New Jersey-based lift truck dealer expands on family-built foundation.
The roots of A.J. Jersey can be traced to a small material handling company in Flushing, New York, called Astorlyn Corporation. Patrick Rizzo and Peter DeMeo ran the business, which mostly provided rack and shelving to small manufacturing companies and the Manhattan television studios to store their film. In 1970, Rizzo and DeMeo split, and Rizzo saw an opportunity in New Jersey, a growing market. He opened Astorlyn Jersey in Linden, New Jersey, to sell forklifts, and in 1989 moved the company to South Plainfield. Following Patrick’s retirement in 1998, the company, now known as A.J. Jersey, is thriving under the leadership of his sons, David, president, and Steven, vice president.
As the company reaches its 40-year milestone, David Rizzo sat down with 1999 MHEDA President Sam Grooms, president of Hy-Tek Material Handling (Columbus, OH), to discuss how A.J. Jersey has evolved over its history and what to expect going forward.
Hy-Tek Material Handling
Sam Grooms: When did you personally become involved in the company, David?
David Rizzo: I worked part-time in the parts and rental departments during summers while in college and joined full-time in 1985. I originally had a sales territory and then became controller in 1992. I became president when my father retired in 1998.
Sam: Do you have any children in the business?
David: My son is 12 years old, so he has a while to figure out if he wants to come into this business. My brother Steven’s son, Mike Rizzo, is 26, and he’s our parts manager.
Sam: What imprint did your father leave on the company? How do you build on what he built?
David: My father’s basic theory was that you have to reinvest in the company to grow it. You can’t pull everything out without putting anything back in because the business will stagnate. A.J. Jersey grew a lot alongside Crown, our major manufacturer, throughout the 70s, 80s and 90s. The basis of that growth was the credo that you have to sell the piece of equipment that’s right for the customer. My father was known as a gentleman of the industry because he was a very genuine guy. He preached that honesty is the best policy. If you do something wrong, admit it. You’ll lose in the short term but gain in the long term. That’s worked for this company for 40 years now.
Sam: How has the company evolved over the years?
David: We used to have a sales manager who was also a draftsman, and he would do all the rack and shelving layouts by hand. Now we have our own engineer and much better technology. One big change is that our sales manager used to sit in an office, but now he’s out on the road. Shortly after making that change, we saw a dramatic change in the amount of forklifts that were sold—and the more forklifts we sell, the more of everything else we sell.
Sam: How do your sales break down in terms of forklifts versus other equipment, percent wise?
David: That depends on the year. But I will always say that we are a forklift sales-oriented corporation. Forklifts drive our market, and forklifts drive our salesmen. In a great year, 25 to 30 percent of our revenues come from new forklift sales, 50 percent from allied equipment and rack, and another 20 to 25 percent from service, parts and rentals. We are a full-service dealer, so we have to keep everything going.
Sam: What markets do you focus on?
Sam: When we’re in commodity businesses like both of us are, we need to differentiate from our competitors. How do you do it? How do you differentiate yourself from your competitors?
David: We consider ourselves sales professionals. Whereas a lot of the industry has gone casual, we generally show up on sales calls in suits and ties. Second, we run two crews in our service department—we keep our technical service and planned maintenance technicians separate and have done so for nearly 30 years.
Sam: Why do you do that?
David: It has helped us immensely in servicing customers and keeping our inventory levels manageable. We don’t need to fully stock all the vans with parts if they’re not being used for technical work. This strategy has also allowed us to keep our fleet tailored to the job, so we get better gas mileage. We have tougher trucks for the bigger jobs and smaller trucks for the lighter work.
|A.J. Jersey Inc. is headquartered in a 20,000 sq. ft. building in South Plainfield, New Jersey, about 30 miles from New York City.|
Sam: Are the PM technicians more entry-level while the more seasoned guys handle the breakdown maintenance?
David: The PM technicians have the opportunity to grow by taking our training and advancing into the higher-paying technician jobs if that’s what they want to do. However, not everyone wants that, so this gives those individuals an avenue as well.
Sam: Then it doesn’t pose any hierarchy problem that you have two levels. It’s not a matter of tenure and people getting promoted.
David: We believe in the Bill Parcells theory, that the right man for the right job will be happier than a person trying to do something they aren’t able to do.
Sam: So you must be a Giants fan, then.
David: Actually, I’m a Steelers fan.
Sam: Well, I’m a Browns fan, so hopefully we can continue this peacefully!
Sam: During the recession, we all had to make some changes in how we do things. How did you react?
David: We do a lot of business with trucking companies, and we used the trucking industry as a barometer for whether there would be a recession in New Jersey. When they started to slow down about three years ago, we knew it was coming. We focused on the food industry because a lot of the luxury businesses were struggling. Companies that service pizzerias were amazingly busy in the last two years because pizza is a cheap meal for families.
Sam: That’s interesting.
David: We really didn’t have to change our work ethic because the work ethic in our sales force is incredible. We have long-tenured guys on our sales force, so they know what they have to do. We don’t keep them on a short leash; we know when they’re not busy because they won’t cover their draw. The last two years have proven the value of diversity in products. Three years ago, we sold a lot of forklifts and a lot of rack. Two years ago, we sold a lot of forklifts and hardly any rack. Last year the rack came back. So it’s very unpredictable.
David: Yes. We separate our aftermarket sales; another sales group—our customer service reps—sells aftermarket. I want our main salespeople selling new equipment and getting new customers. We have a good goal and sales promotions based on new customers being brought in. They get more commission with a more diverse product mix in a month. So, we do have a highly compensated group here, and for the last 10 years, they have been winning a lot of awards.
Sam: Is winning awards a goal that you build your business around every year? Or do you just do your best and hope the awards come?
David: When our forklift manufacturer Crown first came out with incentive awards, we tried very hard to get one and struck out for a couple of years. Eventually, we decided not to worry about the awards. Once we relaxed and went back to doing our own thing, we started winning Crown’s Ascent and Summit awards. We won the James F. Dicke Pioneer Award, which is given to the top Crown dealer in the country. That year in particular we were shocked because we weren’t focused at all on award-winning. It’s a tribute to the employees. They push themselves really hard.
Sam: How do you communicate the goals you establish for the company every year?
David: At the beginning of each year, we review last year’s results and develop a plan. We never say, “If we don’t hit this target, we’re in trouble.” We just try to do as well as last year. If we have growth, that’s fantastic. Coming off the recession, our goals are primarily to maintain our market share, service the customer and immediately get into a bigger place so that we can grow even more in the next ten years. Our headquarters is 20,000 sq. ft., plus we keep our used and rental equipment and training center about a mile away in 12,000 sq. ft. Right now, we’re looking to move into a facility of about 65,000 sq. ft. to combine both locations.
Sam: What would you say will be your biggest strength as we come out of this recession?
David: We didn’t lay anybody off. We actually hired a few people in the last two years. We’ve been very fortunate to grow in the last year when many people haven’t.
Sam: Your biggest challenge?
David: To stay ahead of our competition in a way that maintains our profit. When the recession hit, everyone dropped prices, and we have never been a price-selling company. Our challenge is to figure out where our competitors are going and to take a step ahead of them. Another challenge will be to move into a new building.
Sam: What other challenges are facing your company right now?
David: Labor is a big challenge in New Jersey. Where is the young labor going to come from? We have a good system to attract young people and train them, but that volume of hiring has gone down. We have to come up with more creative ways to attract people into the material handling end of the service business.
Sam: Any thoughts on how to do that?
David: Getting young guys interested in working on forklifts is tough. For a long time, young people thought they were entitled to what they perceived as “better” jobs. They came into interviews saying, “What are you going to do for me?” rather than, “What can I do for you?” I think the recession has helped that a little bit because people are starting to accept the jobs that are out there. They are realizing that forklifts are high tech, and the wages being paid in the material handling business are very competitive. It’s still a challenge, though, to get technical labor in this dwindling job market.
Sam: What kinds of things have you done to recruit people?
David: My father used to invest in a local community college that had a forklift shop course. We would donate equipment to them, and kids would learn about us that way. In fact, one of my best salesmen is a product of that school. However, that has gone away due to lack of funding. Now we go to job fairs and meet kids who are going to technical school. We present them with an alternative to automobiles. We also hire a lot of friends of employees, and we give incentives to employees to attract new employees.
Sam: Do you use your Web site for informational purposes, or do you use it to drive revenue?
David: We do not use the Internet as a revenue source. Customers need a hands-on expert to tell them how our products can work for them. I don’t want to deal with the reverse logistics of returning a forklift someone bought online and wasn’t right. We can do just fine showing people our offerings on the Internet and steering them toward calling us about their needs. I don’t want to tempt people to go out-of-territory to sell. The Internet is great for companies that don’t have set territories, but we want to concentrate on central New Jersey.
Sam: What about for your existing customers?
David: Within the next 12 months, I hope to use an Internet-based parts ordering program because it will be helpful for customers. I want to be part of my customers’ solution, not part of their problem.
Sam: Do you ever have the need for example, to ship a shelving job out to somebody else or another territory? Do you ever partner with other MHEDA dealers in such a case?
David: Yes. We do a lot of out-of-state shipping and installing of racks and trucks. For any type of allied project, we use the MHEDA Directory to find a partner in another area. I always give last year’s directory to inside sales.
Sam: I just did the same thing.
David: That’s a great resource for trust and professionalism. Allied products can be tricky because you can get into trouble in states with unfamiliar regulations. It helps to have someone you can trust. We’re proud of our MHEDA relationships. The MHEDA label is on our invoices and our advertising.
Sam: One last question: What is the one thing that you want everybody to know about A.J. Jersey?
David: A.J. Jersey is a family-owned, customer-oriented, people-driven machine that never ceases to amaze me. Every year, I think we can’t do better, but every person in this company has pride. We’re not just here for the buck; if people didn’t like it, they wouldn’t thrive. At our holiday party last year, we honored our tenth 20-year employee.
Sam: That’s outstanding. There’s nothing like having a good stable work force.
David: We give a gift and presentation for each one. It’s an exclusive group that they’re in, and they like it.