Miami Nice
Sky Tool & Fastener Finds that, with a Thriving Economy, more Business than it can Handle, and Positive Word of Mouth, Life's a Beach
By Kimberly Griffiths, Associate Editor -- Industrial Distribution, 6/1/2005
It was a cosmic twist of fate really, that, for whatever reason, Sky Tool & Fastener didn't go up in smoke that week in 1980 in Miami. In a good-size industrial park, housing a significant number of industrial companies, Sky Tool went unscathed.
The infamous riots of that year raged through the area for a good seven days.
"For a week, we couldn't go in," says Gene Drody, president of Sky Tool. "We watched the neighborhood burn on television, and had figured that, with the insurance, we'd be able to just move on. But our building wasn't scratched. Everything around us was burned and looted. No one else was able to re-open in the area."
Drody could spend all day speculating on why his company was spared, but won't. He's got work to do.
A handshake dealSky Tool started out, as its name suggests, as an aviation supply firm close to the airport. The company's founders, Al Shepherd and his brother, bought trailer loads of airplane surplus tools from Boeing after World War II. That inventory consisted of air tools and air frame, sheet metal and the like, and customers enjoyed a kind of "you pick what you want, then pay" type of business.
Years into the enterprise, Shepherd suffered a heart attack, came back to the business too soon, and subsequently suffered a debilitating stroke. His wife, looking to retire them from the business, contacted some of their associates to buy the company.
"My father was a factory rep who called on them," says Drody. "I was selling aluminum. He called me about this opportunity."
One Friday afternoon in 1977, Drody and his wife bought Sky Tool on a handshake deal. That next day, Saturday, upon arriving to check out their new venture, the new owners set off the alarm.
"It was a tough couple of years, those early years," says Drody. "We were new at it, and we all had to work so much harder to make it successful."
The company's products then consisted mainly of power tools.
Having survived the 1980 riots, Drody and Sky Tool stayed in their same space for a few more years, until 1983, when the company bought a new space. The warehouse was emptied of its aviation metal inventory for 5 cents a pound, and the rest was packed up and moved.
"Of course, we had more square footage in the new building, but we miscalculated the space's volume, which had lower ceilings than the last place," says Drody. "We couldn't fit everything in, and the front area—a planned showroom—was quickly shrunk.
"That was fine though, since we aren't a showroom distributorship anyway. Eighty to 90 percent of our business goes out the back door."
Kicking and screamingIn 1992, Sky Tool began two big shifts in the company's focus: into fasteners and construction. Hurricane Andrew, having struck Florida with a vengeance that year, was a large catalyst to the changes.
"We were dragged, kicking and screaming, into fasteners," explains Drody. "There are just too many critical issues for a fastener. Too many options, sizes, heads and the like, and a lot of competition. We were afraid of them, didn't know much about them, and didn't understand them."
Why make the move into fasteners then? Customers began to ask the company to supply them, and Drody knew that if fasteners were what the customer wanted, fasteners were what the customer would get.
"Right now, our largest supplier is a fastener manufacturer," he adds. "Fasteners are easily half or more of what we do."
Those fasteners helped Sky Tool grow into another of its major markets, aluminum and shutter manufacturing and installation, and window manufacturing and installation.
Of course, a distributorship can not always live by fasteners alone, so Sky Tool continues to supply portable, electric, and pneumatic tools, but mostly electric, says Drody, with a big portion of those being cordless. Safety products also are in the building, including fencing, fall protection, ladders, lanyards and harnesses. Paint and caulking also, mentions Drody, although he laments the products' high maintenance and low profit margin.
"We're still the biggest Milwaukee and Makita distributor in town," he says. "We also do most repair work."
Danny Buitrago is district sales manager in Miami for Milwaukee Electric Tool, a professional portable power tool manufacturer. Buitrago has worked with Sky Tool for five years as its account manager, servicing the company he calls, "a company full of the most decent, trustworthy, honest people you could find to work with."
As a full-service Milwaukee distributor, Sky Tool, says Buitrago, "with its ability to stock and repair, is able to stand behind and back up the tools they sell."
He adds, "Sky is a good name locally, and is well known and reputable. Our relationship will only continue to grow, especially this year, with a new line of cordless tools that Sky will be taking on."
And though the name still proclaims a fondness for the sky, the company no longer carries any aviation products.
The power of word of mouthServices provided by Sky Tool include the already-mentioned warranty and repair, though for four or five companies as well as Milwaukee and Makita; delivery and pick up for select customers; and the front counter.
"Most of our customers are mobile—out and about all day," says Drody. "The front business is marginal. There's a huge gross profit, but it is high maintenance. I mean, we've got a guy who comes in, gets personalized service, and only wants eight screws. While at the same time 30,000 are going out the back door."
Manon Bouchard is operations manager at Gamma USA, Inc., a manufacturer of sliding glass doors and windows, and has worked with Sky Tool since she came to the company in 2001.
"This office opened years earlier than that though, and they've worked with Sky Tool since then, so as long as we've been in Florida, we've worked with Sky Tool," she says.
Bouchard cites a good working relationship and the ability to get products quickly as reasons why Gamma continues to patronize Sky Tool.
"A lot of times, my guys don't tell me we are out of something until it is gone," she says. "I call Sky Tool, and if it's in the morning, I usually have the parts that afternoon, but as a rule, I've always got the products by the next day."
Bouchard says that Gamma will continue to work with Sky Tool, as long as the companies are able to continue to grow together.
Another customer the company has worked with has used them on three projects in the area, and takes them on every one of his jobs.
"Word of mouth," exclaims Drody. "You can't find anyone by knocking on doors anymore!"
Hurricane season '05Distributorship living in Florida was pretty stable last year, some would say—that is of course, until an annual event called hurricane season came blowing into town. Florida was hit by a record four hurricanes within a couple months, leaving construction projects kicking it up into high gear, and distributors scrambling for products.
"Years ago, a law was passed that required hurricane protection on all new homes being built in the state," explains Drody. "Because of that, we became a fairly big player in the hurricane awning and shutter industry."
Most builders though sought to keep costs down by only installing hurricane panels because of the lower costs. After Andrew, says Drody, the industry boomed, then a few years later, became a bit complacent, with inventory dwindling down and companies dying off and dropping out of the trade.
"Even some of the major shutter companies were hurting," says Drody. "Three or four of them were in our top ten, and then they owed us money. Of course, we got a whole lot more from them this year than anyone bargained for."
Fasteners used for hurricane panels and shutters are in short supply, if any can be found at all. Sky Tool is almost out of screws, as are most everyone else.
"We just got a load of T-handles, and they're gone already," Drody says. "There weren't enough to begin with, but they were all we could get."
And while Miami was lucky to miss a majority of the hurricanes and their effects, Sky Tool is getting some trickle down business from other areas.
All about the weatherWith any number of construction projects going on in the city at any one time, the state of construction and fasteners is very good, says Drody.
"Business for shutters is on fire," he says. "That, and a new terminal going up at Miami International [airport], and new building throughout the city are indicative of the business. There are cranes everywhere."
The economic recession didn't really impact Sky Tool that much either. Growth in the city is huge, including both commercial and residential building, and shows no signs of abating.
"Geographically, we were isolated, and the main reason, in a word, is the weather," Drody adds. "They said that we'd never survive without gambling here. What a joke. We've got everything here, and it's all because of the weather."
Sky Tool certainly is benefiting from the growth of its surrounding areas, and has been busy keeping up.
"We're hoping to hold on to the new customers that come to us because their normal supplier is out of something," says Drody, "which is every distributor's nightmare. No one has everything all the time. So we do our best to take care of them, be there for them, and be their no-risk suppliers."
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