A number of years ago, many material handling distributors handled general or allied lines as a service to their customers. No real plan or desire to effectively market these products, but if “You need it, we’ll find it.”
Fairly logically then, the aggressive distributor and the sharp marketing people in materials handling became lift truck involved. Without too many exceptions, the general line manufacturers were staffed with good engineers and manufacturing know-how, and with a complete lack of marketing ability, the cream of the marketing crop in the industry was almost completely absorbed in the lift truck business.
This resulted in a tremendous number of lift trucks literally being sold into applications that could have been better solved by other means.
The old adage of the better mouse trap means you may have an excellent product, but you had better know how to take it to the marketplace.
Many general line manufacturers and distributors began to realize the value of these “Stepchild” product lines and began devoting the same effort, talent and creativity in marketing to them that was evidenced in the lift truck business.
All material handling products encompassed by the general or allied line heading began to find a major place in the market.
John W. DeWolf, vice president of corporate research for Cahners Publishing Company, in the September 1978 issue of Modern Materials Handling related that the materials handling market in 1977 would encompass about $7 billion in sales, broken down roughly as follows:
- 1.73 billion lift trucks
- 1.63 billion conveyors
- 1.4 billion pallets
- 1.12 billion hoists & cranes
- 380 million racks & shelving
- 740 million containers, automated systems, wheels, casters, etc.
Mr. DeWolf goes on to predict that for at least the next several years, many general lines will outpace the industrial truck in percentage terms of real growth.
Suffice to say, the general lines of materials handling offer now and will continue to offer many opportunities to the aggressive materials handling distributor. As a full line distributor, both trucks and general lines, we have convinced ourselves of some of the benefits we gained. To mention several:
1. Selling to more important or higher level people within the customer’s organization. Many lift truck sales are bids. Many general line sales include design ideas, application information, cost justification, payback and, in general, a more complex proposal presentation. The benefit to the distributor, of course, is obviously a closer relationship within the user company and this, in turn, enhances all product lines.
2. The distributor develops a relationship as a problem-solver, then is called to help solve future problems.
3. General lines, as a rule, tend to be more stable in times of slow down. Also all eggs are not in one basket during manufacturers’ strikes or other problems.
4. Distributorships lose good people when the chance of advancement is hampered. General lines can offer new potentials and open up new positions for managers, divisions, etc. Success attracts people; a full line attracts people because of diversification and growth potential.
5. The chance at creative selling offers the chance of increased profit dollars.
6. General lines increase the ability to sell packages or turnkey jobs. Most material handling manufacturers want to sell only their equipment and the interface or design of even a simple package is left only to a distributor. Those who can handle it, many times, get all of the equipment.
7. The cost of sales in sparse areas can be helped with a bigger basket from which to work.
8. It makes sense when your money is on the line to have a more solid base. Then you are not at the mercy of one or two manufacturers and the possibility of a decision they may make could jeopardize your entire business.
9. Some general lines offer a better beginner’s training ground for new salesmen, and this gives them the ability to move into larger dollar sales of equipment within the company.
Good lift truck salespeople don’t automatically make good general lines salespeople and vice versa. Forcing one or the other to sell product lines that they are not comfortable with or competent with, just does not generate a good marketing situation.
We believe strongly now that a general line can only be marketed by a specialist. Several comparable lines could be grouped, but today’s age of specialization just requires a depth of knowledge about a product, its uses, its markets, that cannot be obtained unless it is isolated and marketed as such.
Obviously, markets, territories and competition would dictate a choice of marketing plans for different areas throughout the country. We find a large degree of teamwork among sales people with the interchange of leads, and who work together to sell a customer a complete product line. The area of responsibility to produce volume and profit dollars for a specific general line is more easily tracked. Corrective action regarding a product line is more easily defined. You know who is and who isn’t doing a job.
General lines certainly are not “Stepchildren” in our business. We attempt to give each of them an equal market effort and expect each of them to play its part in our profit structure.
Take a hard look to see if you have any “Stepchildren” in your material handling company’s product lines. You may be surprised with equal effort, planning, inventories and marketing desire, that one or several of them may become full grown profit contributors.
|Meet the Author
Jack D. Patten
Materials Handling Equipment Company