You'd hardly expect an MRO distributor such as Merriam, Kan.-based IBT Inc. to have a roster of customers including the Oprah Winfrey Show, the Boy Scouts of America or the History Channel.

But they're all clients of IBT's media services division, a sideline the company got into more than 25 years ago when it started producing internal training videos that has come into its own as a profitable division of the company.

It's an example of distributors branching out into non-distribution fields. INDUSTRIAL DISTRIBUTION spoke with a few such companies that have managed to spin offshoots into thriving business enterprises.

IBT's spinoff began in 1980 as a one-man, in-house training video production facility, says director of training and marketing Gary Hense—who was that one man for the first few years.

“We were very heavily into training. We thought of it as a great way to communicate to all 16 of our branches and communicate the same way to everyone,” Hense recalls. “In 1986, Warner Electric came to me and said, 'Hey, would you guys consider putting together a video [training] series for us and we'll pay you?'”

Knowing he needed to buy a new video camera, Hense thought the Warner project would provide the scratch he needed. To stay current with video technology you need to invest in new equipment every two years, he says.

“You've got to stay up on [technology]. If you don't, you're out of the business,” he notes.

Once the Warner project was finished, Goodyear Tire came along with a similar request, and before too long it was evident that the video production unit could be spun into a viable division of the business.

“After that we said, 'Hey, let's turn this into a profit center,'” Hense says. “It just kind of built from there.”

More than 25 years later, the video unit contributes upwards of $1 million to IBT's annual sales. In addition to such clients as Applebee's and the Boy Scouts of America, the subsidiary provides many of the exterior shots used for segments of the Oprah Winfrey Show, as well as the History Channel's “Modern Marvels” show.

And while a new, $400,000 high-definition video production suite will likely attract more high-profile clients, Hense says IBT's library of 20 years worth of stock industrial footage may be its biggest draw.

“We have a multitude of industries that we have all the video on,” he notes, adding that nowadays companies almost never allow anyone to film inside of factories or production facilities, whether to protect trade secrets or out of a fear of lawsuits. “We have a 20-plus year video stock library, which is gigantic in the industry.”

If you cut a branch from a rubber tree, apply some rooting hormone, plant it in new soil and tend it carefully, before too long you'll be enjoying a healthy offshoot from the parent plant.

That's an apt analogy for Rubber Tree Systems, a software company that began as a side project at Binkelman Corp., an industrial rubber and power transmission distributor based in Toledo, Ohio.

But Rubber Tree president Brian Kazmierczak says the company's name has nothing to do with the propagation properties of its namesake. When the time came to name the new entity, Kazmierczak looked around the office and saw its sole decoration—a small rubber tree.

“We kind of looked at [the plant] and said, 'Well, let's call it Rubber Tree Systems,'” he recalls. “It just goes back to the roots from when we started.”

When Kazmierczak started at Binkelman roughly five years ago, the company was searching for a better way to link its sales force with its ERP system. But there weren't any solutions on the market, so the company decided to create one.

“We wrote a piece of software that would scan our current ERP system for data—new orders, any type of different change that happened—the system would automatically push it out to a salesperson's Blackberry or mobile device,” Kazmierczak says.

The system worked well, so well that as Kazmierczak and others at Binkelman told their peers about it at trade conferences and industry events, they soon realized that other companies were facing the same need.

One was Mill Supply Corp., another distributor based in Salem, Ore. Vice president of sales Geoff Steelhammer says he was busy searching for a programmer to hire when he heard that Binkelman had already created the solution he was seeking.

“I was going to hire some IT guys to come in and design something similar to what Brian had already designed,” Steelhammer says. “So I flew to [the 2005 PDTA conference] in Las Vegas, and he had the perfect setup, and the timing was just perfect.”

Steelhammer says the experience of being Rubber Tree's guinea pig has been excellent.

“Brian's got some pretty good technology there that's really enabled us to decentralize our decision making, and make sure my sales force has access to timely information,” he says. “We've had our glitches just trying to integrate within our ERP system, but nothing that couldn't be overcome. That integration phase is a little difficult no matter who you're working with, and they were pretty much 'Johnny on the spot.'”

After the first sale to Mill Supply, however, Binkelman realized the inherent conflict in selling software to competitors under its own name, Kazmierczak says.

“We went ahead and sold that software [to Mill Supply] under the Binkelman name. Now that we had a customer, we couldn't continue to sell under Binkelman for obvious reasons,” he notes. “The main reason we did the spin-off was to focus solely on development. Being a part of Binkelman, we couldn't do that.”

Kazmierczak says the integration process is the most challenging aspect of Rubber Tree's business. It takes 12 to 18 weeks to fully mesh the sales mobilization software with an existing ERP system, he says.

But because there are a limited number of such systems, and Rubber Tree is rapidly learning the ins and outs of each, Kazmierczak expects integration times to drop dramatically as the business scales up.

The company is also launching a new product for power transmission product distributors, an online service that documents cost savings and value-added services called ptcostsavings.com.

“We've created a service to let the sales managers as well as the account reps and customer service reps at a distributor document those cost savings as they go,” Kazmierczak says, adding that the system also allows a distributor's customers to log on and review the data.

The main strength of Rubber Tree's platforms comes from the company's thorough knowledge of the distribution industry, he says.

“We're familiar with those product lines, we're familiar with the business [challenges], and that's what we're trying to solve,” Kazmierczak notes.

About 10 years ago, Jeff Pickelman, president and CEO of Northern Industrial Supply, realized that his power transmission products distributor needed a way to enter the higher-margin MRO market. About 80 percent of the company's business was in low-margin OEM supply, he says, with only 20 percent coming from the MRO market.

“We were having difficulty getting to MRO-type customers with power transmission products,” Pickelman recalls. “We needed a premise for looking outside our core business.”

That search led to the creation of Northern's Industrial Air division, which provides an array of compressed air products and services to manufacturers—and a foot in the door for the company's technicians, who are cross-trained in power transmission products.

“We've been able to get in and become a supplier of power transmission products to customers that we never would have been able to do, if it wasn't for them allowing us to provide their industrial air needs,” Pickelman says, adding that the company's technicians excel at providing individualized, personal attention to each customer.

“These technicians become very close to all the maintenance people [at their client's plants],” he notes. “I have techs that are so close to their customers they get invited to weddings, they get invited to birthday parties.”

Part of the reason for the division's success is the breadth of the services it offers. In addition to designing, installing and maintaining compressed air systems, the company also performs guaranteed audits of existing systems.

Northern Industrial's technicians will log data on an air system for up to two weeks, including a full 8-hour period when production is shut down but the air systems are left running. By measuring how often the compressors run with no production occurring, the audit reveals any inefficiencies in the air system.

“You're really testing for leakage,” Pickelman says, adding that the data is translated into a utility cost—the price the customer is paying in electricity and other utilities to power the air system when it isn't needed.

“A typical air audit will run between $3,000 and $5,000. We tell clients, 'If you do not see double that amount of savings in the first year, that audit is free.' The nice thing about that is it enables us to get in the door and sign periodic maintenance contracts.”

The largest challenge in establishing the air division, Pickelman remembers, was finding qualified employees.

“The biggest problem was finding the right people. We were fortunate that we had the opportunity of hiring a couple of the veterans of the [compressed air] industry to come in,” he recalls. “They really spearheaded the initial part of [the industrial air division].”

Today the company works with a local community college to train and hire graduates with associate degrees in HVAC engineering, he notes.

All the hard work has paid off for Northern. What began as a $300,000-a-year enterprise brought in $3 million last year, and an organization that once did most of its business in low-margin power transmission products now derives only half of its sales from that market.

“Industrial Air has become a significant part of our business,” Pickelman says. “It's close to 40 percent of our overall business. The rest is industrial supply.”