Single-store family distributor grows its niche in an evolving market.
Pooch—interesting name foran industrial, medical and specialty gases and welding supply store. Founder Frank Pooch thought it was a perfect name when he opened Pooch Welding Supply on June 1, 1975. Frank had started in the specialty gases and welding industry in 1950 as a truck driver for a local distributor and worked his way up the ladder over the next 25 years to part-owner and a company officer. However, at age 50, he felt it was time to start his own business. So with $30,000 in capital, a commitment from a few vendors, and two fellow employees from his previous place of business, Pooch Welding Supply opened in one-half of a 12,000 sq. ft. building in Benton Harbor, Michigan. By 1982, the company moved into the other half. A later addition increased the total service area to 13,500 sq. ft.
For more than 30 years, Pooch Welding Supply has been a good neighbor in Southwestern Michigan, maintaining a single store in Benton Harbor to serve the needs of a wide variety of customers. With its traditional industrial base shrinking, the company broadened its product offerings, even exploring niches unusual for a welding supply distributor, and has seen its sales figures rise steadily to become a multi-million dollar company. Every day, Pooch re-proves its founder’s assertion that there is still a place for the small distributor, even in an era of escalating mergers and acquisitions.
Family Business, Community Based
It’s no surprise that this philosophy led Frank Pooch to business success, says John E. Small, who joined the firm in 1980 and is Pooch Welding Supply’s president. “Frank had 25 years’ experience in the business when he started Pooch, so he had a good working knowledge of the potential customer base, and he had a lot of contacts simply from growing up in the community.”
Although Frank is no longer involved in the day-to-day company operations, he still comes in once a week to touch base. “He’s proud of what we’ve built today,” says Small. “We wouldn’t have been able to accomplish this without his insight and fortitude, starting from nothing at age 50.”
Frank’s daughter Debra joined her father and husband, John Small, in the business in 1984 and today is the company’s vice president. “Debra brought structure and accountability to our office operation,” says Small. “Along with her other responsibilities, Debra does a great job managing our accounts receivable. She oversaw the rebuilding of our showroom, making sure it was well laid out, lighted properly and maintained on a daily basis. Walk-in sales have increased significantly and we have received many customer and vendor compliments since the rebuilding.”
“Our Best Asset”
Pooch has remained a small family business, but its initial three-person staff has grown to 12 employees, most of whom have been with the company for more than 20 years, including Sales Manager Jim Krogel, who was one of Frank Pooch’s original employees. “We try to provide an excellent workplace for our employees, so when people ask them where they work, they can answer Pooch Welding Supply with a measure of pride,” says Small. “My door is always open, and if an employee has a problem, we try to take care of it immediately. Not having personnel turnover has been one of our biggest strengths. Our customers aren’t dealing with a different person every week, and that means a lot to them.”
To retain valued employees, Pooch still pays 100 percent of health insurance premiums for employees and their families, participates in the GAWDA life insurance program, and offers competitive vacation and compensation plans. “One way we stay strong is to listen to our employees,” says Small. “For instance, we don’t have ‘truck drivers’; we have route salespeople. The employee who drives our truck is the daily contact with the vast majority of our customers. He’s our eyes and ears, takes orders for the next week’s deliveries, and reports to me or our sales manager so we can react to any potential customer problem that might arise before it becomes a crisis situation. Our employees are our best asset.”
When it was founded, Pooch Welding Supply’s primary customer base was the local industrial market, and industrial customers are still 65 percent of the business. However, over the years the company expanded into new markets and positioned itself to take advantage of evolving ones.
“We all know what’s going on in manufacturing across the country. Michigan and the rest of the Rust Belt have been hit harder than many other areas,” says Small. “When I started here, there were 25 or more die casting companies in the area. Now only a precious handful are left.” Many of Pooch’s current customers are involved in light fabrication, and the company also works with larger companies that are tied to the automotive industry in the Detroit area.
Early on, Frank Pooch realized that they needed to do more to ensure the company’s future than rely on hardgoods sales, so in 1980 he invested in filling capabilities. Today Pooch has bulk stations in argon, oxygen, nitrogen, carbon dioxide and propane. Five years ago, the company invested another $175,000 to update the facilities.
Small describes the company as a full-range gas and welding supply distributor, offering all basic industry items as well as hand tools and power tools, which have proven to be a strong addition. Propane is also a “growing” portion of the business. Strong markets include agricultural customers (15 percent of the business) and medical customers (10 percent of the customer base, and growing every day).
“People are living longer, so the medical business is getting bigger for distributors in a lot of ways,” notes Small. “The local medical center has done a wonderful job of continually expanding to serve the community, and we’ve been fortunate enough to procure that business, so as they’ve grown, we’ve grown with them.” Pooch Welding Supply is actively seeking to grow its share of the medical gas market by targeting local physicians.
Seeking out and serving niche markets has led Pooch to develop a brand position that matches the company’s mission: Exactly what you need…when you need it. “As many distributors get bigger and bigger, they tend not to want to service the smaller users because they can’t afford to service that business,” Small says. “We believe we can.”
Pooch Welding Supply understood from the start that a strong community orientation is necessary for the success of any small distributor. Most customers are within a 50-mile radius of the company, and Small recognizes that satisfied customers are the best marketing tool. “This is still a relationship business, and you build relationships over a period of time. You can spend thousands of dollars advertising, but in the end, your best advertising is word of mouth, and you cannot put a value on that.”
As an example, Small recounts Pooch’s unexpected foray into dry ice two years ago. A major thunderstorm knocked out power in the area for several days, and a local resident called the store to ask if they had dry ice. They didn’t, but Small knew a rudimentary way to make it, so on a Saturday afternoon, he and Jim Krogel made 3,000 pounds of low-grade, compacted dry ice. “It’s amazing what you can do with a cryogenic hose, a couple of pillowcases, and 12,000 pounds of CO2,” Small laughs now. “One of our customers called the local radio station, and they said on the air that Pooch Welding Supply had dry ice. The next thing we knew, there was a line of people out the front door 100 yards long. People were so desperate for it, we were giving it away. We got phone call upon phone call after that, thanking us. We made a lot of friends that day.”
New Ideas to Existing Customers
Pooch Welding Supply knows the value of bringing new ideas to existing customers, so the company is always on the lookout for new product lines that fit within their existing markets. Currently, Small is considering a couple of nontraditional lines—electrical supplies and fire extinguishers.
“We try to grow sales dollars with our existing customer base.” he says. “We may have a customer who’s spending dollars with a catalog company or mill supply when we could supply the same or better item at a competitive price. If they don’t know that, it’s our job to tell them.”
It’s a strategy that clearly works. From 2000 to 2005, with a relatively flat industry, Pooch Welding Supply built a 30 percent sales increase. Though those numbers flattened somewhat in 2006, Small remains positive. “We ran a 2 or 3 percent increase in 2006, and if we can maintain those sales figures, we’re still going in the right direction.”
As the company moves forward, Pooch Welding Supply’s primary goal is to remain independent. Explains Small, “On the first day I worked for him, Frank Pooch said to me, ‘I firmly believe that there always will be a place for the small distributor if you’re in the right marketplace, if you do the things that need to be done, and do things right.’ And I still believe that. We’re still here some 31 years later, still vibrant, still growing. Whereas a lot of people have chosen to exit the business, we’ve made the commitment to stay.”
To continue that success, Pooch will explore new markets and reinvest in the company. Recent technology investments have included a complete upgrade of the company’s servers, workstations and software, and the installation of global positioning systems (GPS) in employees’ cell phones in order to better evaluate delivery routes.
In the final analysis, Pooch Welding Supply’s future success will rely on the same values that have driven its growth for the last 31 years. “We surround ourselves with good people, bring value to our customers, and take care of their needs,” says Small. “Customers realize that we’re honest, we’re here in the community, and we’re easy to do business with.”
With that kind of philosophy, there’ll always be a place for a strong and growing independent industrial, medical and specialty gases and equipment distributor like Pooch Welding Supply.