Handi-Clean Products Acquisition Boosts Private Brands

Andy Brahms is a firm believer in distributors having their own brand. That’s why Armchem has always had a private label line. In fact, 80 percent of revenue comes from the sales of its house brand. But in late 2012, Brahms took steps to carve out a bigger slice of that revenue when he purchased chemical manufacturer Handi-Clean Products.

“Manufacturing your own private label really helps you create a lot of different revenue streams,” says Brahms. “There are always companies looking for great products.”

Armchem uses the manufacturing facilities to make products for non-competing distributors to sell. They also make more types of chemicals than they previously offered.

By bringing private label in-house, Armchem no longer has to pay manufacturing fees to a third-party. This allows it more flexibility in setting market competitive prices — and to keep more profit for itself.
To run this new venture Armchem hired a respected industry veteran who has proven himself in the private label industry.

Private label is just one way to create additional revenue streams. One of Brahms’ first answers to the recession crisis was launching two e-commerce websites selling commonly-used industrial commodities that practically sell themselves. Everyday shoppers search the Internet for the products and Brahms’ sites come up. Armchem employees just need to check the order and make sure they can ship to the location (sales are coming as far away as Uzbekistan). Within three years interest in these two sites has grown to generate $1.5 million in revenue annually.

“Building new revenue streams is paramount if you’re going to grow,” says Brahms. “Otherwise you’ll continue fighting people on low margins who practically give the product away.”