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By Richard Trombly | Industrial Distribution: May 2002 KBC Tools is concentrating on expanding its Canadian sales, but the border isn't the only line it crosses EVERYTHING IS DONE WITH
A CERTAIN FLAIR at the Mississauga, Ontario, location of KBC Tools. CEO
Paula Bass refers to it as her Canadian headquarters. "KBC sells on both
sides of the U.S.-Canadian border' says Bass. "We value all Of our
customers but we have made a special commitment to Canada." The new 50,000 sq. ft.
Mississauga warehouse consolidated the operations of ree Toronto-area
locations, creating the opportunity for increased efficiency in the warehouse
as well as the business functions. It also combines Bass'
artistic background with her affinity for business. Bass as a degree in
art as well as an MBA in marketing and finance. Prior to joining KBC,
she spent five years working at a large Chicago arts center. She designed
the warehouse building as she would a work of art. "We incorporated many
details into the warehouse," says Bass. "Wider aisles allow
or ease of movement -- especially with pallets. It also allows space for
growth." Some of the features include
white ceilings, which makes the area brighter while reducing lighting
expenses, warehousing based on a serpentine picking system, and areas
for fabrications and wiring machines to Canadian standards. To save on
costs and to recycle, KBC shreds the vast amounts of waste paper to reuse
as packing material. The new building allowed
Bass to unleash her creativity in the showroom, as well. She says showrooms
are important for KBC because nearly 15 percent of its sales are over
the counter. "People like to come
in and look around," says Bass. "It gives customers the opportunity
to be hands-on. With some things -- like precision instruments -- it's
important to get the feel of it." There are point-of-purchase
displays, comfortable places to sit and flip through the catalog, and
large machine tools on display. The room has a stylish color scheme and
a classy restored 1953 Ford pick-up. The walls are adorned with supplier
graphics and cartoon bubble captions. She says it is important to incorporate
comfort and a sense of style into the showroom. "The point of the
showroom is not necessarily to sell from the location, but rather to give
a sense of who we are," says Bass. "It is a sales prop. It gives
customers a chance to come in and 'kick the tires' or space and time to
sit down and think." By the book Branches form an important
point of contact for KBC because the showroom is where relationships are
formed, says Bass. KBC is a catalog house.
It does not employ any outside sales staff. This may seem unconventional
in an industry where distributors focus on the value added by outside
sales staff, but Bass emphasizes that she is still in a service business. Bass says the 160 KBC employees
are well trained in technical and product knowledge and customer service.
The company has a high rate of order fulfillment and low prices, she adds. "It means better service
for the customer," says Bass. "They don't have to wait for an
outside sales rep." Customers call when they have a question and the staff answers it, says Bass. If they place an order, the goods are there the next day. She says this business model is a convenient, efficient and expedient way to do business. "Customers have called wondering if KBC values their
business because we never send salespeople," says Bass. "We
explain that we are strictly a catalog house and we focus on providing
service, saving them money and letting them do their job." KBC has experimented with outside sales, adds Bass. She
found that outside salespeople are expensive and for KBC, it actually
reduced branch profitability. "Some outside salespeople are great customer resources,"
says Bass. "I think most distributorships with great outside sales
staff had founders that were great outside salespeople. If you've never
done it, you may not be great at managing it." KBC has also tried to work with independent reps, but
could not find the right relationship, says Bass. So it sticks to what
it knows best. People first Magnetic Radiation Labs of Itasca, Ill. is located near
a KBC branch. Purchasing manager Tony Renelli says the precision machining
company has built a strong relationship with KBC. "Unlike many catalogs, KBC is willing to stock what
we need," says Renelli. "If we need something immediately, we
can go and get it." Can a catalog house compete with the service offered
by full service distributors? Renelli says there are easily 15 or 20 distributors
from whom he could purchase the same items, but he says he enjoys the
relationship with KBC. "[The KBC staff] has a strong machining background
and can provide technical information, which is especially important on
non-standard items;' says Renelli. "They go out of their way to help
us." KBC invests in its people, says Bass. The company provides
customized training that allows employees to develop interests and individual
expertise. "We use video training, manufacturer-sponsored training
and the product training manuals produced by the Industrial Distribution
Assn.," says Bass. "We also have team meetings where we discuss
what to promote and how to sell certain products." At KBC, there is an atmosphere of friendliness and equality.
The managers often work alongside the staff and she, herself, often answers
the phones or lends a hand in the warehouse, says Bass. Many KBC employees have extensive backgrounds. Others
have no tooling training prior to joining KBC but were hired because of
great customer service skills and a willingness to learn, adds Bass. "We have a tremendous amount of respect for the
knowledge and skill of our customers," says Bass. "I will never
have as much product knowledge as the person on the other end of the line." Artisans of tool and die Time is very important to customers because every moment
costs them money, says Bass. Through the right products and service, she
says KBC speeds their processes. "Our customers are artisans of the art of tool and
die," says Bass. "We are selling the ability for them to continue
in the most expedient way." Most distributors concentrate their efforts on larger accounts and focus on larger industrial areas, says Bass. Catalog houses can service out of the way places and customers too small for other distributors, she adds. "We have some large accounts but our main focus
is the small to medium customer," says Bass. "We have many shops
that have only 20 to 50 employees." She says it helps her smaller customers that the price
is listed in the catalog. The price is the same for accounts of all sizes. For the Neilsville, Wisc., location of exhaust system
manufacturer Fleetguard Nelson, there are few local options. Maintenance
clerk Paul Mohr says the company relies heavily on mail order. "They are pleasant to work with and reliably get
us what we need," says Mohr. "That is important for us so we
order a lot from them." For Arnprior, Ontario-based Nu-Tech Precision Metals,
reliable delivery is also important, says purchasing agent Debbie Raymond.
The variety of over 100,000 catalog items is a big factor in her daily
purchases from KBC, she says. "We deal with other suppliers, but we have always
dealt with KBC," says Raymond. "The guys on the tool floor have
a tool allowance, so they all want to see the flyers. It gives them a
chance to upgrade their tools." The art of marketing Bass says targeting the marketing materials to the audience
and reaching out through multiple channels is important. KBC is aggressive
with targeted mailings and manufacturer marketing programs, she says. "From local hobbyists and small manufacturers spending
$500 a year, to large accounts, we send regular flyers," says Bass.
"We also maintain two catalogs and two Web sites -- with U.S. and
Canadian prices." The marketing efforts are a natural outlet for her artistic
abilities. It is also where some of her bold, outspoken manner comes to
the forefront. "I'm not afraid to speak up," says Bass. "When
one of our major competitors was giving out donuts, I started a campaign
saying we deliver deals, not donuts." The same competitor recently advertised its "newly
aggressive pricing." She says this left her wondering what kind of
deal it offered before. Cooperating with competition Although KBC competes with some of the large distributors
and other catalog houses, it sells to many of its competitors, from national
houses to small local distributors. "We don't want to own the world," says Bass.
"We want to be large enough to offer good deals on quality tools
and machinery while making a profit, yet small enough to be intimate." Being a smaller catalog business allows KBC more flexibility
in its relationships, says Amtek Tool & Supply president Jim Blankenship.
He says his Detroit-based distributorship has a valued relationship with
a master distributor, but for some things it is easier to go through a
catalog house. "KBC is not as sterile as other mail order businesses.
They take a personal interest in my business," says Blankenship.
"They are less structured in a good way, which makes it a pleasure
to do business with them." "KBC complements our efforts while keeping us on our toes," says Rapaport. "As a catalog house, they don't go directly against what we are doing." Tool Time is close enough to KBC to go there several
times per day when necessary. KBC also has long-distance relationships
with distributors, says president Jim Digiglio of Montreal-based Norvik
Tooling. "We have an excellent relationship similar to those
we have with suppliers," says Digiglio. "They know how we do
business and work with us to make the sale." He says dealing with KBC is valuable because it gives
Norvik access to many product lines and he knows the company will deliver
its promises. Promoting success KBC supports the products and marketing efforts of its
vendors through its flyers and in-store promotions, says L.S. Starrett
Co. sales coordinator Mac Christie. "Anytime [Bass] is involved with our promotions,
she adds her creativity and sense of fun to it," says Christie. Niagara Cutter national sales manager Joe Sarkees says
the company is committed to the small distributor but also values companies
like KBC. "Though distributors are our core, the channel has
evolved," says Sarkees. "Large nationals and catalog houses
have a role and KBC does its job well." Sarkees appreciates how aggressively Bass promotes products.
He says Bass came to him for advice on how to get the most out of trade
shows for KBC and its vendors. "[Bass] never hesitates to ask questions,"
says Sarkees. "She also listens and is willing to accept advice from
people who have experience." That outgoing attitude has also made Bass a well-known
individual within I.D.A. Though it may seem strange for a catalog house
to be a part of I.D.A., she says membership is essential. "It's an opportunity to network, make contacts and
take classes," says Bass. "I.D.A. meetings are a chance to evaluate
key product lines and get a sense of the industry." Canadian legacy Bass says when she first took over the business from
her father in 1993, she was concerned about the image she presented as
a woman business owner. "I am following my father's legacy,"' says
Bass. "But I didn't want the image that I was just running my dad's
business." The management team helped her to step into her role.
Bass' outgoing personality and individual style, combined with her business
sense, soon dispelled any concerns. Executive vice president John Earles built the business
with her father, says Bass. She and Earles collaborate and divide the
responsibilities of operating KBC, she says. "This allows me to concentrate on the Canadian business,"
adds Bass. KBC has been in Canada since 1989 and began by brokering
inventory across the border. She says the Canadian headquarters in Mississauga
is the realization of her father's last project in the business. "Canada now accounts for a healthy percentage of
KBC's sales and we expect it to continue to grow," says Bass. COMPANY SNAP SHOT
COPYRIGHT 2002 Reed Business Informationn in association with The Gale Group and LookSmart.
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