Survivor

What must Japanese distributors think when they hear their U.S. counterparts complain about battling through a stagnant economy? Yes, U.S. businesses are currently working with significantly smaller budgets compared to two or three years ago. Certainly, stateside jan/san distributors are working harder — and smarter — without necessarily enjoying the volume of revenue or robust margins prevalent in the boom ’90s.

But the story’s the same across the Pacific Ocean — with one significant twist. Japanese jan/san distributors are struggling through an economy that went south more than a decade ago. They would love the challenge of a short-term “stagnant” economy. Instead, the once-proud and dominant Japanese economic model is reeling from an inability to compete in the “new” economy and from internal government mismanagement. Japan 2002 is a mere shell of the economic infrastructure that dominated world markets for 30 years following World War II.

“By several measures, Japan’s slump is now worse than America’s was in the 1930s,” says a February 2002 edition of The Economist magazine.
And yet, the Japanese small-business community would tell you that the nation’s legendary business practices and marketing creativity are still alive and well. There are hundreds of grass roots business enterprises with success stories that fly in the face of all the doom and gloom emanating from the Pacific Rim these days.

One Distributor’s Story
The “B” in B-Future Inc. stands for Bright. And business prospects have been nothing but that since the Osaka-based jan/san distributor opened its doors 15 years ago. B-Future debuted as a cleaning contractor and six years ago entered the jan/san distribution arena with a bang that could be heard coast to coast. In fact, coast to coast is an accurate description of the B-Future sales/distribution market. From the condominiums in the northern island of Hokkaido to the supermarkets in the southern city of Hiroshima to Tokyo Disneyland and Narita Airport in between — few major Japanese cities are not in the B-Future distribution channel.

Looking for any edge it can get over the competition has helped B-Future prosper during the economic depression. Extraordinary service and a willingness to travel overseas in search of new products are two key strategies. B-Future’s size is best represented by territory, not business infrastructure. In fact it’s very similar to many of the medium-sized jan/san distributors that can be found in the United States.

B-Future has just two warehouses side-by-side in Osaka’s busy downtown. Sueo Saeki, director and CEO of the company, has a staff made up of two shipping managers, two language translators, one secretary and 12 employees who work on the contract cleaning side of the business. There is a small sales team, but Saeki and his son, who is the current president, take on most of the sales responsibility. There are three trucks that are used for cleaning supplies, another truck for product demonstrations and a remodeled mid-size bus that is used to transport customers and/or employees. In addition, there are three company cars used for sales. The company’s gross annual revenue is about $2.4 million (close to 300 million yen).

As new business is generated, Saeki attributes the girth of accounts not to a secret formula, but to simply providing faithful service to customers. “I’m loyal to my customers,” says Saeki. “I find out what they need, and I do whatever I can to make them profitable.”

Above and Beyond
Distributors always talk about service, but after close examination it’s obvious that Saeki makes sure his company does more than the status quo. “I started out as a janitor, so I’m not afraid of cleaning,” he jokes. When a large facility asks for product demonstration, Saeki leads the way, accompanying the sales team and even doing the cleaning himself. “Because I know cleaning, I can provide a lot of technical advice. We show customers how to clean effectively, and when we do a product demonstration we clean the entire area, not just part of it.”

When facility managers realize that the person giving the product demonstration is also the CEO of the company, they know that their business is important to B-Future.

“We provide 24-hour service to all our clients,” says Saeki. “They know that they can call my cell phone any time. Even if it’s midnight, I’ll go and help them.” A lot of Saeki’s customers do call his business in the middle of the night. Many facilities are too busy with heavy traffic during the day, so night is the best time for product demonstrations or maintenance requests. “A lot of the bigger companies aren’t willing to do night jobs, but we are,” he says. “I think that makes a big difference.”

Finding What Works
That B-Future employs two full-time language translators is evidence of Saeki’s commitment to international business. He enjoys traveling overseas to various trade shows so he can find new cleaning solutions for his customers. “For me, the International Sanitary Supply Association (ISSA) show in the United States is like the beginning of a new year,” he says. “I always bring my employees to the show so they can see the new innovations. Years ago, I started importing U.S. cleaning products because I needed something different than my competitors. We keep searching for something different.”

Customers notice Saeki’s commitment to quality service, and they also notice his commitment to quality products. When B-Future began as a cleaning contractor, the majority of cleaning professionals used only Japanese cleaning products. However, some of the products were not effective in certain facilities. Saeki attended his first ISSA trade show in Atlanta 11 years ago, searching for products that would benefit his customers in Japan.

“We weren’t happy with some of the Japanese products, so we started searching for better solutions,” says Saeki. “We found a U.S. manufacturer at the trade show that had exactly what we were looking for and we experienced huge profits because of the product’s effectiveness.”

At that time, B-Future was one of the first Japanese companies to attend the ISSA show and to bring foreign cleaning products back to Japan. Since that first transaction, B-Future has bought from several other foreign manufacturers and now has partnerships around the globe. “We buy from companies based in the United States, Canada, England and Italy and we have good relationships with all of them,” says Saeki.

Japanese distributors generally carry far fewer kinds of products than U.S. distributors — a difference attributable to the nation’s dense population. Japan has about 150 million people within its borders, a number that is nearly half that of the United States. But because the country is so mountainous, the majority of the population is crammed into a land area about the size of West Virginia. Just like the densely populated cities of New York or Los Angeles, there is usually increased business competition. Japanese distributors feel pressured to find a small niche in the jan/san industry. Those who try to supply a customer’s every cleaning need tend to be outdone by distributors who have specialized.

In the case of Saeki’s company, B-Future focuses on floor finishes and buffers. It’s an important market because Japanese buildings often have wood floors that need extra care. But even having a well-defined product niche gives little edge over competition. In Osaka alone, Japan’s second-largest city to Tokyo, B-Future has 18 major competitors — all jan/san distributors who specialize in floor finishes and buffers.

Customer Consideration
Saeki says that he wants his customers to think of B-Future right away whenever they have any need pertaining to floor care. “The most important thing is that we develop the products we buy, and we improve upon them with service,” says Saeki. He says that the company will not sell to customers who are also buying from other distributors, so that each relationship is solidified and not based on constant price-slashing and product-hopping.

“I want our customers to have a true understanding that we’re trying to serve them,” says Saeki. He gets frustrated when distributors and manufacturers use gimmicks to draw in customers, saying that it takes away from solid business relationships. Using the “green” craze in advertising has become just as popular in Japan as it has in the United States, and Saeki believes that, at least in Japan, its marketing tactics border on being dishonest. “I am disappointed that many distributors suddenly claim their products are environmentally friendly,” he says. “I think it’s wrong. Those chemicals should have been eco-friendly originally. Now, ‘environmentally friendly’ is a clever advertising slogan.”

Above other selling techniques, Saeki still values product knowledge the most and hopes that the jan/san business stays on course in that area. “Sometimes I wonder if our industry is getting away from being practical,” says Saeki. “I think that a lot of attention is paid to surface or book knowledge.”

Under Saeki’s leadership, B-Future continues to search out ways to help customers clean. Whether it’s through extra service, finding new products or working more with foreign companies, the company is learning to flourish despite the country’s economic upheaval.