Sunbelt Industrial Trucks understands both sides of the manufacturer-distributor relationship
By Steve Guglielmo
Everything about Bill Rowan and Warren Cornil’s partnership is rare. For starters, they own and operate both a material handling distributor, Sunbelt Industrial Trucks, and a supplier, Narrow Aisle, Inc. This gives them insight into the issues that both sides of a manufacturer distributor relationship encounter.
Furthermore, the two have been equal partners for more than 25 years, both having 50 percent ownership in each company. “Many partnerships are structured 51/49,” says Rowan, president of Sunbelt. “We appreciate each other and if we can’t agree on a course of action, we scrap it and try to find another solution.”
That teamwork has led Sunbelt to become one of the most respected brands in the forklift industry. Last year, the distributor was named a MHEDA Most Valuable Partner, one of only 22 distributors in North America to have achieved that distinction.
How have the two been able to maintain such a successful partnership for so long? “Warren and I agree on how to run a business and how we should treat our employees and customers,” Rowan says.
Cornil, CEO of Sunbelt, adds, “Bill and I have the same morals, ethics and upbringing. It’s surprising. He’s a city-boy from Chicago, and I’m a son of the South, but we are truly cut from the same bolt of cloth, just miles apart.”
Their partnership has led both companies to soaring heights. But to understand how the two have grown a five-person operation in an 8,000 sq. ft. facility to a MHEDA MVP with more than $35 million in annual sales, we have to start at the beginning.
A Partnership Begins
This long and prosperous partnership began by chance. Neither Bill nor Warren began their careers in the material handling industry. After graduating college, Bill began his career as a teacher and high school football coach in Chicago. After nine years, however, he began to search for a job in sales. “I broke into the forklift industry almost by accident. I had several sales opportunities with companies that were offering salary and small commissions,” Rowan says. “But forklift dealerships were paying 100 percent commission, so in 1980, I took a job at a small forklift dealership in Chicago that sold Komatsu.” That decision shaped the next 32 years of his life.
Meanwhile, in Texas, Warren Cornil had just left his job as a banker in Odessa, TX. Having been exposed to the forklift business by one of his customers, he moved to Dallas in 1979 to open a forklift company of his own. By 1981, Bill had tired of the long, freezing, Chicago winters and was looking to move to a warmer climate. “Bill called from Chicago,” recalls Warren. “He told us he was a Komatsu salesman and was looking to sell forklifts in Miami, Dallas, Phoenix or Los Angeles – anywhere it didn’t snow. We invited him for an interview and were impressed by his work ethic, ability and attitude. We offered him a sales position at the end of the interview.”
The two worked together for six years and formed a strong bond during that time. In 1987, they began Sunbelt Industrial Trucks as equal partners.
“I was in sales management before and understood the retail side of the business,” Rowan says. “Warren was experienced on the wholesale side and had the financial know how. Our duties were pretty clear from the beginning. We are a stronger team because of it – not just individually, but as a team.”
Getting to that point, though, was no easy task. The distributor started with five employees, including Bill and Warren. “We had $40,000 and 20 forklifts when we started,” says Rowan. “We didn’t even have a line of credit; we operated solely off of our American Express cards. But we watched every penny and we wouldn’t add staff until we absolutely needed them. After a year, we were able to demonstrate to a bank that we were worthy of a line of credit. You couldn’t do today what we did then.”
Sunbelt’s growth from a modest beginning to the well-respected institution it is today has been predicated on steady, organic growth. “In our first three years, each year we doubled our sales,” Rowan says. “We increased our employees slowly. We opened up in an 8,000 sq. ft. facility and then after five years we moved into a 25,000 sq. ft. facility. After another seven years, we moved into a 60,000 sq. ft. facility.”
As Sunbelt continued to grow, they began to expand their services as well. “One thing that held us back in the beginning was not having the funds for rental trucks. Now, that’s a major part of our business and a strong profit center for us,” Rowan says. “Initially, we were strictly a sales organization. Over time, though, we have developed into a strong service organization.”
All the while, Sunbelt has actively recruited and groomed long term, loyal employees. “We started with five people. One has since retired and three of the other four are still with the company. We’ve always tried to be a good place to work, and it has paid off. Our employees are our most valuable asset.”
That loyalty extends to suppliers as well. The company has been a Komatsu dealer since they opened up shop in 1987 and to this day remains one of the largest Komatsu distributors in North America. For 22 years, the company was exclusive with Komatsu.
Though the distributor has never done any acquisitions, they are constantly on the lookout for ways to supplement and grow their business. Two and a half years ago, the company became a regional master distributor for Big Joe Equipment. The most exciting news is the recent addition of Nissan to their product offering. Now, the dealer has product in all five classes.
“We have spent 25 years building the Sunbelt brand,” Rowan says. “We’ve worked to add suppliers who have an equally reliable brand. Adding new classes of trucks has attracted new customers, while still satisfying our existing customers.”
A second location was opened in Houston in 2004, and today Sunbelt has 82 employees.
As Sunbelt has grown, there has been a shift in the material handling market. Commoditization has become more and more commonplace. This has placed dealers in a precarious position.
“Manufacturers have pushed to make this more of a commodity business,” Rowan says. “This puts a bigger onus on the dealers to add value.”
Being a value added dealer is something that Sunbelt prides itself on. “We are big believers in doing things ‘the right way,’” Rowan says. “We’re easy to do business with. Warren and I are involved in the day-to-day operations of the company. We tell all of our customers that we are going to make mistakes. Some dealers promise to be perfect. We never over promise. But we do promise that if we make a mistake, we’re going to fix it at no cost to the customer. We accept responsibility and we run toward challenges, not away from them.”
Adds Cornil, “Our word is our bond. If we say we’re going to do something, we’re going to do it or die trying.”
Being named a MHEDA Most Valuable Partner has validated Sunbelt’s status as a value added dealer.
“We have been recognized by our peers, our competitors, because of our commitment to excellence for our customers, employees and suppliers,” says Rowan. “We aren’t always the lowest price, but that’s because we provide more bang for your buck. Let’s say we’re $2,000 higher than another dealer. Most people pay over 60 months. That’s $33 dollars per month, which is $1.58 cents per workday and 20 cents per hour. It’s easy to get the customer to agree that he pays better employees more per hour than others, so the same holds true for a better forklift company. Purchase price only matters the day you buy something. After that, it’s service and quality that matter, and we pride ourselves on our service and quality.”
He adds, “We stress that we’re big enough to handle all of your forklift needs, but small enough to be flexible. There are no ‘cookie cutter’ solutions. We design a plan for each customer and we give out our personal phone numbers so that we can be reached 24 hours a day, 7 days a week.”
That emphasis on service builds strong relationships with customers and ensures that they stay with Sunbelt for the long haul. “We have at least three people involved in every account: a technician, customer service employee and equipment salesperson. This keeps the lines of communication open and builds loyalty,” Rowan says. “We are old-fashioned in that respect. We are a shirt and tie organization and we believe in the basics. Being a successful salesperson is all about being a good listener, asking good follow up questions and being able to communicate. We practice that every day and are always looking to improve.”
In 2001, Cornil and Rowan purchased the exclusive manufacturing and marketing rights to the Flexi, an articulating, very narrow aisle forklift, for North, Central and South America. Most of Cornil’s time is now devoted to Narrow Aisle, Inc.
“There aren’t many folks who have the benefit of wearing both hats,” Cornil says of his involvement in both Narrow Aisle and Sunbelt. “It gives you an appreciation for the other guy. When soliciting business for Narrow Aisle, I tell them, ‘We’re probably the most dealer friendly manufacturer because we’re a retail dealer just like you. We know how you think, how you feel and why you have to have this part right now.’ Too many times, factories are buffered from the real world by their dealer network. We have the perspective to understand the relationship between consumer and dealer and we also have the unique situation of having to buy from other vendors. We know what we don’t like about vendors and we eliminate that from our relationship with our dealers.”
That perspective has given Bill and Warren an appreciation for the difficulties both sides face, and subsequently has led to excellent manufacturer/distributor relationships. “How important is a good marriage?” Rowan asks. “That’s essentially what these relationships are. Both sides have to be happy.”
Sunbelt stocks a huge inventory of OEM parts. “We are big supporters of OEM,” Rowan says. “As a dealer, we have five ways to profit. A manufacturer only has two: new equipment and parts. If we buy a non-OEM part, our supplier isn’t making money. And if they aren’t making money, they can’t support us with other programs, like marketing. We realize the importance of the OEM and a lot of that stems from our experience with Narrow Aisle.”
Having built a successful dealership from the ground up, Bill and Warren have now begun the transition out of day-to-day management. “We still enjoy what we’re doing, but we’re both 62,” Cornil says, though it should be noted that Cornil actually thinks of himself as 46. “After a heart transplant in 2008, I average my biological age with that of the age of my 31 year old heart.” (He encourages everyone to become an organ donor by visiting www.donatelife.net and registering online.)
A good transition program is essential to the longevity of every company. An Employee Stock Ownership Plan (ESOP) made the most sense to the owners. “One of the reasons we wanted to look at an ESOP was to reward our employees,” Rowan says. “Warren and I have been successful because we have had a terrific team. We are the coaches, but they play the game. They go out and do a terrific job. We feel that we should give the next generation management team the chance to have their own company, to be part of the fun, the challenges and the agony of ownership.”
There are three key partners involved in the transition process: Joe Nolan, the company’s controller; Matt Maddock, a salesman who has been with the company for 17 years; and George Munford, the operations manager who has been with the company for four years.
“I’m looking forward to watching this place even when I’m not here anymore,” says Cornil. “It’s cool to have started something that will outlive us.”