Ties That Bind

In the early 1950s, Ferne Needels decided she should learn to drive. For lessons, she turned to her neighbor, Helen Hessley. Although neither knew it at the time, both of their husbands were in the janitorial supply industry. Everett Needels sold cleaning supplies while Gene Hessley ran a company that made them.

“When dad found out Hessley was general manager of Multi-Clean, he put a bug in his ear. My father told him he wanted Multi-Clean to make private-label floor finishes with the Needels company name,” says Roger Needels, who recently passed the presidency of the St. Paul, Minn.-based Needels Supply down to his daughter, Lisa.

Although skeptical at first — Multi-Clean had never been approached with such a request — Hessley heard Needels out. The men struck a deal and began a partnership between their companies that continues today.

Creating a harmonious bond between two mom-and-pop shops is perhaps not such a great feat. Maintaining that bond as companies grow and evolve, however, is something else entirely.

The days of family-run businesses may be numbered. While Needels Supply has endured into its third generation of family ownership, Multi-Clean has not shared the same fate. The company has undergone several changes of ownership in the past 50 years. Its current incarnation is Minuteman International.

“Every time there’s a change in owners there’s a change in people. You have to build new relationships, and that’s frustrating,” says Roger Needels. “But that’s just what happens now. The 30-year-old company is a dinosaur. Trying to build relationships is a battle now.”

Don Kellermeyer agrees. Toledo, Ohio-based Kellermeyer Co. has been family-owned since it opened in 1946.

“There’s a lot of consolidation and change of ownership,” Kellermeyer says. “The new owners often have different philosophies and attitudes. Every time there’s new ownership, things change.” The changes are not always for the better.

How can distributors and manufacturers develop and maintain relationships that can withstand the test of time? Those with experience say there are several important factors, including proximity, communication, teamwork, and always exceeding each other’s expectations.

Close to Home
It may seem obvious that nearby businesses should seek each other out to form working relationships. But there is more than just one simplistic reason to look for relationships close to home.

First, of course, is that it’s just downright easier. Minuteman International is just five miles from Needels Supply’s warehouse in St. Paul, which makes doing business less complicated and less expensive.

“Today everyone wants large quantities of merchandise and we have to pay freight costs,” Needels says. “With Minuteman right here in town, we worked out a plan that was favorable for both companies. Their biggest trump card over the years has been that they are a local factory dealing with a local supplier.”

When distributors run into the unexpected, it helps to have a local vendor to turn to in times of need.

“If we get a big run on equipment we can call over there and they’ll help us out,” says Kellermeyer of long-time supplier, NSS Enterprises, a Toledo-based commercial floor care equipment company. “They’ll fix us right up. If we need a product, we can run a truck over and pick it up.”

Needels has also used its geographical advantage to impress clients. He can pick up a Minuteman manager or chemist and drive across town with them to look at a customer’s floors.

“When I bring someone from the factory to the end user, that customer really sits up and takes notice,” says Needels. “The end user, the customer, is paying our salary and the factory’s profit.”

A local manufacturer is also in the unique position of being able to fully understand and appreciate the community’s culture and environment. This can only benefit distributors and their customers.

“There are a lot of companies in the Sun Belt that have not seen a drop of snow in their lives. They create products that work in their weather,” Needels says. “Minuteman can relate to the tundra and with all of the products that work in our weather.”

A local supplier might also be more aware of the distributor’s size and needs, and its impact on the local community.

“We’re not a big company. We’re a small, family-run business. We’re not going to sell tons, but we’re going to sell as much as we can,” Needels says. “Some manufacturers don’t understand that because they are in some other part of the country. We’ve never even seen their salesperson.”

Finally, being within close proximity of a manufacturer also provides a more direct link for communication.

“We can go to their chemists and sit down and talk with them one-on-one over a cup of coffee rather than all of this phoning and e-mailing,” Needels says. “We can talk face to face.”

Talk to Me
As with any good relationship, communication is the key to making a manufacturer-distributor partnership succeed.

“Manufacturer-distributor relationships last longer when the lines of communication remain open,” says Harry Pollack, vice president of National Chemical Laboratories in Philadelphia. “When an atmosphere is established that both sides have input into the other’s success, then the goals, objectives, and expectations for both parties remain realistic and mutual.”

That theory has proven true in National Chemical’s relationship with Master Chemical Products, a Wilkes-Barre, Pa., distributor. Problems rarely crop up between the companies but when they do, their belief in open communication has paid off.

“If there have been problems, they’ve always been easily reconciled,” says Joseph Mitchneck, president and owner of Master Chemical Products. “If we had a chemical not working or slow delivery, they were always situations that were easily resolved through good communication.”

Just talking to each other, however, isn’t enough. There has to be a real commitment on both sides to openness and honesty. Manufacturers must prove themselves to distributors by being up-front.

“[NSS] has always been honest with us,” Kellermeyer says. “When they tell us something they are going to do, they do it. If we need some help on some things, they are always there to do it. They don’t try to take advantage of the distributor.”

Whenever NSS adds new distributors to the market, the company quickly tells its other distributors, including Kellermeyer Co., so they won’t learn about the change on the streets.

“We were doing a lot of business with another supplier. They took it away from us and added another distributor without telling us first,” Kellermeyer says. “NSS has never done that to us.”

Manufacturers can also build trust by giving their long-time distributors the first opportunity to see and test new equipment. Over the years, many products and cleaning methods have come and gone (remember buffable floor waxes, 175-rpm machines, and free-pouring of chemicals?). Distributors may not remember every product that comes along, but they don’t forget the manufacturers who cared enough to get their thoughts on each new product.

“If NSS was introducing new equipment, they would let us see it first and test it,” Kellermeyer says. “Those are the things that make us want to continue to do business with them.”

Of course, trust is a two-way street. Distributors must do their part by being honest and proving themselves to their manufacturers.

“Don’t say something you aren’t going to keep your word on,” Needels says. “If you tell them you are going to pay your bills on time, then pay your bills on time.”

Such honesty can pay off.

“You build trust through your actions,” Kellermeyer says. “We have done such good business with NSS that they try to find us important customers. They have given us entree into a lot of profitable business through advertising and working with us for leads.”

We Are Family
In the end, the biggest benefit of a long-term manufacturer-distributor relationship is that two smaller companies become one larger team.

“We’re on the same page,” Needels says of his company’s relationship with Minuteman. “With some of our suppliers I get the feeling we are not on the same side. We’re not supposed to be fighting each other.”

There are no fights between P.B. Gast and Sons and Essential Industries. Their relationship goes back about 70 years. After all that time, the two companies are simply comfortable with each other, says Fritz Gast, president of the Grand Rapids, Mich.-based distributor.

“They look out for our best interests,” Gast says. The same can’t be said for every manufacturer, however.

“You can have things pop up that can take a relationship that started out pretty good and have it evolve into something adversarial,” Gast says. “It behooves the manufacturer as well as the distributor to find good partners.”

Over seven decades, P.B. Gast and Essential have definitely become good partners. In fact, the manufacturer has developed an unwavering trust in its distributor.

“We know that if P.B. Gast says something is an emergency, it is an emergency,” says Essential’s CEO, Dr. Michael Wheeler.

The two companies have certainly formed a team or, as Gast puts it, a “symbiotic relationship.” It has paid dividends for both over the years. For example, when a Gast customer called and said another distributor could not supply a last-minute product, the company called Essential, which had the product on the end user’s floor the next day.

“The result was a nice new piece of business for both of us which lasted for years,” Wheeler says.

When companies become a team, the focus for both switches from “What can you do for me?” to “What can we do for each other?”

Many manufacturers have approached Kellermeyer with the single intent of having his distributorship sell their product. As he says, “that’s not a relationship, it’s a one-way arrangement.” Those encounters only reinforce his company’s commitment to their long relationship with NSS, which “not only talks the talk but also walks the walk.”

“Understanding each other’s business means understanding and supporting each other’s position in the market,” says NSS’ president, Mark Bevington. “The position Kellermeyer works toward and the one we work toward are very complementary.”

Over time, another benefit of the team approach can develop — you start to feel like a large, extended family.

“Our families go back so darn far that you get to know them more as friends than as business associates,” says Gast. “It is like the kids you’ve known since grade school.”

When Mitchneck’s sister graduated from college in the 1960s, she was unmarried and living in an unfamiliar city. Pollack’s uncle invited the young woman to join his family for every holiday dinner. The connection was made, of course, through the relationship between Master Chemical Products and National Chemical Laboratories.

“How many times do you hear of that today,” asks Mitchneck. “The personal bonds are hard to break because you see the people on a regular basis. You know their families, you’ve met their spouses and children and they are just good people who you continue to do business with based on those bonds.”

Above and Beyond
Perhaps the most telling thing about these partnerships is the length to which each side will go in order to make it succeed.

For example, National Chemical Laboratories helped Master Chemical Products weather a storm — literally. In the summer of 1972, tropical storm Agnes paralyzed northeastern Pennsylvania. A week of intense rain left nearly 10 feet of water in the Master Chemical Products building.

The storm couldn’t have hit at a worse time. Thanks to its many school contracts, summer is Master Chemical’s busiest season. Its warehouse was filled to the brim at the time of the flood, which meant the company faced an incredible loss of inventory.

“National Chem Lab was willing to do anything they could to help us get back on our feet,” Mitchneck says. “How many companies would do that today?”

The manufacturer offered free merchandise to replace some of the ruined stock. And the company gave the distributor as long as it needed — nearly six months — to pay for the rest of the inventory it shipped to replace lost items.

That was not the only time that the manufacturer proved itself to Mitchneck. When he took over the family business in the 1980s, the company suffered through some growing pains.

During those rough years, the distributor experienced significant growth, but it coincided with cash flow problems. Although the company’s viability was never threatened, it did have to stretch payments to some vendors, including National Chemical Labs.

“That was one vendor that never flinched,” Mitchneck recalls. “They went out on a limb to support the growth we were experiencing. That’s another reason that you support those long relationships.”

The manufacturer has also offered training for Mitchneck’s sales and repair staffs. Kellermeyer says his employees regularly take classes at NSS. That’s just the latest way NSS has proven itself to Kellermeyer Co. The first was actually when the two companies were first introduced in 1950.

That year, Kellermeyer’s father attended the NSSA (National Sanitary Supply Association) spring show. He happened upon NSS’ display of single disc buffers. He was impressed and placed the minimum order of six units.

“About an hour later our major competitor wanted to make a deal,” Kellermeyer says. “NSS said no because they had already made a deal with us. At that time our competitors were probably three times our size. That tells me that they were a good company.”

Again, these relationships go both ways and manufacturers owe just as much gratitude to their distributors as the sellers do to their suppliers.

“P.B. Gast made our company possible. It originally counted for one-third of our company’s business,” says Wheeler, the third generation to own Essential Industries. “From the time I was very young I understood that P.B. Gast and all of our customers were the reason we had food on the table and a roof over our heads.” That level of appreciation says it all.

Becky Mollenkamp is a freelance writer based in Des Moines, Iowa.