On the move

Bluegrass Tool Warehouse uses a strong work ethic and deep roots to cultivate the Kentucky market

By Victoria Fraza -- Industrial Distribution, 3/1/2000

Products: Contractor supplies

Craig Austin remembers exactly when he started doing business with Bluegrass Tool Warehouse in Lexington, Ky. He remembers because it was a rather unusual occurrence. Austin is purchasing agent at Beacon Electric, an electrical contractor in Cincinnati, Ohio. It was about four years ago when Bluegrass Tool co-owner Steve DeMoss walked through the front door of Beacon Electric looking to drum up new business. Bluegrass was looking to expand into the Cincinnati market, about an hour north of its Lexington location. DeMoss's visit in itself was not unusual -- it was Austin's response to his visit that was out of the ordinary.

"It was a miracle because I don't usually see too many salespeople," notes the busy contractor, who was swayed by DeMoss's presentation. "I guess I just happened to be in the right mood."

While Steve DeMoss and his company may have been in the right place at the right time, luck has had nothing to do with their staying power. Today, Beacon Electric depends on Bluegrass Tool for a range of support materials -- nuts, bolts and screws, strut, blades, bits and other tools and related parts. Between the company's service and its pricing, Austin says he can't see doing business with anyone else.

Indeed, business is booming at this southern supply house. Sales have increased tenfold since Steve DeMoss and his two older brothers took the mail order tool company they founded in 1985 -- Bluegrass Tool Warehouse -- and merged it with their father's tool and fastener distributorship -- Jiffy Fastening Systems -- more than 11 years ago.

Today, the distributorship is known as Bluegrass Tool Warehouse, d.b.a. Jiffy Fastening Systems, and remains a stronghold in the central Kentucky market. Recent efforts to expand west into Louisville and up into Cincinnati have been successful, as well. While the DeMosses will not reveal financials, they say they have added 12 employees in the last 11 years to accommodate the firm's growth. In addition, they moved to a new, expanded facility on Fortune Drive in Lexington last fall. With 6,000 square feet of showroom space and 35,000 square feet of warehouse and office space, the DeMosses and their 25 employees should have plenty of room for continued success.

A family affair

Bob DeMoss founded Jiffy Fastening Systems in 1967. His three sons -- Jeff, 39, Kevin, 36, and Steve, 34 -- worked at Jiffy throughout school and joined the company full time after they finished college. While Bob DeMoss is semi-retired, he still calls on some accounts in eastern Kentucky, which keeps him busy two or three days a week. The women in the family are also involved in the business -- Julie Roberts, Bob's daughter, keeps the books with help from her mother, Mary DeMoss.

Jeff DeMoss credits his parents and grandparents with the strong work ethic that many say characterizes Bluegrass Tool today. He remembers getting off the school bus with his brothers just up the street from Jiffy and going in to help box up bolts and sweep the floors -- essentially doing "whatever Dad told us to do." Going further back in time, he remembers spending summers on his grandparents' farm 40 miles north of Lexington. The work they did there instilled in Jeff and his brothers an appreciation of hard work that has endured.

"Their father brought them up very well," says Hank Radican, a former Ridge Tool representative who worked with the DeMosses for seven years. Radican retired last year, but still works for Ridge as a consultant. "You can see it in how they handle their customers ... They are more than accommodating to the end user. I think that's a big factor in their favor."

One thing that helps Bluegrass in its effort to be accommodating is a fleet of 16 delivery trucks. It's not uncommon, says Kevin DeMoss, for the company to send three trucks a day to Cincinnati and two over to Louisville -- both an hour from the Lexington home base -- in addition to the ones kept busy locally. The company combines that capability with a comprehensive inventory and knowledgeable sales staff. All three things, say the DeMosses, have allowed Bluegrass Tool to grow and expand into new territories without opening new branches or warehouses.

"We've had a lot of people tell us we're the best supply house in Cincinnati and we don't even have a warehouse in Cincinnati," adds Jeff DeMoss.

Being an hour away from Bluegrass Tool has never been a problem for Austin at Beacon Electric. Bluegrass sends a truck out early in the morning so that Beacon and other customers have what they need when they need it. What's more, an additional delivery truck that leaves Lexington mid-morning enables Austin to make last-minute orders -- for items that may have been overlooked in the previous day's ordering. Austin says emergencies are common in the contracting business, so such service is an absolute must if distributors want to keep their customers.

That's also why Bluegrass Tool has taken on more inventory to support its customers in recent years. Even contractors with small tool rooms are looking to distributors to carry more of their inventory, says Jeff DeMoss. And the distributor that does the best job of that is the one that gets the business. What it gets down to is convenience. Having everything on your shelves when the customer needs it allows the customer to get everything he or she needs in one phone call, with one purchase order.

"You can't deliver from an empty shelf," says Jeff. "Our customers are accustomed to knowing they can make one phone call and cover a lot of bases."

Target audience

Roughly 80 percent of Bluegrass Tool's business is devoted to mechanical and electrical contractors -- the majority of which concentrate on industrial and commercial projects. The DeMoss brothers decided to focus on those trades several years ago, and have worked to tailor their product mix and services to both groups. The brothers say it didn't make sense to try and be everything to everyone, thus the need to focus on a particular market segment. Their decision was based on two key factors: mechanical and electrical contractors use large volumes of similar material, which meant little duplication of inventory, and Bluegrass/Jiffy had a history of specializing in many of the products used by both groups. It was a win-win situation. Developing expertise in those fields has been key to Bluegrass Tool's growth, notes Kevin DeMoss, and has been a strong factor in the company's mission to expand geographically.

That wasn't the first strategic decision the DeMoss brothers made together. They launched their mail order power tool business, Bluegrass Tool Warehouse, in 1985 as a way to help boost sales and buying power at Jiffy Fastening Systems. Although Jiffy -- which specialized in fasteners -- had a good share of the central Kentucky contractor market, the firm was not able to generate significant volume buying for electric power tools. A mail order tool company, which would increase the number of tools the DeMosses bought, seemed the perfect answer to the problem.

Not wanting to compete against Jiffy, the three brothers began selling tools outside the central Kentucky market -- to customers across the country. By 1988, Bluegrass Tool Warehouse had grown considerably, and merging the two companies seemed a logical step. Today, both divisions are run out of the same location, with Bluegrass still selling mail order tools to customers from California to New York. The mail order business has leveled off since the merger, and most of the company's growth has come from the local market.

Such efforts reflect Bluegrass Tool's mission statement, which goes something like this: To achieve growth for the company by continually providing quality products to customers when they need them, where they need them, and at a reasonable price -- which, in turn, allows customers to prosper.

For the DeMosses, that pretty much says it all.

"We come back to that pretty regular," says Jeff DeMoss. "We try to keep it simple. As long as we're doing these things, our customers are going to do well and we're going to grow with them."

This story was reprinted from ID's November 1999 convention issue for the Specialty Tools & Fasteners Distributors' Assn.