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A Specialized Approach

Bob Frosio of Fastening Systems is always thinking strategy: how to grow his business, what to sell, and the best way to have product available for customers when they need it

By Bridget McCrea, Contributing Editor -- Industrial Distribution, 8/1/2006

Florida's booming housing market has created a lot of opportunity for residential contractors, and an equal amount of stress for the distributors who supply them with the materials they need to get the job done right and on time. No one knows this better than Chip Avery, president of Jacksonville, Fla.–based Avery Framing Specialists. A residential framing contractor, the firm is based in a growing area where demand for new homes continues to be high, despite the slowing overall housing market.

Purchasing power tools and fasteners is at the top of Avery's weekly “to-do” list, and to procure them, he's relied on a local industrial distributor for more than 10 years. Whether he's looking for pneumatic nailers, specialty saws or the thousands of dollars in fasteners that his company uses on a monthly basis, Avery says he always makes Jacksonville-based Fastening Systems, Inc., his first stop.

“The fact that they're dedicated to the framing subcontractor market means they always have the stock—even special parts,” says Avery, who also enjoys the level of customer service that the distributor provides.

When a new technology or tool resource surfaces, for example, he says Fastening Systems is always quick to jump on it, learn about it, and share that knowledge with its customers. “Their service is exceptional, and makes me want to come back to do business again and again.”

20 years of success

Founded in 1986, Fastening Systems grew from its founder's experience working as a direct salesperson for ITW Paslode. After finding his niche as an outside sales rep for the tool manufacturer, Bob Frosio, president, says he branched off—with the help of his former manager—and spread his entrepreneurial wings by starting his own distributorship.

Armed with years of hands-on experience and knowledge of Paslode's products, plus all of his existing custo-mer accounts, Frosio was able to start up his new entity fairly quickly.

“When Paslode went from direct sales to selling through distribution,” says Frosio, “I had the opportunity to start my own company, so I went for it.”

Over the last two decades, Frosio has grown his company organically by slowly adding locations and employees throughout the state of Florida. Today, the 80-employee company has 14 locations, including a 25,000-square-foot central distribution warehouse, a 15,000-square-foot showroom and warehouse, and a 10,000-square-foot tool repair facility in Jacksonville.

With locations in Ocala, Sarasota, Orange Park, Orlando, Tallahassee and other areas of the state, Fastening Systems sells collated nails and staples, nail guns, staple guns, air com-pressors, air hose and some power tools to residential and commercial contractors. The company, which has a dealer program through which it resells products that it distributes, also works with furniture, cabinet and pallet manufacturers.

Along with Frosio, other key employees include Don Rushlow, operations manager, and regional sales managers Danny Bender and Todd Knowles.

While he is expecting $25 million in sales this year (up from $24 million last year), Frosio says his projections are modest, based on lower demand for his firm's products and predictions regarding the economy and building industry.

“We budgeted for a slower pace this year,” says Frosio, “and so far, it's holding true.”

Turning points

Seven years ago, Fastening Systems was highly focused on the Paslode tool line the company itself was founded on. But when Frosio noticed that his firm's customers were using a technologically advanced process that Paslode didn't offer, he made a decision that resulted in significant sales growth for his distributorship.

“We were heavily entrenched in Paslode—and we still are—but the market changed from a 34-degree paper-taped nail to a 22-degree plastic, collated nail,” Frosio explains. “Paslode didn't have a delivery system for that nail.”

Knowing his customers would be asking for the new technology, Frosio added the Hitachi Tools product line of nail guns, staple guns, power tools and fasteners. The process was fairly seamless, since Hitachi, based in Norcross, Ga., was in the process of shifting its sales strategy to call on more distributors.

“At the time, we really weren't that familiar with Hitachi and the quality of the tool and the products in general,” says Frosio. “They started calling on us, and we said, 'Wow, this is just what we need.'”

Frosio won't soon forget that “wow” moment, which resulted in hefty sales increases for his distributorship, and a pool of satisfied customers who benefited from Fastening Systems' forward-thinking ways.

“It was the biggest addition to our product offering, and resulted in impressive sales growth for our company,” says Frosio, who estimates that the firm sold $7 million in Hitachi products alone last year.

Basic training

To ensure that each Fastening System employee is well versed in the ways of fasteners, nail guns and power tools, Frosio and his management team conduct regular training sessions at the company's home office in Jacksonville.

“Every employee gets run through a rigorous training program prior to starting,” says Frosio. “And I'm talking about everybody—not just sales reps, who are also required to attend ongoing sales training.”

As part of that sales training, the company recently held a session in Daytona for all of the company's reps. There, representatives from Mitsubishi introduced a new generator, and Buildex discussed the Gypfast nailing system, with both vendors bringing the distributor's sales reps up to speed on the products' features and benefits

According to Frosio, such events help educate the team on what's new and hot in the market, while at the same time creating a “team” atmosphere among the firm's geographically dispersed sales reps.

“It really helps us develop a team atmosphere and some camaraderie,” says Frosio. “That's been good for us.”

Frosio, who prides himself in running an organization that “does the right thing” by its customers and employees, says finding quality workers has been a constant challenge over the years—and one that's not likely to go away anytime soon. To keep the best of the best onboard, he strives to keep positions challenging and interesting enough to sustain the attention of the company's most ambitious, experienced employees.

That could mean creating sales incentives that get Fastening Systems' branches working hard to outdo their counterparts.

“We try to build competition into the sales arena, with one region competing against the other,” says Frosio, who recently upgraded his company's distribution software system to the latest Prophet 21 version. “It gives everyone a chance to earn additional income if they outdo specific margin goals, sell more of a certain product line, or just improve their sales in general.”

Service with a smile

As district sales manager for Hitachi Tools, Mark Ries calls on dozens of distributorships every week. When the time comes to visit Fastening Systems, Ries knows he'll always be welcomed with open arms.

Ries, who has been selling power tools, pneumatic tools, fasteners and accessories to Fastening Systems for five years, says the distributorship stands out on its quality service, prompt response time and ability to develop solid relationships in a highly competitive field. He says the two companies often work together to solve customer problems, whether that means troubleshooting a tool issue or introducing a contractor to a new product.

“Both Hitachi and Fastening Systems are quick to respond on quality issues and customer service-related issues. That promptness helps keep the customer base happy and coming back for more,” says Ries, who predicts continued success for the distributorship, which has been opening two to three new locations annually for the last three years.

Frosio concurs, and says that while past growth has been largely organic, an acquisition could be in the cards for Fastening Systems.

“We're always looking for opportunities in the marketplace,” says Frosio, who plans to add two to four more stores annually in order to create a $40 million company by 2010.

“That's our goal, and we're on track right now to meet that over the next four years,” he says.

 

COMPANY SNAPSHOT : Fastening Systems, Inc.

President: Bob Frosio

Headquarters: Jacksonville, Fla.

Founded: 1986

Employees: 80

Locations: 14

Product categories: Collated nails, staples, nail guns, staple guns, air compressors and air hose

Territory: Florida

Web site: www.fasteningsystem.com

Hurricane Strength

Operating in a state engulfed on three sides by the kind of water that tends to churn up hurricanes during the summer and fall, Bob Frosio knows that the “big one” could come at any time. Fortunately, even the active 2004 and 2005 seasons didn't directly impact any of his company's physical locations, although they did create significant shifts within Fastening Systems' customer base.

“You'd think we'd be affected positively, based on the fact that we supply materials to contractors,” says Frosio. “But it doesn't work out that way at all.”

Instead, an initial “boost” that lasts for a week or two, and is driven by the need to secure roofs and structures damaged by the storms, gives way to a lull.

“Our day-to-day guys who are usually out there framing and putting on trim and roofs get pulled off of their regular jobs to go after the high-paying storm damage work,” says Frosio. “We lose them for months at a time while they work in different areas.”

To accommodate the initial demand that comes after a storm has passed, Fastening Systems relies on two company-owned tractor trailers to transport goods from its central warehouse in Jacksonville to its branches. When Hurricane Charley hit Southwest Florida in 2004, for example, the company's Northport location dealt with a higher volume of business for several weeks.

“In that case, it was a direct hit on the area, so the demand was high for longer than it normally would be after a hurricane,” says Frosio, who doesn't take any special measures to stock extra inventory during the storm seasons. “We have everything we need, and if our trucks can physically get in there to deliver the goods, then the stores will get that inventory.”

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