While 62% of Storage & Handling distributors are predicting sales to increase, they are predicting it to increase at an average rate of only 5.2%, the lowest of any group of material handling distributors. An increase is still an increase, though, and these distributors are holding nothing back to achieve that growth. More than any other group, S&H distributors have the most plans for introducing new product lines and services, and entering new market areas.
|“The best part of this economic downturn has been the education demanded. You learn. You do better.”
|“It’s one thing to talk about service. It’s another thing to deliver on it.”
|“I’ve changed margin perspective and product mix to be more competitive.”
|“Being able to execute every single order well is what we strive for.”
David Cranston Jr.
“We are getting better at working in adversity,” says Jack Alexander, president, BMH Equipment (Sacramento, CA). Alexander is expanding products from backroom equipment pallets and rack to workspace equipment for mailrooms, break rooms and fulfillment rooms. “Mobile shelving for libraries brought us to the front room, an arena where we have to be in front of architects and designers, something we don’t have to do to sell pallet rack.” Alexander describes the lunch-and-learn experience with architects as a much longer educational process. He is looking for a slight increase of 1-2% and will pursue markets in the health field, “an area that seems to be continually moving forward.”
In Kent, Washington, Kevin Katona, president, DACO Corporation, anticipates an increase of 13%, fueled by the hiring of two additional salespeople by April 1. A potential acquisition will broaden the packaging side of the business. Katona has been through an acquisition before and knows that bringing two different companies together can create challenges. “We have to get everyone rowing in the same direction and working with one mindset.” Katona has a pet peeve: “A manufacturer gives a ship date and that ship date comes and goes because of a production problem, but they don’t tell us of the delay. It amazes me that a manufacturer does not think it’s important to tell the customer that the product has been delayed three weeks, while we get calls from the customer asking where their product is.” To alleviate this challenge, staff proactively calls the manufacturer the day product is scheduled to ship to make sure it’s shipped. “At least we can tell the customer what’s going on, so they can plan for some sort of an alternative if they have to.”
2011 was a record year for Allied Caster & Equipment Company (Charlotte, NC) and according to President John Stephens, 2012 will be the same. He’s expanding into new markets, adding personnel and improving marketing efforts. Stephens will be purchasing more bulk product from overseas that his large customers want. “It lowers my costs, and fortunately, we have the space for inventory.” He adds, “The erosion of the industrial customer base is a challenge. I realize I’m part of the problem because I buy overseas; but to stay competitive, I have to.” Stephens’ strategy is simple: “Lock in with a couple of manufacturers that have deep pockets, and then second source. We’re loyal up to a certain point, but if they don’t have it, we have to satisfy our customers.”
At Alpha Material Handling (Midlothian, TX), the most-often-sold equipment in 2011 were lift tables and pallet jacks followed by modular work benches and drawers. “We sell what people are asking for,” says Cathy Edminster, president, who maintains 300+ vendors for the many product lines carried by the company. Edminster expects sales to remain level, and she notices that even long-time customers are being forced to shop by price. As a woman-owned business, Edminster points to government sales as key to growth. She adds, though, “It can also be a nightmare. When push comes to shove, even the government is shopping price.” She is looking for new niche markets.
Rod Jack, president, Storage Solutions Inc. (Knoxville, TN), has several projects in the works going into the new year, mainly large plant expansions. Automotive is doing well, and solar energy markets are strong. Jack is looking for an increase of 10% and is changing his product mix to be more competitive. New products will be introduced, such as different styles of conveyors, safety fencing and 40- to 50-foot-high wall-buildups in plants. Clean rooms are a burgeoning market too, as automotive now requires clean rooms in some plants.
Work on the Marcellus Shale in Western Pennsylvania is driving the local economy, as well as sales growth at Cranston Material Handling Equipment Corp. (Pittsburgh, PA). President David Cranston Jr. is hoping for an increase of 10-15% as a result. Lifting solutions—scissor lifts, cranes, lifting devices, etc.—are a growth area. As the company grows, Cranston wants to develop an infrastructure to support his three outside salespeople. A project management software application to streamline the management of installation projects will go live in the 1st Quarter, and another program will quantify the estimating process. Says Cranston, “I want to create a process that takes the information in my head and puts it in someone else’s hands.” This quantifying software will work hand-in-hand with new lead generation software on a redesigned website. “To develop more sales leads for our salespeople, we are fixing our website to capture leads, rather than being a sieve that passes the leads on to the manufacturers.”
|“We must listen to and learn from our customers.”
|“Every employee in our company understands that our customers’ best interests are what we’re here to serve.”
|“We want customers to know how a local company can go to bat for them with municipalities and permitting, and dealing with installation or supplier issues.”
|“The Internet makes it easier for the end-user to connect with a manufacturer or wholesale distributor instead of going through the traditional distribution channel.”
With pent-up demand, Jeff Conger, president, Bernie’s Equipment Co. (Holmen, WI), expects customers to start spending money in the new year. “They’ve been limping along and are ready to purchase new equipment.” He forecasts sales to stay on an even keel and is looking forward to large projects with distribution centers, both revamping older ones and building new. Conger points out that service from many suppliers has decreased over the years. “Some are very good. They accompany on sales calls; they know their product and how to sell against the competition. Others know how to use the computer.”
Steve Schmitz, president, Star Equipment (Blaine, MN), forecasts an overall sales growth of 3-5%, but the service side of the business is doing very well and is predicted to increase by 10-15%. New equipment sales are flat. “We live the service lifestyle,” Schmitz says. Equipment growth is based on sustainability initiatives and energy savings, and Schmitz is offering products that align with those areas, such as LED lighting, high-volume air fans and high-speed doors. He will add a service technician and aftermarket sales reps.
Private sector spending is returning and will be a big part of a forecasted 12% increase at Western Storage and Handling (Englewood, CO), according to President Harry Neumann, whose company will be moving into a new, larger facility in the 3rd Quarter. “With double the space, we can broaden the products we stock and pursue new markets, like office storage equipment. Neumann wants to improve the effectiveness of the sales team, and he wants them to become more effective using technology. At sales meetings, they review how to ask good, probing, open-ended questions to uncover what is going on with the customer. They also learn how to listen and how to take good notes that provide information to put into customer proposals and reports.
Steve Stein, president, Stein Service & Supply (Charlotte, NC), forecasts sales to increase by 5% as the economy slowly improves, and he is seeing increased demand for used equipment, especially among small businesses. He wants to hire a marketing person and an installer in the 1st Quarter. Stein points to the challenge of a flattened distribution channel and explains: “The end-user looking for a rolling ladder calls the manufacturer because he finds them on Google. If the end-user is told to call the dealer, the end-user often says ‘forget it’ and will go to the next Google result and keep going until he finds somewhere to buy the ladder. He doesn’t want to make another phone call and wait for a dealer to call him back. Everybody wants the path of least resistance, the easiest way to buy something. If the end-user has to make five phone calls and talk to a bunch of people then wait for them to call back, that sale will not happen.”
Tom O’Hara, director of sales and marketing at S.W. Betz Company (Baltimore, MD), may add an inside salesperson in the 2nd Quarter as well as an additional product line. An increased emphasis on communicating with the customer, along with upping customer service, will help maintain sales. O’Hara is emphasizing communication with the customer and has stopped emailing quotes.”If people are within driving distance, we deliver the quote.”
The sale of used equipment will be the driver of a 10% increase for Michael Talis, president, Ludflow Sales & Service (Columbus, OH). “People have been sitting on the sidelines for the last three years, and they have to start moving,” Talis says, “and they’re still fighting dollars.” With a COD list that has quadrupled over the past three years, Talis continues to do credit checks. “There are customers who want to dictate the terms. If the customer wants us to be a bank, then they are going to pay for the privilege.” Adds Talis, “Some deals, we carry our own paper. Sometimes we stretch out the payments to help them. In these times, you have to do what’s necessary as long as it’s still a good deal.”
2011 turned out better than expected for Certified Hand-ling Systems (Salt Lake City, UT), and Curtis Ward, CEO, expects more of the same this year. A marketing person will be added to help increase market share. Ward is considering working in teams, rather than as individuals. A new CRM is helping track contacts. Says Ward, “When the opportunities come, we have to be able to see where they are going and what they are doing.” An engineer will also be added, and the website is being rebuilt.
INDUSTRY FORECAST Distributors
- Labor Costs Will Drive ENGINEERED SYSTEMS
- New Markets Focus STORAGE & HANDLING Activity
- DIVERSE Products Provide Balance
- INDUSTRIAL TRUCK Sales Gain Traction
- Ditributor Graphs