In 2012, Bob Purvis and Don Chargin launched the E-commerce site American Made MRO. The online company supports only American made products, assembled with American made materials using American labor. Industrial Distribution had the chance to speak with Purvis and Chargin about the endeavor: how it got its start, why they feel it is important, and where the venture is headed.
- ID: When did this idea for an American-made supplier site come into being?
Don Chargin: Bob Purvis and I have always tried to support Tier 1 Quality Suppliers (T1QS) and best-in-class American-made companies and products. We felt for many years - all the way back to the 1980’s during the dumping era of bearings - that we were at a competitive disadvantage against off shore 2nd, 3rd, 4th and 5th Tier manufacturers. The issue was that the market, and particularly the customer, did not seem to be too concerned. There was anti-trust litigation that was enacted, but has since expired now. We discussed over the years that this was a timing issue. As we continued to bleed jobs, as manufacturing plants bolted offshore, as the latest recession hit and as the staggering debt we have amassed as a country has risen, we felt that the timing was now. We firmly believe that the American people who have experienced a job loss, plant closure, or long-term unemployment or underemployment, have become keenly aware of what we must do to reverse this tsunami. We must support T1QS American-made products that are high in quality and that are competitive.
- ID: Was there a single turning point - or straw that broke the camel’s back - that caused the two of you to form this supply channel?
Bob Purvis: Yes! We have been working very hard on our philosophy of T1QS supplier support and development while ingraining the idea into our organization’s culture and our team members. We are realists and understand that we cannot obtain 100% compliance in this area, but we feel we have to start somewhere and that now is the time. We also are very concerned about the survival of the “independent” distributor channel. Consolidation and mergers & acquisitions by the national and multi-national corporations have caused irreparable damage to American manufacturers, American distributors, American jobs, and American-made products. We have tried since 2004, with little success, to form independent distributor associations, task forces, buying groups, etc. to address these issues. We just could not get every independent distributor on the same page. After countless meetings and dialogues, we felt that the way to attack this was to have one principal purpose: American-made products, by American-made T1QS manufacturers, using American labor and materials. This is how AMMRO came into being.
- ID: How did you make it happen?
Chargin: Logistically, we surveyed many of our suppliers and asked for their feedback on the AMMRO concept. It was overwhelmingly positive. We searched and acquired the domain name and advised all participants that they must comply with the American-made philosophy and that if they do not, we can omit those products from the AMMRO site and put them on our www.royalsupply.com or www.purivsindustries sites we were developing.
The first step was to internalize the concept, obtain lots of feedback from suppliers, customers, and internal team members. We have been working in eCommerce for many years – we have been in the business more years than we care to mention. We have watched the industrial distribution channel change from local inventory at the branch point with technical expertise and service to just-in-time overnight next day delivery (or, how we phrase it: JTL -Just Too Late). We have also seen the invasion of foreign products being dumped at prices that are significantly less than we can compete with while we continue to remain loyal to our T1QS distributor suppliers. We met with the executive team after we received positive feedback and agreed to move forward.
- ID: In creating this site and business model, what challenges did you face?
Purvis: One challenge we faced, as in any new creation of a business model, was time. We are both very busy with our core businesses. We sit on each other’s executive teams and boards: Bob and I have a passion for the business. We both started out as drivers and worked our way up to counter sales, inside sales, outside sales, district managers, regional managers, and eventually, to VPs and Presidents. We love technology and our AMMRO eCommerce site complements our bricks and mortar locations and our traditional eCommerce websites. Our independent distributor philosophy serves as a competitive advantage in this still very fragmented channel. Our philosophy is to have local inventory at the POS on the same day (not overnight JTL), local technical support, and an eCommerce strategy that enables AMMRO, our locations, and our Purvis and Royal Supply sites to reach customers locally and globally. The internet is the great equalizer for us.
- ID: Have you faced any resistance in the endeavor?
Chargin: Yes! Mostly from companies who do not manufacturer here. However, we have noticed many are considering, after careful evaluation of the true cost of off-shoring, bringing some of these products back. We are realists and know we are not going to get 100% compliance, but with American innovation and patriotism, and in light of the fact that our people are experiencing high unemployment and manufacturing losses, we believe that this is a great place to start. We see a lot less resistance from people as we add more suppliers to the site, as we tell our story, and as we provide an alternative to the brick and mortars for people through eCommerce.
- ID: What kind of reception has the endeavor met?
Purvis: We did a subtle internal launch last year with no promotion to see if the concept stuck. We have received orders and overwhelming support from suppliers wanting to participate. We have developed some proprietary software for our AMMRO site. We have very strong commitments to our T1QS suppliers. We have a model for a national contract business that we are rolling out that will give those contract customers additional options. Our AMMRO and other vertical sites will give these contract accounts choices. This is a very exciting program and will support our vision of maintaining relevance in a channel from which most independent distributors have been excluded. Having been involved in large contract accounts, often customers say it does not matter who gets the contract: you can just change the contract winners name on the outside of building because the companies bidding are all the same. This lack of innovation, differentiation, and dissimilarity is created by the contract winners by design and really hurts the customer in terms of technical support, application review, new product introduction, training, innovation and competitiveness. The AMMRO site and our physical locations, coupled with our outstanding people, will give this business and all customers a viable alternative.
- ID: Have people come out of the woodwork to support this and make it a reality, given the resurgent interest in American manufacturing?
Chargin: Absolutely: we have literally hundreds of suppliers who want to participate and support our AMMRO concept. The awareness of how important this is to our future is inspiring to us. We know this is not a sprint, but a marathon. We do not want to pollute the site or the channel with a lot of spam. We want it clean and easy to use. We have several distributors who want to participate, which we did not anticipate, and we are discussing that now and how to address that side of the project. We never thought distributors would want to join. It illustrates the universal acceptance of our model.
- ID: Do you feel like the timing of the launch has helped promote the site as we are hearing more about the re-shoring movement?
Purvis: Yes! Timing in life is everything. We have been discussing this for some time and just felt the stars were aligning to launch this initiative. Remember the Apple Newton was one of the first iPads launched in the 1980’s, and it failed. Now look at the Apple iPad and tablet market now: timing was all that was missing.
- ID: What kind of value do you feel this type of site brings to the industrial distribution sector & to the American economy at large?
Chargin: We want our T1QS brand suppliers “leading from the front” with us as partners creating value, share shift, and growth for our T1QS and customers. In addition we want to offer the national contract channel an alternative form their traditional contract process which will offer. We look at this as a win-win-win for our T1QS suppliers, customers, and our independent distribution channel. We also drive our T1QS suppliers brand and products internationally. One of the interesting insights we discovered are the amount of global customers that want our American-made products. We think this multichannel model will help create awareness, patriotism, jobs, and a brighter future for our country.
Learn more about AMMRO by visiting www.americanmademro.com.