a source for potential employees. In addition to expansions in the service department, Darling hopes to add two salespeople and thinks the increased coverage will lead to a 3-5% sales bump.

Recruiting technicians is also an issue for John Hession, president of Vantage (Syracuse, NY). The three-year-old company would like to increase its service staff by 20 percent to handle the expected 10% increase in sales. “I expect the industry to be flat overall, but we still have room to improve,” Hession says. Hession will participate in trade shows and focus on “differentiation by satisfaction,” making sure his customers are pleased and encouraged to spread the word about his company.

At Material Handling Supply (Brooklawn, NJ), President Bob Levin expects to experience a decline in sales of roughly 5% due to higher interest rates and a trickle-down effect from a slower housing market. To combat that, Levin will concentrate on better marketing within his area of primary responsibility through direct mail. “If there are going to be fewer people buying, we want to make sure we know about as many opportunities as possible,” he says. Levin will make sure the company takes a cost-conscious approach so it can withstand increasing operating costs such as health insurance and fuel.

Fremont, California-based Raymond Handling Concepts Corp. will experience the same or slightly lower sales due to the natural course of the business cycle. “We've had record years the last two years, and though 2007 should be a good year, I don't see it happening three years in a row,” says President Steve Raymond, adding that it's important that the company is prepared and does not outstrip its capabilities. “Success in business is largely a function of sales to headcount and making sure you don't expand your overhead beyond what you can support.”

Higher interest rates, corporate layoffs and the ensuing concern about the general economy lead President Hank Ogden at Ogden Forklifts (Atlanta, GA) to forecast level sales in 2007. Ogden would still like to add four salespeople and focus them on improving the relationship between employees and customers. “I will empower employees to be more in charge at every level,” Ogden explains. “Anybody can do anything to retain customers and solve their problems.”

Level sales are also the anticipation for Charley Crew, vice president of Hawthorne Lift Systems (San Diego, CA). Despite the flattening of the market, Crew recently opened a rental facility in Coachella that will expand into a full-service facility as time goes on. As new employees come on board, Crew makes sure they attend a two-day preliminary orientation to their job function before receiving additional product training.

Similarly, Gary Work, president, W. E. Johnson Equipment Company (Hialeah, FL), foresees flat sales. “2006 was robust in the first half and then slowed down, and I think 2007 will be the reverse,” he says. “The first half will be slow and then will pick up in the second half.” In order to overcome this, Work will present a revamped marketing strategy and partner up with vendors to become more value-conscious. “We want our suppliers to help us offer the right product at the right price to customers who were previously priced out of the market.”

VBS Inc. (Richmond, VA) will also focus on partnering, though of a different sort. Vice President/COO Bruce Grinnell says the company will do a better job of partnering with customers and training employees. “We've developed what we call 'productivity-in-motion' training that is senior-level training for employees. It's more than just forklift knowledge.” VBS will add two new locations—one satellite office and one new branch—in 2007. Grinnell expects “moderate growth in equipment sales and service,” and will hire service technicians, service coordinators and salespeople.

A sales rise of 6-8% is the expectation at Lift Truck Center (Wichita, KS). President Bill Bolin is optimistic about the economy and uses that as the basis for his forecast. “The economy is pretty good and we should be able to achieve moderate growth.” Bolin will add two mechanics in order to meet the challenge of providing excellent service to the customer.

“I think we should approach 2007 with caution, as far as adding overhead to the company,” says Joe Sneyers, executive vice president at Raymond of New Jersey (Union, NJ), pointing to rising interest rates and slowdown in the housing market. Sneyers is concerned about shrinking margins but believes sales will go up 2-4%. He will look to local advertising and job fairs to attract employees, primarily for the service department. “The problem with the Internet is it attracts people from far and wide, which is not realistic for us. We have a big enough labor pool to draw from locally.”

An influx of automotive plants and other diverse new business in the region is enough for Springer Equipment Company (Birmingham, AL) President Ted Springer to forecast a 10% sales elevation. Springer plans to move into a larger facility next door that the company had previously been renting out. As part of the expansion, Springer will hire five service technicians and one parts person. To control inflated insurance costs, Springer will focus his employees on safety. “We have awards that we give to people who go accident-free for long periods of time,” he says. “As a company, we must be diligent in our loss prevention.”

Safety is also a key issue at TEC Material Handling Corp. (Addison, IL). President Kent Pierce increased alertness among his employees to try improve the company's Workers' Compensation record. Pierce will rely on a more experienced sales force to generate more activity and produce 5-10% higher sales. “I think the industry will do a little bit better, and I also think our company specifically will do better,” says Pierce, who thinks that material handling's traditional lag behind the overall economy will provide momentum heading into '07. “Business spending should be up a point or two and we will be more active in the Hyundai line we took on last year.”

Paul Williams, owner of Williams Toyota Lift (East Sparta, OH), will move creation of more of his direct mailers and handout advertising in house. This move, combined with a larger number of more aggressive salespeople and the newly acquired Omega forklift line, causes Williams to forecast 10% growth. “Controlling overhead costs like insurance and utilities is diffcult. We are trying to find a way to overcome these fixed costs,” Williams says.

Strong aftermarket business will result in 5-6% sales increase at Shaw Material Handling Systems (Bartlett, TN), according to President Richard Shaw. “We have given our salespeople more sources to generate revenue through additional lines and special promotions for rental units,” Shaw says. He will continue with these and other service marketing programs. Depending on the effectiveness of that campaign, Shaw will hire technicians and people in customer service.

“We do a lot of our financing in-house, so we know when the leases expire and have better control of the renewals,” says Rick Power, president of Power Machinery Center (Oxnard, CA). Power thinks that renewing a high percentage of those leases, coupled with rising interest rates, will result in a sales escalation of 5-10%. Power also just hired a customer service sales representative, which should help the company achieve its growth goal.

The addition of remote technicians and better stocked service vans lead President Glenn Rayle to predict a 6-8% sales boost at his company, Western Carolina Forklift (Greensboro, NC). “We're doing a better job developing marketing tools and taking our product to market,” Rayle says. Western has created a database that will provide a more focused approach to targeting customers. “We are going to get away from relying exclusively on cold calls.”

Expanded Web Presence Will Lead to STORAGE & HANDLING Increases
Distributors of storage & handling equipment are the most optimistic of the four product segments, as more than 92% of distributors foresee a sales increase for 2007 by an average of 11.3%. Many of these distributors will be optimizing their Internet sites and overall Web presence. Primary reasons for optimism include more aggressive marketing and emphasis on other parts of the business.

“It's difficult to keep telling customers about surcharges from steel.” Mark Dragich President Gulf Atlantic Material Handling (Fort Myers, FL)   “We must continually come up with new ways to secure business.” Al Boston CEO A&K Equipment Company (Maple Grove, MN)   “We need to stay aligned on overhead costs, which have been a roller coaster for the last three or four years.” Daniel Compton Vice President Industrial Shelving Systems (St. Louis, MO)   “Our partnering leverage program where we divide our vendors into strategic or tactical partners has proven very effective.” Ken Shaw III President Fred Hill and Son Company (Philadelphia, PA)   “We must find replacement business for the downsizing, closing or moving auto-related suppliers in our area.” Greg Wait President Fredon Handling (Jackson, MI)   “I spend the majority of my time meeting customers and building relationships to move the company forward.” Lance Spernak President/CEO McKee Stewart Equipment Corp. (West Elizabeth, PA)   “Young people in the industry don't seem to be willing to take stepping stones, which makes hiring difficult.” Mark Goldstein Owner Coastal Equipment (Portland, ME)   “We are involving our young employees in planning and budgeting to give them more responsibility within the company.” Gregory Meyer President Meyer Material Handling Products (Indianapolis, IN)

At Gulf Atlantic Material Handling (Fort Myers, FL), President Mark Dragich anticipates a 5-10% elevation in sales due to economic factors in his area. “We're not in a heavy industrial region, so with housing rebounding and gas prices falling, people will start buying again,” Dragich says. As new buildings go up, Dragich will rely on his company's reputation to generate word-of-mouth advertising. The company is also upgrading its Web site and pushing online catalogs. “We've been successful with some textile business offshore and in South America and we will continue to push that.”

“We've expanded into more custom fabrication work because that is where the growth is,” says Mark Goldstein, owner of Coastal Equipment (Portland, ME). “Expanding our fabrication has been a major tool that leads to other business.” He also believes the Internet sales will become more popular, and he wants to put more emphasis on his Web presence. Coastal Equipment will bring more of its subcontracted labor back in-house. Goldstein predicts these three changes will help the company maintain level sales in 2007.

An expanded Internet presence will also be the strategy for Al Boston, CEO of A&K Equipment Company (Maple Grove, MN). Boston purchased and installed a new computer system that will help the company better organize internally. “We will have a more defined area for inside marketing and calling strategies,” he says. Boston will look to hire employees in inside sales and the warehouse, as he expects to experience a 10% increase in sales.

For Concept Storage Solutions (Vaughan, ON, Canada), 2006 was not a great year. But President Pete Roell sees a rebound in 2007 and looks for a 10% sales increase. “Here in the Toronto area, there is a lot of warehouse construction going on. Those warehouses are going to need racking from someone,” Roell says. He plans to upgrade his computer servers and workstations in the office, and will likely add a person in sales and one in installation. Roell says he has begun to import some pallet rack and mezzanines from offshore to decrease costs.

A similar 10% rise is in the offing for Industrial Shelving Systems (St. Louis, MO), says Vice President Daniel Compton. “We are outsourcing more of our labor and have thinned down in the warehouse. We've also ramped up in our office with another inside salesperson and are trying to keep our salespeople on the street.” Compton has already seen increased bookings for the coming year, though he is wary of overhead costs like utilities and health care.

“At least 15%” is the anticipated growth for Shelving & Rack Supply (Walled Lake, MI). President Mike Burskey says, “We're in a business where it's not totally dependent on customers coming to us. It's up to us to go out and get it.” Burskey has expanded his sales territory and added a salesperson, with hopes to add two or three more. “It's no secret that manufacturing in Michigan and its surrounding environs is not what it used to be, so we're finding a way to do it differently and diligently approaching new markets,” Burskey says. The company will add office space internally at its current facility and put in a mezzanine for more dense storage in its warehouse.

Lance Spernak, president/CEO of McKee Stewart Equipment Corp. (West Elizabeth, PA), sees an upturn in quoting activity that will lead to a 10-15% jump in sales for 2007. Spernak has done a lot of face-to-face marketing with customers since acquiring the company in 2003. “I knock on doors and drop off catalogs myself, and that seems to be well-received by end-users. They like to see the owner,” he says. Spernak says gaining market share will be difficult in his competitive market, but will try to overcome that with excellent service.

Fredon Handling (Jackson, MI) President Greg Wait agrees, pointing to increased online leads and manufacturer referrals that should lead to a 10-15% sales escalation. “We get a significant number of leads online. It's more and more a way that people are doing business,” he explains. “They may not buy online, but they are doing their initial inquiries online.”

Online strategy will also play a role at Fred Hill and Son Company (Philadelphia, PA). President Ken Shaw III has contracted a design company to overhaul the look of the site and expects that will help increase sales by 10-15%. The biggest contributor, though, will be a more focused approach to expanding the engineered systems side of the company. “There will be more strategic emphasis on educating our customers about our capabilities. We've had organizational meetings and put together printed materials, PowerPoint presentations, case histories and customer testimonials to try to make that happen,” Shaw says.

Greg Meyer, president, Meyer Material Handling Products (Indianapolis, IN), expects a 10% sales rise caused by the backlog of orders he sees from major customers. Meyer will handle the higher workload with a new salesperson and the addition of one or two customer service support positions. Like many of his storage & handling counterparts, Meyer also is redesigning the company's Web site. “We contracted a Web designer, whose resulting site has gotten much more traffic and inquiries. We think the new Web site will draw in quite a bit more traffic in 2007,” Meyer says.

The same is true for Kirk Kramer, president of Shelf Master (Anaheim, CA), who is investing more money into his Web site. “We get a lot of leads from our Internet site, so we're going to try to get even more people to find us,” Kramer says. He will be doing more mailed advertising and looking to expand beyond the industrial sector. Kramer also hired a management consulting firm to analyze the company in 2005, and some of the changes made are now starting to pay off. The combination should result in a 5% sales gain for Shelf Master.

One of the most optimistic forecasts comes from Chuck Vinton, president of Superior Equipment Corporation (Fort Lauderdale, FL), who predicts a 20% sales rise. “We are very close to the Port of Miami, and all the goods that come in need to be stored. There is a lot of warehouse activity here.” Vinton will, for the first time in 2007, pay commissions to two salespeople, a move he hopes will result in a reasonable return on investment. “As we get bigger and serve a more diverse customer base, we must have the cash to support that,” Vinton says. “We are diligently meeting our customers' concerns and addressing them as quickly as possible.”

Sales Are on the Level for DIVERSE MIX Companies
Distributors with diversified product lines are not forecasting 2007 to be as robust as other distributors. Only 40% of these distributors are expecting increases. However, those who are expecting increases are looking toward average growth of 11% over 2006. Half of the diversified companies predict sales to be the same.

“I don't want to be blindsided by management transition, so we are developing a succession plan to move forward.” Daniel Senecal President Werres Corporation (Frederick, MD)   “We will face challenges from both national and offshore competition, especially on new equipment.” Jay Terry President Allstate Equipment Company (Chesapeake, VA)   “We educate our customers on the quality of each product and let them decide how much to spend.” Brian Pevlin General Manager Aims Ltd. (Mount Pearl, NL, Canada)   “Do not be afraid to promote quickly. The people you have may prove to be better than what you find outside.” Buddy Smith CEO Carolina Material Handling Services (Columbia, SC)   “We hire the most qualified candidate. Age is not a factor for us.” Bob Stoffel Jr. President Stoffel Equipment Company (Milwaukee, WI)   “Some manufacturers have no problem selling direct. Distributors must diversify to protect themselves.” John Skivington President Aloi Materials Handling (Rochester, NY)

At Werres Corporation (Frederick, MD), Daniel Senecal, president, sees a 5% sales decrease in the offing for the coming year. “I see the rental business next year being extremely active and some slowdown in new equipment,” he explains. Senecal will try to counteract that by working in conjunction with manufacturers to create more marketing awareness to get to more customers. Werres Corporation will increase the number of service support technicians by 5%.

Allstate Equipment Company (Chesapeake, VA) President Jay Terry foresees 2007 sales to be equal to 2006 levels, pending interest rates. “We already see a downturn in building and housing starts,” he says. To overcome that, he will improve some internal processes and work smarter. “We are not big, so we have to offer services that larger companies can't,” he says, pointing to paperless service documenting and improved billing accuracy. Terry will add a personal assistant as well as two or three service people, if he can find them. “In our industry, hiring young people is very difficult. The industry as a whole is facing that problem.” He suggests offering courses in technical schools and colleges as a way to make people more interested in the industry.

Level sales should also be the standard for A.J. Jersey (South Plainfield, NJ), according to President David Rizzo. He expects the truck portion of his business to remain strong, due to the large amount of warehousing occurring and the proximity to the ports. Secondly, the new warehouses will need to be filled with rack, so the allied side of the business should remain strong as well. Rizzo will add 10-20 new service technicians as part of a planned service department expansion. “Cost of ownership is under a microscope these days, so we must make sure that our customers can get the most for their dollar.” Rizzo points to incentives that his customers can earn to reduce fees and travel expenses as part of their service contracts.

An even forecast is also projected by Brian Pevlin, general manager of Aims Ltd. (Mount Pearl, NL, Canada). “We are located on a small island, so our market doesn't have boom or bust times. It is pretty much steady and we're happy with that.” Pevlin promotes the fact that his company is locally owned and operated and that often helps customers overcome price objections. “We try to enforce to the customer that they get what they pay for in some way.”

Tom Howard, president of Riekes Material Handling (Waukee, IA), predicts level sales for 2007. “There are too many uncertain factors in the economy right now,” he says, listing the Middle East crisis, election year changes and higher interest rates chiefly among those factors. “I think everyone will be more cautious going into 2007, which will have an impact on capital spending.” Howard thinks the level growth can be maintained by continuous training of his employees. “Systems are getting more complicated and we need to stay in line with those complexities. We constantly encourage our salespeople to go to school to keep abreast of what is going on.”

For Henning Hoj, president of Hoj Engineering & Sales Company (Salt Lake City, UT), a flat regional economy in Utah and Idaho means level sales in 2007. “We train our people very well, especially in sales because that's where the initiation of a customer relationship starts. We are very conscious of the personality and the manpower we know we need.” Hoj says he would like to add people, but finds it difficult to do so. “The labor market is totally tapped out, and to hire them away from the oil industry would cost too much,” Hoj says. The company will add automatic palletizers and a new line of JLG scissor lifts, order pickers and aerial platforms.

In Western New York, economic issues are also a concern of John Skivington, president of Aloi Materials Handling (Rochester, NY). “The majority of our customers are manufacturing-based and our territory continues to be eroded by these companies moving overseas,” Skivington says. He hopes to overcome that by continuing a diversification strategy that has been in place over the last few years. “We've gotten away from what we call the A accounts and concentrated more on B accounts because the B accounts are not so volatile.” That strategy, combined with the hiring of two salespeople, leads Skivington to forecast a 5% increase in 2007.

Buddy Smith, CEO of Carolina Material Handling Services (Columbia, SC), anticipates a sales boost of 15% thanks to a strong local economy. Smith also has been conducting additional skills training for his sales force. The company will increase the headcount in its service department to handle the sales growth. “We will focus more of our efforts on retention rather than attraction of new business. Smith believes that the data mining software improvements the company has invested in will help the company make better decisions and be more efficient.

The outlook is just as rosy for President Tracey Clark at Yale Equipment & Services (Menomonee Falls, WI). Clark expects sales in 2007 to eclipse 2006 levels by 15% due to an increase of larger volume customers and innovative hiring and retention strategies. “We are really focusing on word-of-mouth incentives for technicians,” Clark says. “We've offered bonuses for hiring recommendations and increased wages for completing various types of training. It has really worked out very well.”

Another optimistic projection comes from Stoffel Equipment Company (Milwaukee, WI) and its president, Bob Stoffel Jr., who forecasts 10% growth resulting from the hire of two new salespeople and inroads into Class I and III markets. Stoffel plans to add two employees in the service department and a facility in Green Bay to cover more of the market territory. Due to three retirements in the last two years, Stoffel also is creating mission statements for each department to help new employees understand and achieve their goals.