Yes We Can

Yes We Can

Distributors share
ideas and advice
for getting through
the economic slump.


There’s no avoiding the pinch of a global economic downturn that has driven customers large and small into “wait and see” mode, relying on their existing inventories of gases and hard goods as long as possible, and thinking long and hard about investing in any new capital equipment or other supplies. And let’s not forget that other small issue—getting them to pay their outstanding bills.

Despite the economic pressures, GAWDA distributors nationwide remain optimistic for the future, and are keeping their companies competitive by helping customers, reducing costs, motivating employees and pressing hard to generate sales.

Following is advice from the field on ways your fellow distributors are meeting the challenges of today’s marketplace.

It didn’t take long for Paul Rensing, president of Weld Plus (Cincinnati, OH), to recognize that the economic recession signaled a time to assess company operations and re-examine how they did business. “We had become order takers instead of salespeople,” he says. “Now we’re doing what we should have been doing the whole time—following up on information we sent out, tracking leads and quotes, just doing what needs to be done to maintain our level of business.” That includes helping idle customers find work because, “If they’re not busy, we’re not busy.” To that end, the company does extensive networking to connect customers looking for work with those that are thriving. “After years in the business, we know what customers do and who is good at what,” Rensing says. “When one customer gets a new project and they need somebody to sub work out to, we are there to suggest someone with the capabilities.”

Dave Teator, president of Ravena Welding Supply (Ravena, NY), says that to generate sales, his company is pushing to “catch as much as we can.” If there’s a product or service they currently do not provide, they immediately pursue it. “We have to make an effort on anything that sells,” he says. “We go out of our way to try to make the sale. No matter what it is, just try to do something.” As an example, Teator points to welder repairs. “If a welder needs a repair, we bring it in, get an estimate and fix it,” he explains. “We offer to pick it up and drop it off. It’s just customer service. We’ll work with the customer a little bit more.” Teator applies the same principle to receivables. If a customer is having difficulty with a payment, he arranges some kind of installment plan. “When you help your customer, you help the company,” he says.

“Consider bartering invoice for invoice. That can help reduce costs.”
Wayne Lemoine
Chicopee Welding & Tool
 
“Put extra time in and do whatever it takes to keep customers happy.”
Bill Wojcik
Metro Welding Supply
 
“Adding sales staff during a rough market can pay off.”
Bob Iverson
Ivey Industries
 
“Keep your people focused on the potential in front of you.”
Jim Wooldridge
Pacific CA Systems
 
“Be more on the ball, stay clear-minded and focused on results.”
Dave Teator
Ravena Welding Supply
 
“When customers communicate finance problems, we try to help them. But only to an extent. We’re not banks.”
Dave Mahoney
AWESCO
 
   

E. D. Shaw III, president of Shaw Oxygen Company (Monroe, LA), is generating sales by doubling efforts to knock on every door, looking after current customers, and making sales calls on competitors’ customers. Shaw has also enhanced sales commissions to boost the morale and productivity of his sales team. “We extended our commission to all our salespeople and have started paying them commission on sales that in the past they haven’t been eligible for,” he says. “I had to go into my pocket to get it, but I think it’s boosting them up.” Shaw is keeping a sharp eye on receivables as well. “I’m being very careful,” he says. “We’re not putting them out to third-party collection, but I am watching that they don’t get too far past due without me contacting the customer to see what the problem is. I don’t mind extending the payment if that helps a customer. I also don’t charge interest on past-due bills.”

Maureen Coburn, vice president of Bickett Machine & Gas Supply (Portsmouth, OH), also recommends negotiating with customers to help them make their payments. “We’ll definitely work with them,” she says. “For example, we had one customer who had lots of service charges, and we said, ‘If you get your bill paid at this amount, then we will credit out the service charges.’ They really appreciated our support.” To help the bottom line, the company has chosen not to invest in any new equipment or vehicles for the time being, and, thanks to a cross-training program already in place, is keeping employees productive. “When a person is hired, they learn all aspects of this company,” Coburn says. “They may be hired as a dock worker, but they fill the oxygen, acetylene and propane, or if they are needed somewhere else, they go.”

Metro Welding Supply (Minneapolis, MN) owner Bill Wojcik advises distributors to watch their expenses, not go overboard on major purchases, and ride out the economic downturn. “Watching every penny is the thing,” he says. “I’m on the phone talking to all my big customers, the people with the big projects, and putting feelers out as to what they see coming up. That’s how I know, for example, that one of my customers has a lot of power plant work coming in March and April, and when they get into those projects, they will buy a lot of equipment and supplies.” Wojcik also recommends consolidating deliveries—holding off on making a delivery to one part of town until two or three can be combined in one trip. “We’re also cutting back a bit on inventory.”

Along with freezing price increases in 2009, Advanced Gas & Welding Solutions (Eastlake, OH) kicked its sales force into high gear, hitting the streets hard while boosting existing customer support. “That’s what customers are looking for,” explains company owner Jim Mikus. “We’re seeing a lot of companies cutting back, but I believe that’s the opposite of what you need to do in a downturn.” Mikus’ company recently diversified its services, purchasing a welding repair facility on the assumption that, in a recession, customers would be more likely to repair existing equipment than buy new. It proved a wise move. “The repair facility has been pretty solid,” he says.

Knocking on Doors
Bob Iverson, president of Ivey Industries (Springfield, MA), increased his sales force. “We added another salesperson last year, knowing that the recession was coming,” he says. “A lot of companies, when sales are soft, will actually pull back on their sales department, which is not good.” Iverson also finds that during sluggish economic times, prospective customers have more opportunity to evaluate competitive quotes, making this a good time to drum up new business. “Now’s the time to get a prospective customer to give you another look,” he says.

Weld Direct Corporation (Jacksonville, FL) is capitalizing on the trend toward repairs over new equipment purchases. “We’re definitely doing more maintenance in our repair facilities than we normally do,” says company president Alex Bryant. But that isn’t keeping the company from continuing efforts to boost their visibility in the marketplace. “We’re getting out and knocking on lots of doors,” Bryant says. “We’re keeping our sales force informed of how the company is doing by posting the daily numbers. Once they get their numbers, they know what they’ve got to do.” But Bryant concedes that his business can’t survive a downturn through sales alone; he is reviewing how the company is spending money, checking every expense to make sure it’s necessary and working with suppliers on ways to control costs.

Cost controls are at the top of the list for Jim Wooldridge, owner of Pacific CA Systems (Yakima, WA). “We have revisited everything from coveralls to fuel consumption and idling time for trucks, cross-checking to make sure we’re running as tight as we can,” he says. “You can’t be afraid to cut back, and you can’t be afraid to make adjustments forward.”

Mike Massinople, CEO of Mabscott Supply Company (Beckley, WV), sees diversification as a valuable option for any business during harsh economic times. “We’re always looking for a better package of products to present to our customers,” he says, “a better way to weld, which involves equipment, newer technology, better use of gases—in general trying to make customers more profitable in their operations, which boosts sales for us.”

Adding a new product and enhanced service has become an important asset for American Welding and Gas Incorporated (Billings, MT). “We’ve gotten into home delivery of propane in our Montana group, which has been a great addition,” says Ron Adkins, president. The company is looking into consolidating trucking routes. “We’ve challenged store managers to review current cylinder routes and make sure they are operating at maximum efficiency. If we can eliminate a truck or two, we’ll do it,” he says.

In Houston, Texas, Greg Sanford, owner of Technical Alloy & Industrial Gases, is striving to offer more product lines and is closely tracking what his competitors are marketing, with the goal of offering the same or better. “We’re providing our customers a lot more technical information,” he says, “and we opened our own repair department. We’re trying to be a one-stop shop for our customers.” Sanford is adding more name-brand items to his inventory, particularly American made. “We’re experiencing a pretty big push toward American-made products,” he says. “Luckily, American manufacturers are trying to get down and compete with the other brands. When we have the same for the same, customers always prefer brand-name American.”

 

Austerity Measures
Dave Mahoney, president of AWESCO (Albany, NY), knows that recessionary times call for trimming the fat, and he has put his entire company on an austerity budget. “We’re watching our capital equipment purchases very closely,” he says. “If we don’t need it, we’re putting it off, which is just what our customers are doing. We’re also taking a look at our labor costs and watching overtime expenses very closely.” Mahoney is keeping a watchful eye on receivables as well: the company has standard payment terms of 30 days, but if a good customer is taking 60 days to pay, Mahoney will work with them. “But we’re certainly not working with anyone past 90 days,” he adds.

“Work smarter and beat the bushes a little harder.”
Ronny Ruyle
Tyler Welders Supply

 

“The biggest asset of your company is your people. Make sure they are working.”
Ron Adkins
American Welding and Gas Incorporated

 

“Stay on top of things in case competitors attack your accounts.”
Curt Towne
Depke Welding Supplies

 

“Take a conservative approach to managing receivables.”
Mike Massinople
Mabscott Supply Company

 

“When the boss shows a positive attitude, it will trickle down to the employees.”
E. D. Shaw III
Shaw Oxygen Company

 

“Keep your ear close to the ground and know who your customers are.”
Paul Rensing
Weld Plus

 

“Work together as a team and you’ll be able to get through it.”
Scott Stears
Midwest Welding Supply

 

“We’re just waiting for the economy to challenge us. We have a really good workforce, and we’re ready to go.”
Greg Sanford
Technical
Alloy & Industrial Gases

Guy Worden, president of Industrial Welding Supply Inc. (Salem, OR), is being highly cautious with purchases. “We always check between stores before ordering to see if we have the products elsewhere,” he says. “If we can transfer the product between locations, it saves time and money, and keeps inventory down.” Alternative sales strategies are also boosting Welding Supply’s bottom line. “We have a manager who does a great job selling on eBay,” Worden says. Any excess inventory the company has on its shelves gets listed on eBay and sold to free up the cash.

Midwest Welding Supply (Naperville, IL) has been working toward better turns on inventory by being more selective about what stays on the shelf and placing small orders more frequently. “We’re constantly looking for better ways of filling orders, shipping orders, and delivering products that will benefit our customers,” says President Scott Stears. He also is looking for ways of diversifying product lines, assessing the client base to see what current products can be sold, streamlining truck routes and boosting prospecting efforts.

At Chicopee Welding & Tool (Chicopee, MA), bartering for select supplies and services is helping business. “We trade services with several customers,” says company president Wayne Lemoine. “With truck maintenance, for example, because we provide vehicle repair shops with supplies, we will offset their invoices to cover our repairs, which saves us and them money.” Chicopee recently took advantage of major facility lighting and fixtures upgrades through an energy grant from the local power company, at no cost to Lemoine’s company, and which will save hundreds of thousands of dollars over time. “We’re also doing a lot of business-to-business trade shows in our area through the Chamber of Commerce, the International Maintenance Institute and other groups,” Lemoine says.

Curt Towne, president of Depke Welding Supplies (Danville, IL), notes that it is important to stay level-headed during these challenging economic times. “Knee-jerk reactions are short-sighted,” he says. “It takes extra effort to put things in perspective for the long term, so you don’t do something in the short term that will hurt you when things turn around.” Towne is taking advantage of historically low interest rates to rework debt that the company assumed as a result of expansion. He also is regrouping his sales force and connecting with his entire customer base—including the smallest ones—to make sure they are on top of purchases that need to be made. “We’re going to be out front and ready to discuss their options,” he says. He is focusing efforts on touting the value of personal selling over Web buying because “We bring expertise with us.” He strongly urges distributors to protect their accounts from attacks by competitors. “Defend what you have,” he says.

Ronny Ruyle, president of Tyler Welders Supply (Tyler, TX), is tightening up company credit with the goal of collecting receivables faster. “We aren’t letting people stretch us out like we used to,” he says. “Of course, we don’t want to be hard-nosed and set a certain date if the communication is there. We’ll work with them.” Ruyle motivates his sales force with small incentives such as store or restaurant gift certificates in acknowledgment of the work they’re putting in.


Ease Your Debt
Linda Slaughter, president of Gano Welding Supplies (Charleston, IL), points out that it is crucial to learn the lessons of this economic downturn and be prepared for the next one. “We’ve always run a conservative company, so we were pretty much without debt when the recession hit—and that’s a good place to be when you have to face something like this,” Slaughter says. She believes strongly that the reason the economy is in trouble is because many industries failed to stick to “the old rules.” She believes that competitive pricing is crucial, as is monitoring the lateness of receivables. “We’re keeping a closer eye on them and trying to make sure people won’t get too far behind. We’re trying hard to bring everything up to no more than 60 days.”

“Don’t wait too long to make decisions for cost savings,” advises Seaboard Welding Supply (Oakhurst, NJ) president Brian Nowell. “We made that mistake in the past. You must react fast to economic pressures, and that means getting good information and responding to it, even if it means making tough decisions.” This includes working with customers to assist them in purchasing supplies and paying their bills—although not at the expense of your business. “We set up personalized schedules to help customers repay their debt to us,” he says. “So if somebody owes us $800 and they don’t have $800, we ask them to give us $200 every week until it’s paid off.” Nowell adds that finance plans work well on more expensive products, where his company has experienced a real tightening of the belt by customers. “Watch your energy costs, and keep a sharp eye on expenses that come to you so regularly that you may not monitor them as closely as you should.” Nowell advises, “Knock 10 percent off the little stuff and it can add up to big savings.”

Bill Sergent, COO of Cryogas (Arnold, MD), suggests that people not be afraid to pass along the cost increases they’re incurring. “Don’t be shy about price increases, even though times are tough,” he says. “Also watch inventory levels, where a company can get a little bit fat, and reduce them wherever possible.” Sergent has been in the business for decades, and has experienced similar economic crises in the past—and survived them. “Remember that there were bad economies in the ’70s, in the ’80s and in the early part of this decade,” he says. “And trust me, there will be more in the future. If we all keep our heads and continue to work hard, we’ll come through just fine.”

Mabscott Supply Company’s Mike Massinople agrees. “Continue watching those expenses, keep your spirits up, inspire your team, and help your customer find a better way,” he says. “Do all that and you can survive any kind of storm.”

Gases and Welding Distributors Association