Tips for a successful belting distributorship

Belting distributors say their success depends on making use of some key factors, including knowledge, experience and service

By Kimberly Griffiths, Associate Editor -- Industrial Distribution, 9/1/2005

Every industry has its fair share of successes—those distributors that know how to best work with the customers, vendors and employees. They abide by their best practices, and follow their company philosophies and agendas to the letter. Belting distributors are no exception—capitalizing on their own tenets, guidelines, rules and conventions.

Sharing those successful philosophies could be construed as hazardous to their own health, but some belting distributors took the time to share with INDUSTRIAL DISTRIBUTION their tips for a successful belting distributorship. And really, their tips could be applied to most any industry.

Founded in 1946, Binkelman Corp., a Toledo, Ohio—based full-line, industrial distributorship, started as a bearing company. Currently under the direction of Dan Kazmierczak, president, Binkelman is one of its territory's premium belting distributorships.

''In 1996, after having brought in power transmission and electrical motors and drives, Dan purchased a belting distributorship and a fluid power distributorship,'' says Brad Fitzgerald, Binkelman's vice president of operations. ''With those acquisitions, Binkelman completed its hose and belt inventory, and became a conveyor belt distributorship also.''

As an independent distributor, Binkelman is about diversifying its inventory, says Fitzgerald. The company advertises its complete solutions for customers, focusing on service relationships, and differentiating itself from the competition.

Considered a mainstay and a powerhouse in the industry, Fitzgerald says, Binkelman can ''definitely'' be considered a successful belting distributorship.

''When asked where to go for a belting distributor in the area, most people in the industry will say to come here,'' says Fitzgerald. ''Really, our knowledge is our calling card, as is inventory. We've got more than $500,000 in our warehouse, and have the ability to slit, cut to length, and perform light modification to our belts.''

Mike Fiedler is vice president of sales for Binkelman.

''The key to success also is quality suppliers,'' he says. ''We only offer high-quality product. We are considered component integrators, too. Our concern is how the components work together.''

''Another successful aspect of business is that we offer a full solution,'' adds Fitzgerald. ''If the customer uses this particular belt, they may use other products too, and we can supply everything for them—minus the frame.''

Dave Grana, Binkelman's product manager, credits the service staff, and takes pride in their knowledge.

''We spend time training people on the application, more than just the product,'' he says. ''And then we bring in more than the application, but also the interaction.''

• BINKELMAN TIP #1:
  ''Be sure you employ people who understand the industry,'' says Fitzgerald. ''They can talk the talk and walk the walk among the customers and more importantly, know the customers' operations.''
• BINKELMAN TIP #2:
  ''Inventories are important,'' says Fitzgerald. ''Like I said, we've got $500,000 in our warehouse. There's a shortage now, since so many distributors sold their inventory to cut down on costs. Therein, the demand is back and few can cover their orders.
  ''Our inventory puts us in a good position with customers, because we still have a lot of belt to sell,'' he adds.
• BINKELMAN TIP #3:
  ''You simply can not commoditize belt,'' says Fitzgerald. ''There are so many aspects as to how components interact, and premiere pieces are the best solution. That also makes it easier to go to market.''
• BINKELMAN TIP #4:
  ''Build and maintain your relationships with other service people for your installation work and your vulcanized work,'' says Fiedler.
  ''For us, our belting has attracted us to new customers, and we've generated a lot of sales because of that. Our partners help us maintain those customers,'' he says.

Going from $10 million in sales to $100 million in sales in 20 years is an impressive feat, and it is that act that perhaps solidified Lewis-Goetz and Co. as an indisputable success in the belting business.

Founded by Ben Gooding, Sr. in 1935 as Gooding Rubber, the company was family run for two generations until David Goetz, chairman, president and CEO, and Andy Lewis, now retired, bought it, taking over officially in 1985. Since buying the company, Lewis and Goetz have built it through acquisitions and organic sales increases, adhering to the company's philosophy of achieving the highest level of customer satisfaction.

Lewis-Goetz, headquartered in Pittsburgh, operates 20 stocking and fabricating locations, and sells heavyweight and lightweight belting; industrial and hydraulic hose fittings; conveyor system services; and gasket and fluid sealing products.

''As far as being a success, we always strive to do better,'' says Goetz. ''We have focused on the same products and solutions since 1935, and we are proud of that.''

• LEWIS-GOETZ TIP #1
  ''Have a lot of customers,'' says Goetz. ''I've been in the industry for almost 40 years and understand the manufacturer and distributor perspective, and this business is costly. I've seen distributors try to justify the investment, but it's a struggle to succeed.
  ''We have a large market though,'' he adds, ''and several locations. So to make that work for us, we only carry conveyor belt in a handful of those locations, dependent on the customers. Then, we count on our ability to move that around to other locations for specific orders. In order to turn your inventory, you need a big market and/or a network of several locations.''
• LEWIS-GOETZ TIP #2
  ''Foster a good relationship with a good manufacturer,'' says Goetz. ''We work exclusively with Goodyear on our heavy-duty conveyor belt. I started in the industry with Goodyear, before coming to work for this company to start up its conveyor belt department.''
  As part of that undertaking, Goetz knew that he would have to expand the company's product offering to include lightweight conveyor belt, ''but there was not a big enough customer base for it, so we couldn't justify the investment in slab inventory,'' he says. ''We do sell a significant amount of it, but only stock it for some customers and turn to Beltservice Corp. for the rest.''
  Beltservice Corp. is a fabricator of custom conveyor belting that sells its products through industrial distributors and original equipment manufacturers from seven full-service facilities across North America.
• LEWIS-GOETZ TIP #3
  ''Find a way to get rid of remnants. And really, no one will tell you how they do that,'' Goetz says. ''It's a trade secret to each distributor, because that is key.''
  Remnants, i.e., extra pieces of belt, are the leftovers that no distributor wants. Short pieces and narrow widths can significantly reduce profitability.
• LEWIS-GOETZ TIP #4
  ''Slab management is the business of the entire distributorship,'' Goetz points out. ''Managing where the belt goes, how it's used and the like. The key to the inventory is that slab management.
  ''Knowing where to draw the line between stocking belt or buying from a company like Beltservice is important, and a fine distinction,'' he says. ''Investing in slab inventory may make for larger margins, as the salespeople would tell you, but if you only turn it once a year, the margins aren't worth it.''

R.P.M., Inc., formed in 1969 by two power transmission specialists and one man with experience in conveyor belting, was founded on one strategy: to promote and sell power transmission products and conveyor belting.

''The primary belting focus was heavy black rubber products to the aggregate and foundry industries, and power transmission belting primarily to paper mills,'' says Bruce Baker, president and CEO of RPM. ''I purchased RPM in April of 2000, exactly the wrong time....[But] RPM appealed to me because of the value-added work done in the belting side of the business.''

One of Baker's first tasks after purchasing the distributorship was to create a team from management, sales and customer service to develop a strategic marketing plan. The team conducted a SWOT (strengths, weaknesses, opportunities and threats) analysis and identified the major markets they could serve. They prioritized them and developed product and service profiles for each. That plan is still in place, and has evolved, and the team still focuses its resources in that direction.

As for their success in the industry, Baker says, ''We have gone from 22 employees to nine in five years. Our sales have dropped more than 30 percent. Most of it can be traced to downsizing, plants moving out of the area, and bankruptcies. In spite of this, we are still here and are profitable. I guess you could consider that being successful.''

• R.P.M. TIP #1
  ''Service customers. Using our marketing plan as a guide, we have developed an inventory of belting materials that will meet 90 percent of the needs of our key customers,'' Baker says. ''We purchase our most-popular belting in slab quantities. This gives us the lowest cost for the product. We shop the vendors' remnants lists for deals on their odds and ends of specialty products. The goal is to meet that customer demand.''
• R.P.M. TIP #2
  ''We have developed a wide range of fabricating capabilities to support the belting inventory,'' says Baker. ''We cut material to the required length and width, and can install many different types of splices that allow the belt to be endless and run on a conveyor.''
  RPM's other fabricating abilities include attaching cleats and guides to the belt; and punching holes in it.
• R.P.M. TIP #3
  ''Our territory plans classify customers according to their potential, and their need to see us,'' adds Baker. ''As a rule, conveyor belts last quite a long time. They are not consumed in the process in which they run, like a cutting tool or abrasive. Therefore, many customers do not need a great deal of attention.''
  Baker cites the example of a small, fruit operation that may buy only three or four belts a year. The salesperson's goal is to make sure the operation calls when they need products, so he focuses on time and territory management, as well as product application knowledge. The salesperson is constantly looking for opportunities to improve the customer's processes, and save them money, says Baker.
• R.P.M. TIP #4
  ''Any distributor needs a solid operating system to be successful,'' explains Baker. ''Order processing, inventory management, purchasing and accounting all need to work together to allow everyone to take care of customers. A belting distributor also needs to be able to track all the rolls and cut pieces of belt they have in inventory. A good computer system is essential.''
• R.P.M. TIP #5
  ''Don't get complacent; know your customers; the only constant is change; try to anticipate the needs of your customers; and create services to fill those needs,'' lists Baker. ''Provide the goods and services your customers need at a fair price, supported by excellent service; and be forthright and honest in all your dealings. The same as any other business.''

By Kimberly Griffiths, kgriffiths@reedbusiness.com