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10 Ways To Make Money in 2010

Distributors suggest strategies to meet their expectations for the year ahead.

It’s no secret that 2009 was a year rife with challenges for the material handling industry. Most distributors reported sales decreases for 2009 and are glad to have it in the rear-view mirror. Now the calendar has flipped to 2010 and there is a renewed sense of hope among the 50 distributors interviewed for The MHEDA Journal‘s Annual Industry Forecast. Optimism is back, as 68% of those interviewed are expecting sales increases, but it is tempered by a still-uncertain economic outlook. The recession has resulted in a new business landscape. The rules that govern the path to success have changed, and here are 10 strategies that distributors are using to write the new rulebook:

  1. Make It Easy for Customers to Find You
  2. Spend Time with Customers to Build Relationships
  3. Offer New Products and Services
  4. Expand Your Facilities and Personnel
  5. Improve Internal Processes and Procedures
  6. Sell the Added Value of Distribution
  7. Concentrate on the Aftermarket
  8. Focus on Training
  9. Restructure Your Business Development Teams
  10. Purchase More Inventory

Read on to learn more and get ready to face 2010.

 

Customers aren’t buying now, but they will spend money again eventually. Distributors need to remain in their consciousness, so many are choosing to increase their marketing budget and enhance their presence on the World Wide Web.

Dave Kenealy
DAVID KENEALY PRESIDENT, DAK EQUIPMENT & ENGINEERING COMPANY (ELMHURST, IL)

“Now is not the time for reduced marketing. We will do more Internet-based marketing, using our Web site and automated e-mail programs to generate leads. We are spending almost no money in traditional print or Yellow Pages advertising because it just doesn’t work anymore. Our increased marketing efforts will help people see us when they are ready to make improvements that previously have been on hold. Pent-up demand will drive most of our growth, plus we are looking at new business segments, such as federal government and military work.”

FORECAST: Up 25%
LESSON: Be prepared. You should always be ready for a change in the economy, whether it’s for the better or the worse.

Jeff Stohr
JEFF STOHR PRESIDENT, CONVEYOR & CASTER – EQUIPMENT FOR INDUSTRY (CLEVELAND, OH)

“We want to expand our business. For us, that means investing in marketing, particularly online. We now have a person in charge of that. He manages the Web site, blog, search engine marketing and optimization and our social media marketing. Last September, we hosted an open house that drew about 150 customers to our location. It was very helpful in letting customers know about our complete offerings. We also have an additional 7,000 sq. ft. in the building next door that we purchased last year, and we plan to expand into it in the Fourth Quarter.”

FORECAST: Up 20%
LESSON: Well-managed companies with financial strength are the ones that survive.

David Rizzo
DAVID RIZZO PRESIDENT, A.J. JERSEY (SOUTH PLAINFIELD, NJ)

“Advertising rates in local real estate magazines have come down, and we have been able to justify increasing our exposure there. We’ve also started to package our value-added services. For instance, we sometimes throw in free maintenance on some vehicles to get sales from a particular customer. Hiring skilled labor remains a challenge, so we have reached out to local high schools and community colleges to convert automotive students into forklift mechanics. We have a new line of personnel carriers that we will concentrate on, and we will move into a larger building if we find the right one.”

FORECAST: Up 10%
LESSON: We held firm on prices, and our very loyal customers have proven to be very loyal even in the down times. That suggests that our formula works.

Gary Ashley
GARY ASHLEY PRESIDENT, CONVEYORS & DRIVES (ATLANTA, GA)

“A decrease in business has freed up time for us to help customers with engineering, and we’ve added an outside sales engineer to prepare for when things break. We’re re-doing our Web site and trying to get it listed higher on the search engines. We are listed in the Thomas Register and other similar directories to drive awareness of our company. The Web is great for that, but it also introduces new competition. For instance, we’ve received several inquiries through our site from all around the country for projects that are also being quoted by competitors we aren’t familiar with.”

FORECAST: Up 10-15%
LESSON: Every little order helps. People lose sight of that when things are going well.

CHARLES HILLEBOLD PRESIDENT, HCM SYSTEMS (WILLOWBROOK, IL)

“We have a marketing group that focuses on new customer development through print, Internet, pay-per-click, search engine optimization, you name it. We will stay focused on that and also invest in an ERP system to integrate our front- and back-office functions. I see more consolidation among end-users, which will result in more national customers and fewer local customers. We also will try to be much more consistent with the message we convey to our employees. We have been a lot more open with them so that they have a clear understanding what the state of the business is.”

FORECAST: Level
LESSON: It’s nice to be optimistic, but you also need to be realistic about your opportunities.

Bill Bolin
BILL BOLIN PRESIDENT, LIFT TRUCK CENTER (WICHITA, KS)

“We’ve stuck with our normal activities, advertising and pricing that have always been effective. The agriculture business around us is still good. I don’t see much movement in the market to the point that people out here are doing anything differently. It will be a challenge to make some money, but that’s not any different than any other year. We updated our Web site so that it has a bit more pizzazz and hopefully will allow people to find us.”

FORECAST: Above 2009
LESSON: Recessions don’t last forever, so just hang in there and do the things you know how to do.

John Parsons
JOHN PARSONS PRESIDENT, DEEP SOUTH EQUIPMENT COMPANY (SHREVEPORT, LA)

“We did not lay off any salespeople. The more people we’ve got out there, the more calls we can make and the better chance we have of getting the available business. In fact, we added a salesperson and adjusted our sales territories internally to try to get better market penetration. We’re doing more advertising-radio spots, direct mail and company brochures-and so far we’ve seen good results. I’m not planning to decrease my inventory; we may even add a few rental trucks because our rental utilization is starting to creep up.”

FORECAST: Up 10-15%
LESSON: Not depleting our resources has increased the net worth of the company.

Tim Colston
TIM COLSTON PRESIDENT, APPLIED HANDLING EQUIPMENT CO. (DAYTON, OH)

“We’re going to increase our marketing, starting by investing more in our Web site. We seem to be getting more work from customers who recognize that they do need help. They have fewer people doing more work, and they are becoming more dependent on our expertise and experience to help them through their decision-making processes. More customer contact and interaction helps us address that need, though our challenge remains to find more diversity in our customer base to replace the automotive-based business that was dominant here in the Midwest.”

FORECAST: Up 15%
LESSON: There’s a big difference between a want and a need.

Greg Wait
GREG WAIT PRESIDENT, FREDON HANDLING (JACKSON, MI)

“A lot of business has been lost here in Michigan, so we need to find new ways to reach the people who are still here. We are re-evaluating our primary sales areas and looking to expand our territory a little further away from home. We plan to channel more money into the Internet by upgrading our Web site and doing a small e-newsletter. End-users may have excess equipment available as they downsize, and our enhanced Web presence will help us get the word out about what is available and offer some suggestions for ergonomic improvements.”

FORECAST: Up 10%
LESSON: Get back to basics. You must have a solid foundation to move forward.
 
 
 
When sales are tough to come by, any information you have about your customer can help to generate leads and close sales. The only way to gather that information is to spend time, build a relationship and know your customer, inside and out.

Joe Schmelzer
JOE SCHMELZER PRESIDENT, EQUIPMENT INC. (JACKSON, MS)

“When times are good, customers are busy and don’t have the time or desire to talk to a salesperson. Now they’re able to talk with us, so we walk them through the plant and say, ‘What would you do if business picked up 30 percent?’ They start naming things right away, like repairing damaged rack or putting more forklifts back in service. We work up a plan and tell them we’ll have specifications on file so that we can start working on it as soon as things turn around. It’s amazing what we’re finding out.”

FORECAST: Level
LESSON: We can do what we’re capable of doing with fewer people and fewer resources.

DAVID GRIFFIN VICE PRESIDENT OF OPERATIONSK-LIFT SERVICE COMPANY (SALINAS, CA)

“We are encouraging our salespeople to physically go in and talk to customers to see how they are making it through and also doing sales blitzes to reach out to other avenues. Specifically, we are hiring one person to manage safety sales. Obtaining financing for both ourselves and our customers will remain a challenge, and we’re researching and reaching out to financing companies that we haven’t done business with for a long time. Emissions regulations are becoming more stringent, and it’s extremely important to keep our employees and our customer base aware of the rules and their impact.”

FORECAST: Up 8%
LESSON: Always keep on top of your expenses. You have to ask yourself why you got into a position where you’re not watching your expenses to begin with.

Mark McElligott
MARK MCELLIGOTT GENERAL MANAGER, KISTLER EQUIPMENT COMPANY (OMAHA, NE)

“We had some big projects in 2009 that were already in place before the credit crunch hit that won’t come in this year. To counteract that, we will expand our product offerings to provide smaller solutions to customer problems. That will require better understanding of the needs of our current customer base and what will fit them best. To that end, I will spend more time with customers. We’re trying to provide a more turnkey approach, helping with the upfront design all the way through planning, installation and testing. Customers don’t have that expertise on staff anymore.”

FORECAST: Level
LESSON: You learn how you’re valued by your customers and what they value about you. Their level of loyalty will shine through.

Craig Schoen
CRAIG SCHOEN COO, LIFT PRO EQUIPMENT COMPANY (SIOUX FALLS, SD)

“We use the phones and computers a lot more to contact customers. You still need to have the face time, but they’re also a little more understanding if they don’t see a salesperson quite as often. We encourage our salespeople to still stay in contact via phone or e-mail so there’s always some level of communication. We don’t have our salespeople driving in the territory quite as much. It’s too expensive to go out and train new employees, so we’re doing what we can to keep the people we’ve got.”

FORECAST: Level
LESSON: You become a little more observant at the small items in your operation that you didn’t pay attention to before. It makes you a little sharper businessperson.
 
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Paul Wanous
PAUL WANOUS PRESIDENT, SKARNES INC. (PLYMOUTH, MN)

“End-users are going to be more accountable for their purchases, meaning that eroding margins will continue to be a challenge. Customers are working the deals just like we’re working the deals-everybody’s looking for better. Margins will take a significant hit next year as people continue to shop. We will present cost-plus projects to customers and see if we can build upon our customer relationships so that it’s more than just a ‘bid-bid, quote-quote’ thing. We’ll see if we can establish a rate that’s favorable for everyone so we can eliminate each other’s risk.”

FORECAST: Level
LESSON: It can be done on less. It’s been an opportunity to take some time and clean up the warehouse.

JOHN VACCARI VICE PRESIDENT, MANCHESTER INDUSTRIES (YORK, PA)

“Customers are less willing to sign long-term commitments. They all want increased flexibility and the ability to walk away from contracts with no risk. That means more risk for us, but we want to meet their needs, so we have decided to meet those requests in many cases. That’s why we are making more frequent customer touches in our territory to generate aftermarket business. That will help us fund two additional sales reps and two aftermarket reps.”

FORECAST: Up 5%
LESSON: Increased communication between departments is critical. Implementing more frequent meetings has really helped with cross-departmental coordination.

Tom Pavone
TOM PAVONE PRESIDENT/CEO, CROSS BROS. CO.(ROCHESTER, NY)

“To project where customers will spend their capital, it comes down to spending time with them, helping them plan and budget their integrated solutions. We spent more time in 2009 with existing and potential customers, which was an important investment of our time and resources. We often assist with their ROI calculations and floor layouts. We’ve made some inroads that will pay off going forward. Customers are looking more for integrated packages or turnkey systems, so there are plenty of opportunities out there for integrators to grow.”

FORECAST: Up 25%
LESSON: Having a more diversified customer base would have helped us weather the recession a little better.
 
If customers aren’t buying what you’re selling, try selling them something else! It’s not that simple, of course, but diversification is a popular strategy in this market. Declines in one product line can be offset by sales in another to help boost the bottom line.

David Shank
DAVID SHANK PRESIDENT, DELUXE SYSTEMS OF FLORIDA (TAMPA, FL)

“It’s not enough to have a good product at a good price-the customer is looking for more value-engineered service. They are looking to fit the same amount of product in less square footage, and the only way to do that is to go higher. We are performing more analysis of high-density storage systems, taking 10- to 12-foot warehouses up to 16 or 18 feet high. We are looking to hire employees, but we aren’t just going to bring someone in to fill a spot. We will spend more time doing the correct pre-hire analysis.”

FORECAST: Level
LESSON: Reducing our debt and overhead prior to the recession put us in good position.

Dan Powers
DAN POWERS VICE PRESIDENT, DUNN/POWERS MATERIAL HANDLING (PHOENIX, AZ)

“We are directly affected by the construction market and the resort industry, both of which struggled in 2009. We will continue to look for opportunities and expand into markets that we have not been in before, possibly expanding our product line. We will see some new styles and designs in casters. We have our own steel manufacturing facility that allows us to create new custom products based on our customers’ needs. Competition with big-box stores, who often don’t know the correct item for a customer’s application, helps us solidify our position in the market as a specialty supplier.”

FORECAST: Above 2009
LESSON: Control your inventory and pay extra attention to special orders.

Spencer Whitt
SPENCER WHITT PRESIDENT, A.M. DAVIS LIFT TRUCK SALES & SERVICE (RICHMOND, VA)

“We are working more with aerial equipment, with which we’ve had more activity than our other lines. The ability to raise prices is non-existent for the short-term, so we are reviewing quotes more closely to make sure we give the customer the best bargain we can. We want to provide what is necessary and not put too many extra items on there. If the quotes get blown up too much, customers will simply not fix the equipment. Before long, though, people who have not been replacing equipment will need to do something or obsolescence will set in.”

FORECAST: Level
LESSON: Really focus on customers’ needs, not so much in terms of specific products, but in what they really need to budget for in the future.

Jay Waugh
JAY WAUGH PRESIDENT AND GENERAL MANAGER, GRAY LIFT (FRESNO, CA)

“We’re primarily an agriculture-based economy, but more than 200,000 acres near here have had water cut off by drought. As that situation rights itself, we should see an increase as those areas regain productivity. We’ve really pushed some of the non-forklift areas to help offset the decline in the market here, particularly in the area of warehouse systems service-industrial doors, dock equipment, balers and compactors. That’s the only real growth part of our business right now. We just started doing fire door testing, and we will push that hard going forward.”

FORECAST: Up 2-3%
LESSON: We’ve learned we can get by without certain positions when we need to. Our people have the capacity to do more work than we originally thought.

Jeff Gambrill
JEFF GAMBRILL PRESIDENT, ALOI MATERIALS HANDLING (ROCHESTER, NY)

“Our revenue will be up next year thanks to an acquisition we made in 2009. But looking strictly year over year, we will be down based on what our customers are forecasting. To counteract that, we will keep pushing a new palletizer line. Customers are looking to their suppliers to come up with ideas for them, to be more of their strategic and technical experts in the field. That will require additional training with our customers to take on more responsibilities that we didn’t before.”

FORECAST: Down 5%
LESSON: Don’t take your customers for granted. Promote all of your capabilities to them.

2010 Projected Sales Activity by Geographic Region

Richard Sinclair
RICHARD SINCLAIR PRESIDENT, JEFFERDS CORPORATION (ST. ALBANS, WV)

“We are positioning our people to take advantage of opportunities beyond lift trucks. We’re doing a lot of work with engineered products, mezzanines and other equipment that we have not been as aggressive in historically. It’s not our style to stuff a lift truck down someone’s throat if the application is better met by a conveyor, crane, overhead hoist or something else. We’re trying to expand our product knowledge in those areas. Also, we’re communicating more with employees via conference calls to keep everyone updated about what’s going on in the company.”

FORECAST: Up 5-7%
LESSON: Material handling is still a relationship business. Maintaining relationships with customers, employees and suppliers is paramount.

Ted Springer
TED SPRINGER PRESIDENT, SPRINGER EQUIPMENT COMPANY (BIRMINGHAM, AL)

“Three words: Diversify, diversify, diversify. We must think differently than we have in the past and offer creative solutions to enhance customer efficiencies. It’s time to look at strong diversification, so that we’re able to allow a much broader field of solutions to the customer’s material handling problems. We have started getting involved more heavily in the integration of robotics, conveyors and automatic guided vehicles. That will require an expanded training base as we turn our employees into specialists in the non-truck business.”

FORECAST: Up 5-10%
LESSON: Keep a positive outlook. If you don’t, you will get beaten down pretty quickly.


When the upsurge in business does come, it will pay to be prepared. Some MHEDA members are taking this time to make sure their facilities and work force are at the right sizes to accommodate the growth they see on the horizon.

Ken Fearn
KEN FEARN PRESIDENT/CEO, ADVANCED BATTERY TECHNOLOGIES (GREENSBORO, NC)

“We were fortunate that we weren’t hit by the recession nearly as hard as others in the industry; we actually ended up at 2007 sales levels. What we lost in volume during 2009, we have made up in market share. Customers are looking for someone who can provide more of a turnkey solution than in the past, and we feel we have a real advantage in fleet management. In April 2009, we added a new facility in South Carolina, and moved to new headquarters in Greensboro, North Carolina, in December. In 2010 we will focus on placing a branch in eastern Tennessee and eastern North Carolina. We plan to add six or seven new hires during the year to meet customer demands.”

FORECAST: Up 15%
LESSON: Be smart and watch your expenses.

Harry Neumann Jr.
HARRY NEUMANN JR. GENERAL MANAGER, WESTERN STORAGE AND HANDLING (ENGLEWOOD, CO)

“We are a very new distributorship, and we are still in growth mode. We are getting more involved in government business, and we recently added a salesperson who will drive some new business. To accommodate such growth, we will need an administrative person within the next nine months and a larger facility in the second half of the year. We have a large geographic area, so our travel budget is huge to begin with; we are paying very close attention to make sure it doesn’t get out of hand.”

FORECAST: Up 10-15%
LESSON: The personal relationship between the salesperson and the contact or business owner is more important than ever.

Mark Maechling
MARK MAECHLING PRESIDENT, CAL-LIFT (CITY OF INDUSTRY, CA)

“Although the market is down, we think it’s very important to increase our customer support and the number of people out in the market meeting face to face with customers. We have just recently added people in the San Diego and Bakersfield areas to provide more intense coverage. You win with your people. You’ve got to have a great team and a great strategy because it’s a much more aggressive market out there.”

FORECAST: Up 5-10%
LESSON: There’s a lot of competition, and the companies that are financially strong and have good asset and cash management strategies are the companies that survive.

Jeff Darling
JEFF DARLING VICE PRESIDENT OF OPERATIONS, WASHINGTON LIFTRUCK (SEATTLE, WA)

“I really think it’ll be 2011 before we see a significant recovery in our marketplace, but there will be some pent-up demand this year. People have pared down their fleets and held back on their parts and service needs. To address that, we will hire four technicians. We also see some opportunities in the environmental arena, so we’re negotiating some things in that market. We pride ourselves on providing high-level benefits, but we may have to start reducing them if health care continues to rise.”

FORECAST: Up 7-10%
LESSON: Be proactive rather than reactive. Make the tough decisions early on.

Harry Fairhurst
HARRY FAIRHURST CEO, FALLSWAY EQUIPMENT COMPANY (AKRON, OH)

“Our truck equipment division picked up some new lines and should see growth, but the material handling side of our business will be flat. Many of our customers are having a hard time bringing people back to work, and we’ve provided a few of our key accounts with service labor that they used to perform internally. We will increase our service force by about three percent but otherwise we plan to keep our core employees in place. We need those experienced and educated individuals to lead us out of the recession.”

FORECAST: Up 10%
LESSON: I learned that our company has the ability to control costs and right-size itself.

Scott Larsen
SCOTT LARSEN PRESIDENT, R.H. BROWN COMPANY (SEATTLE, WA)

“Our main focus is continuing to find customers with capital to spend, so in 2010, we will continue to put more emphasis on food processing and other vertical markets. Customers are more inclined to keep their current equipment working rather than buy new, so we see more demand for service-related business. We are hiring an installer and a salesperson in response to that. Between the second and third quarters, we will relocate to a new building to take advantage of affordable commercial real estate and get some stability going forward.”

FORECAST: Level
LESSON: Stay focused. We have limited time and resources, so we need to make sure that we don’t waste time worrying about things we cannot control .

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A streamlined and efficient distributorship is one that can respond most quickly to end-user needs, a critical skill as business will begin to come back throughout 2010.

Fred Graflund
FRED GRAFLUND PRESIDENT, GRAFCO (MEMPHIS, TN)

“Our market is primarily a distribution area with very little manufacturing. Distribution-based customers are relying on retail sales improvement before they make any major changes, so it is going to be a slow recovery. The most important thing is to have a good, competitive price because right now customers are extremely cost-conscious. Like them, we’re closely watching our expenses, receivables and cash flow in order to remain profitable.”

FORECAST: Level
LESSON: Remain competitive so you’re in the game to satisfy customers when the turnaround occurs.

John Williams
JOHN WILLIAMS PRESIDENT, CONVEYORMAN (MEMPHIS, TN)

“End-users are strapped, and they need quicker response times. They’re looking for us to take a bigger role in their design and engineering, even as they are putting things off. We must be responsive to that and convert more of our proposals into projects. We’ve added one project manager and will look to hire a salesperson later this year. We’re buying more equipment to help us automate our own operations in the warehouse and the office.”

FORECAST: Up 10%
LESSON: Stay focused on improving yourself and don’t get carried away by the naysayers.

Jerry Harrison
JERRY HARRISON PRESIDENT, HARRISON EQUIPMENT CO. (KENT, WA)

“We cover everything in a material handling warehouse, including the dock and doors. A lot of our customers are turning more to used equipment to handle projects that they previously bought new products for. Plus, we are getting more and more Chinese imports into our market here on the West Coast. It’s going to continue to be a challenge to sell products, and we will just continue to tighten our belts. After all, if no one is buying, how can you sell anything?”

FORECAST: Above 2009
LESSON: Keep tightening your belts to get by.

Richard Strickland
RICHARD STRICKLAND PRESIDENT, ALLIED-CALLAWAY EQUIPMENT COMPANY (KANSAS CITY, MO)

“The customer has gotten very price-conscious in the last year or so. Many are going out for three bids on everything and there isn’t a whole lot of loyalty. Because of this, we’re trying to be more careful about how we bid projects to get as much business as possible. The multi-million dollar projects that were commonplace in the 1990s aren’t coming around as often any more. We’re focusing more on smaller projects and weathering the storm the best we can.”

FORECAST: Above 2009
LESSON: You must have good producers in sales who are willing to keep their noses to the grindstone.

Andy Daughetee
ANDY DAUGHETEE VICE PRESIDENT OF MATERIAL HANDLING, HODGE COMPANY (DUBUQUE, IA)

“The people who have bought from us in the past are our best prospects for new sales, but we haven’t done a good job marketing our products to them because we haven’t managed our database well. We’re focusing on improving that to help with more e-mail marketing and sales blitzes of our entire product line to existing customers. We’re selling our service wares more because customers are looking to fix old equipment rather than buy new.”

FORECAST: Level
LESSON: You see where there is room for necessary cuts.
 

68% of material handling distributors expect sales to increase anywhere from 2% to 25%. The average increase for these distributors is 9.8%.


 
It’s up to distributors to let customers know all that distributors can offer them. In doing so, it may prevent customers from going to other sources, such as manufacturers or online competitors, for equipment they can get from a distributor. Each sale saved is a plus for the bottom line.

Patrick Stemper
PATRICK STEMPER VICE PRESIDENT/GENERAL MANAGER, BADGER TOYOTALIFT (NEW BERLIN, WI)

“There must be pent-up demand out there for material handling products. We’re trying to sell the added value of dealing with Badger ToyotaLift by stressing the quality of our product, our people and our service. It’s important to qualify each opportunity because we can’t afford to spin our wheels. We downsized our Madison, Wisconsin, branch at the end of 2009 to reduce overhead; on the other hand, we are looking to add three new technicians and are considering adding a small store in the southern part of the territory.”

FORECAST: Up 10%
LESSON: Service remains priority number one. That really helped us maintain our customer base in the downturn.

Don Mays
DON MAYS PRESIDENT, CRAFT EQUIPMENT COMPANY (TAMPA, FL)

“The challenge is to find new markets that will be in growth mode shortly and finding opportunities in those areas. We are targeting our efforts on the markets that are still buying, such as defense, government-related contractors and healthcare. Customers in most other markets, though, are downsizing, so it is up to distributors to justify the value that we add for them. Show customers how the application you propose really works and what the true return on investment will be.”

FORECAST: Below 2009
LESSON: Recognize those areas where you’re not as efficient as you need to be and fix them.

Chris Shult
CHRIS SHULT PRESIDENT, BABUSH MATERIAL HANDLING SYSTEMS (SUSSEX, WI)

“Some projects we have quoted are already funded, so we expect good growth. However, we do not expect to have the same revenue as in recent years. End-users need help justifying the cost of new equipment, and we will make sure that we are doing everything possible to justify our capabilities for them. We must understand our customers and why they decide to purchase. Are they commodity buyers or value buyers? We will treat each type of customer differently.”

FORECAST: Up 10%
LESSON: We implemented cost-saving measures earlier than many people, which was the right thing to do in spite of how it looked at the time.

Jeff Ross
JEFF ROSS PRESIDENT, ESS GROUP (BRENHAM, TX)

“The end-users are going to depend more on the industrial distributor, which should add value to us. We’ve got to make sure they understand that everything is not price-driven, but that we can help them in numerous areas, like engineering and purchasing. We will do more benchmarking of suppliers to determine which ones we should do more business with and will spend time training with them. The down economy has really increased competition because people are coming from further away and competing harder on price to get work.”

FORECAST: Up 5%
LESSON: You must do an extremely good job of following up on projects and work harder to make sales happen.
 
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New equipment sales are at a standstill, and the expectation for quick rebound is not overly optimistic. Users with aging equipment, however, are going to need to fix it if they don’t replace it, so parts and service are areas where a distributor can make a buck.

Rob Stress
ROB STRESS MANAGER, GREENE ENTERPRISES MATERIAL HANDLING (TUCSON, AZ)

“We’re not focusing on forklift sales at all because there are very few happening. To raise income, we need to focus strictly on parts and service. A lot of customers are fixing machines themselves, which has really helped us. Instead of selling parts to our own service department, we’re doing better on outside parts sales than ever before. It’s critical to present your customers with everything you do and all the ways that you can save them a buck. Let them know you care about them and have their best interests in mind; they really appreciate that.”

FORECAST: Up 5%
LESSON: Stay on top of inventory. We will do that better than we ever have, and it wouldn’t have been a focus without the downturn making us do it.

John Wieland
JOHN WIELAND CEO, MH EQUIPMENT COMPANY (PEORIA, IL)

“The one area where we really want to distinguish ourselves is fleet management. We will have more service technicians in 12 months than we do today, but we watch our billable hours daily because we don’t want to hire people and then turn around and let them go. We’ve attempted to reduce our non-earning assets so that our need to borrow is minimal. Our borrowing year over year is down about 30 percent, but we still have significant assets. We may need to be a little more creative on our contracts to provide more flexibility.”

FORECAST: Up 5-10%
LESSON: The saying is that a good management team will prune the tree during the days of prosperity, not during the year of drought. That’s what we’ve tried to do.

Gordon Morrow
GORDON MORROW PRESIDENT, THE BAILEY COMPANY (NASHVILLE, TN)

“Equipment sales are down, but service has remained pretty stable. The trend in service is toward total cost acquisition. Customers are looking to acquire machinery and products that will do their job with a known cost for a set period of time-like the automakers who offer 100,000-mile warranties, for example. Service is what helps you through periods of recession because that’s steady income. We have kept our assets, people and capabilities in good order to take advantage of the upturn in business. Had we cut back our inventory or people, we would not be prepared.”

FORECAST: Up 12%
LESSON: Better anticipation and better preparation.

Ken McDonald
KEN MACDONALD PRESIDENT, M & G MATERIALS HANDLING (EAST PROVIDENCE, RI)

“Manufacturing jobs will not be replaced quickly. Since those customers are not utilizing their equipment as much, the need to replace them is reduced. End-users are finding capital very difficult to acquire, so there may be more companies looking at leasing or short-term rentals. We did not shrink our rental fleet; we want to be ready to meet demand as it comes into place. We are becoming more of a consultant with fleet management. By reducing operating expenses in customers’ fleets, we hope to garner their business when it turns around.”

FORECAST: Level
LESSON: Waiting until the recession hits to become more disciplined and efficient is too late.


In good times, training can sometimes get overlooked. But training is a productive method for filling slow periods, and educated employees know the products better, know the customers better, and should be able to sell more product.

Buddy Smith
BUDDY SMITH CEO, CAROLINA MATERIAL HANDLING SERVICES (COLUMBIA, SC)

“The big issue going forward is gathering sales talent and training them, both with manufacturer and in-house training. It’s harder to get sales, so our sales talent has to continue to be refreshed and updated in terms of having the right people on the street and making sure that they have the right product knowledge and sales skills. I’ve personally taken a more active role in visiting customers, and we’ve become more consultative in our sales process, meaning that we are much more oriented toward helping people with utilization percentages and replacement strategies.”

FORECAST: Up 10%
LESSON: Right-sizing our inventory is probably the biggest thing we’ve done to protect our cash flow.

Michael Tucker
MICHAEL TUCKER PRESIDENT, APPLIED HANDLING NW (KENT, WA)

“Once the recovery does begin, we’re going to need to create solutions that incorporate more automation and conveyance equipment. This will require more training with our conveyor suppliers, expanding our contact with them and pursuing opportunities where I know they exist, such as in the food service industry. I also have contracted with a Web site development company and made a significant commitment to expanding our site while simultaneously continuing direct marketing efforts in other mediums.”

FORECAST: Level
LESSON: Focus on anything that will enhance and automate the receipt, put-away and shipment of difficult products.

Robert Young
ROBERT YOUNG VICE PRESIDENT/GENERAL MANAGER, ADOBE EQUIPMENT HOUSTON (HOUSTON, TX)

“In 2006, 2007 and 2008, the majority of customers in our market who expanded did so rapidly, meaning they had surplus equipment when the recession hit. When a unit broke down, they didn’t repair it and just used one they had parked. For that reason, our parts and service business will skyrocket as the economy improves and people need to fix that equipment. We will invest in training, particularly as it relates to creating sales through financial merchandising. We’re looking at different ways to approach financing for customers, trying to overcome the credit crunch that many are facing.”

FORECAST: Up 20%
LESSON: Don’t get discouraged. Hang on to your good people.
 
Diverse Mix Distributors
 
If salespeople aren’t making sales, you need to find other things for them to do. A restructuring of the sales department can often ensure everyone’s time is being used wisely.

John Croce
JOHN CROCE PRESIDENT, ABEL WOMACK (LAWRENCE, MA)

“We spent 2009 working on business development initiatives, which included restructuring our sales force into three units. Our core sales force sells lift trucks, rack and allied equipment. The systems integration sales force sells everything from conveyors to complete four-wall solutions and integrated solutions. The new part of the sales force is a business development group that generates leads for any activities going on in our territory by way of industrial agencies or the government. Our salespeople are now spending time doing what they do well, which is working with our existing clients or pursuing qualified leads.”

FORECAST: Up 10-15%
LESSON: Continue to have high expectations for strong results in spite of the overall economic environment. There’s a natural tendency to fall into a malaise and accept less-than-perfect results as the new normal. We can’t let that be the case.

George Pimpl
GEORGE PIMPL PRESIDENT, RENO FORKLIFT (SPARKS, NV)

“Our primary strategies will be continued cost-cutting and debt reduction. Our work force is down more than 50 percent, and those who are left are working reduced hours. Our customers are in the same boat; they are having to think things through rather than just throw bodies at a problem. We are offering shorter rental terms, and they have been receptive to that. The only investment I see us making is in a computer system that will add some efficiency to the office.”

FORECAST: Level
LESSON: It makes you realize how much waste is in your company. You start looking at everything, all the way down to the water coolers.

Daryle Ogburn
DARYLE OGBURN PRESIDENT, ADVANCED EQUIPMENT COMPANY (CHARLOTTE, NC)

“The quality of our activity is much better lately, so I’m optimistic that things are picking up. We have customers in growth industries like food, pharmaceuticals and medical devices that we think will give us a boost. There’s nothing particular on the horizon, but we are a small enough company that one nice order can make a huge difference on our bottom line. We will continue to focus on products that serve those growth industries and concentrate more on new business development rather than pure sales engineering.”

FORECAST: Up 5%
LESSON: Recognizing where the industry is headed and preparing early is the key.


When customers return to buying products, which is expected to happen early in 2010, distributors will need to have product on hand to offer them. After postponing their purchases, they won’t be able to wait any longer, so distributors with available inventory may have a leg up.

Bryan Armstrong
BRYAN ARMSTRONG PRESIDENT/CEO, NAUMANN/HOBBS (PHOENIX, AZ)

“Customers will need to replace outdated equipment and assets that have been used up. As they begin to call for parts and service on those assets, we’ll need to have more inventory available to satisfy their needs. We will invest money in both short-term and long-term rental assets. We sold a lot of our short-term fleet to match utilization with demand, but we’re going to have to beef that back up now as the economy comes back. The industry may have some difficulty managing the rebound because increased demand may push out delivery timelines for manufacturers.”

FORECAST: Up 10%
LESSON: We realize who the really important people in our company are, and we make sure to take care of them.
 

Average Projected Sales Change by Geographic Region

Rex Mecham
REX MECHAM PRESIDENT OF MATERIAL HANDLING DIVISION, ARNOLD MACHINERY COMPANY (SALT LAKE CITY, UT)

“2010 is hard to predict. On one hand, much of our business is dependent on the building industry and I don’t see that coming back. We’re also closing one of our branches. On the other hand, we are now a dual-line distributorship, having been permitted by NACCO to take on Yale in addition to Hyster. We will focus on sales training to handle both lines, which should help with our market awareness and market coverage. There should also be pent-up demand that will break loose. We will have inventory available to satisfy that need for our customer base.”

FORECAST: Level
LESSON: It’s possible to both “play to win” and “play not to lose” at the same time. Some areas require aggressive risk-taking and others require responsibility and discipline.

Material Handling Equipment Distributors Associtation