In a world of vendor reduction and the growth of large national distributorships, the small distributor today must set himself apart in order to survive. Whether it's focusing on niche markets, beefing up value-added offerings, or concentrating on personalized service, finding your "specialty" is the most important thing a small distributor can do today. Results from INDUSTRIAL DISTRIBUTION's survey of the 25 Best Small Distributors of 1996 show that the little guys are doing just that. Despite the growth of the mega distributor, the small distributor remains the backbone of the industry, according to Gary Buffington, executive director of the Industrial Distribution Assn. "I feel, and I think the rest of the industry feels, there is a very positive future for the small distributor," Buffington says. "The small distributor needs to identify a niche where they're not competing with the big guys."

  The following list identifies just a few exemplary small distributors. Through a questionnaire in our March issue, distributors with annual sales of less than $5 million were invited to nominate themselves for the honor. We also sought nominations from other sources, including associations, manufacturers and customers. Though many great companies were considered, regretfully, we could only choose 25. They were selected based on sales, inventory turnover, value-added services, employee training programs, and technology programs. They are not ranked in terms of performance, but are listed in alphabetical order.

  We realize that focusing on the small distributor is as important as focusing on the larger companies. According to Buffington, 65% of the 950 I.D.A. members have annual sales of less than $5 million. And according to the Small Business Administration, small businesses in general employ 54% of the workforce in the United States and represent 52% of all the country's sales. Even with such impressive stats, the small guys don't get much attention; that's why we decided to compile, once again, a list of the 25 best small distributors. Through our research, we found that these small distributors are counting on a bright future.

  "There'll always be room for us because we add product knowledge value," says Michael Smith, general manager of Todd Tool and Abrasives, a specialty house in Danvers, Mass. with annual sales of $2.6 million. "We're proud of what we know about what we do. The big guys are adding value in a different way. But when there's an application problem, when something breaks, when they need to know which tool, which product to use, we can certainly help [customers] there."

  The other small distributors featured in this year's survey agree that product knowledge, along with personal, friendly service, are the small distributor's trump card in this ever-changing game. Whether they're specialty or general-line houses, they pride themselves on knowing their customers and more importantly, on knowing what they sell--inside and out. That means cultivating good relationships with manufacturers as well as customers.

  Many of the companies selected have training programs run in conjunction with their major manufacturers which give them the product knowledge that insures top-notch service. Rod Rzezutko, president of Major Tool in Knoxville, Tenn., runs training sessions about five times a month for all his employees. Ever other Friday, Major Tool features the "toolroom schoolroom" in which manufacturers give presentations on a particular product and how it works.

  "That's the only way we can learn, by doing things together," says Rzezutko, whose specialty house saw $4.9 million in sales last year.

  Michael Workman, professor of Industrial Distribution at Texas A&M University, has just as much confidence in the small distributor as Smith and Rzezutko do. Small distributors are in a great position, he says, because buyers don't want to make all their purchases through integrated supply or systems contracts. In many cases, buyers still want to have local representatives calling on them, he added.

  "In particular, the small distributor knows the marketplace much better than some of his larger counterparts," Workman says. "Small distributors are excellent at fulfilling a particular niche. In my opinion, there'll always be room for the small distributor."

  We agree.

• Amarillo Bearing Corp.• The Angle Companies• Clark-McKibben Safety Products, Inc.• Contractor-Industrial Supply• Crown Screw & Bolt Corp.• Dorning Supply Co.• Frank Murken Products, Inc.• F.T.E. Industries• Harrold Industrial Supply• Jugenheimer Industrial Supplies, Inc.• Kamman Supply Co. • The Larry Dyer Co. • Major Tool Co. • Matis Inc. •; M.D. Larkin, Co. • Miami Industrial Tool Supply • Mid South Tool Supply Co. • Parrish-Keith-Simmons • Sealing Technology Co. • S&N Engineering Services • Thomas Industrial Products • Thunderbolt Industrial Supply • Todd Tool & Abrasives Systems • Tool Systems, Inc. • Youngstown Rubber Co.

Amarillo Bearing Corp. Amarillo, Tex.
Charles Canida, President
1995 Sales: $2 million
Employees: 7
Average No. of Inventory Turns: 5

Service is what sets this general line distributorship apart. “Anyone can have the products; you’ve got to have the service,” says Canida, whose two branch stores sell mainly to beef packing and chemical plants. The company was founded in 1984 in Amarillo (located in the Texas panhandle) and opened a branch in Bumas, Tex. — just 50 miles north of Amarillo — in October, 1990. Sales were steady in 1995, but so far 1996 looks better with sales up 10-15%, says Canida.

The Angle Companies
Elmwood Park, Ill.
Donn V. Cropper, President
1995 Sales: $2.6 million
Employees: 9
Average No. of Inventory Turns: 7.5

When Angle was featured in the Top 25 in 1993, Cropper’s motto was “We don’t look for sales, we look for customers.” Three years and $1 million in sales later, that statement still holds true. Angle has expanded by acquiring three distributorships since 1993, one of which is a specialty house that does repairs, calibration and certification of precision tools — a service that gave Angle a leg up on the competition. “Acquiring them made us the only full line distributor in this area to offer that service in-house,” says Cropper, whose company sells to the chip making industry.

Clark-McKibben Safety Products, Inc.
Erie, Pa.
Jack McKibben, President
1995 Sales: $2.2 million
Employees: 9
Average No. of Inventory Turns: 6

A customized software package allows Clark-McKibben to track orders from suppliers to customers to insure on-time delivery of products. The specialty house sells safety equipment in the Pennsylvania, New York and Ohio markets. “We try to do a lot with our computer, to be efficient and competitive,” said McKibben, who joined the 36-year-old business in 1974. Clark-McKibben also maintains an inventory management system for many of its larger customers, which McKibben says allows the customer to be more efficient.

Contractor-Industrial Supply
Northbrook, Ill.
Arnold Moschin, President
1995 Sales: $4.36 million
Employees: 13
Average No. of Inventory Turns: 4

A new software system allows cis to track ups deliveries, so that customers can be sure to have their orders just-in-time. The software is part of an ongoing expansion of the company’s computer system, which allows the general line distributorship to do more with less. “It gives us the ability to quickly and efficiently answer customer questions,” says Moschin. In addition to the delivery-tracking software, cis keeps track of inventory history for customers in an effort to better-serve them.

Crown Screw & Bolt Corp.
Indianapolis, Ind.
William K. Adams, President
1995 Sales: $3 million
Employees: 16
Average No. of Inventory Turns: 3.5

Continuity is the key to success for this fastener distributor. “The best thing we can say about ourself is we have extremely low customer turnover,” says Adams. “We’ve been selling to most of our customers for over 10 years.” Though the company’s name goes back to the 1940s, the current operation began in 1980. A key reason for that continuity is value-added services, such as maintaining an inventory management system for a select group of accounts. Future plans are to better serve larger customers by using bar coding and scanned order entry.

Dorning Supply Co.
Florence, Ky.
Bill Dorning, President
1995 Sales: $4.8 million
Employees: 14
Average No. of Inventory Turns: 12

Keeping up on state-of-the-art cutting tools is a major focus for this specialty house, which recently started a new employee training program based on that idea. Weekly Monday morning training sessions feature a particular product with instructions on how it works and how it can be made to work better; the goal is to be able to offer customers technical expertise on all products. “Our success is because the people have such product knowledge,” says Dorning . “And we want to sell the customer the best there is.”

Frank Murken Products, Inc.
Schenectady, N.Y.
Joseph Murray, President
1995 Sales: $3 million
Employees: 13
Average No. of Inventory Turns: 4

An early convert to EDI, Murray made his general line distributorship appealing to large potential customers — and many such as GE’s Schenectady and Waterford branches signed on as a result. Formerly a GE sales manager himself, Murray has since added bar coding and is considering a website and CD-ROM catalog. Sales have grown 250% during his decade of ownership, and after two flat years he attributes to downsizing at GE’s Power Systems division, he anticipates significant gains for 1996.

F.T.E. Industries
Des Plaines, Ill.
Perry Hunt, President
1995 Sales: $460,000
Employees: 4
Average No. of Inventory Turns: 3

“We’re just very service oriented; that’s the most I can say about our company,” says Hunt, who sells fasteners, cutting tools and electrical supplies in the Illinois area. The key to success is giving customers the service they want, says Hunt, adding that being small allows his company to offer more personalized services such as in-house assembly work. Though sales were down in 1995, a fact Hunt attributes to the economic climate, 1996 is looking better. In addition to a new computer system, the company is beginning to expand into the Wisconsin market.

Harrold Industrial Supply
Lisbon, Ohio
Steve Harrold, President
1995 Sales: $400,000
Employees: 2
Average No. of Inventory Turns: weekly

Sales have grown each year since this general line distributorship opened its doors eight years ago. Last year, sales increased by about 5%, but Harrold anticipates growth of 10% this year. The company serves machine shops and manufacturers in northeast Ohio, but recently started to break into the West Virginia market. The secret to success? Friendly service to their 85 customers. Working in the northeast Ohio market for 20 years is what’s helped Harrold develop that friendly rapport. “I’m not calling on 85 customers,” he says , “I’m calling on 85 friends.”

Jugenheimer Industrial Supplies, Inc.
Hubbard, Ohio
Richard Jugenheimer, President
1995 Sales: $4.9 million
Employees: 35
Average No. of Inventory Turns: 4.5

This specialty house has come a long way since it started in the basement of Jugenheimer’s father’s home in 1976. Since then, the fastener house has moved twice, and has already outgrown the 22,000 sq. ft. building it moved into three years ago. Value-added services such as inventory tracking and just-in-time delivery are a major reason for that expansion. Specialty work such as cutting finished nuts and threaded rod to the customer’s desired size is also a perk. “Whatever they want done to a fastener we’ll do,” Jugenheimer says.

Kamman Supply Co.
St. Clair Shores, Mich.
Bill Kamman, President
1995 Sales: $3.1 million
Employees: 8
Average No. Inventory Turns: 8

1995 sales at this specialty house were up an impressive 20% over 1994. The 53-year-old company sells cutting tools and abrasives to medium-sized customers in the Southeast Michigan area. But there’s no secret to its success, says the modest Kamman. “We capitalized on some good opportunities while times were good,” he says. The company added an outside salesperson in 1995 along with a new computer system. Kamman hopes to add another outside sales person in 1996, and other future plans include initiating EDI.

The Larry Dyer Co.
Sherwood, Ark.
Linda Dyer, President
1995 Sales: $1 million
Employees:10
Average No. of Inventory Turns: weekly

This cutting tool house suffered a tragedy in 1993 when Dyer’s husband Larry passed away. The two started the company together in 1978. After surviving for a while on what Dyer calls “sympathy business,” she made a serious change. “I said to our people, ‘We can close the doors today and walk away or we can make the business grow. It is up to you,’ and on that day, everyone made a commitment to the company,” says Dyer. With $1 million in sales, numerous systems contracts, and the possibility of a company website, the 100% woman-owned specialty house is thriving.

Major Tool Co.
Knoxville, Tenn.
Rod Rzezutko, President/Owner
1995 Sales: $4.9 million
Employees: 12
Average No. of Inventory Turns: 9.7

This cutting tool and abrasives specialist saw a 30% sales increase in 1995. Rzezutko credits his knowledgeable employees with the steady success of the 14-year-old company. Every other Friday all employees attend the “Toolroom Schoolroom” in which manufacturers or employees give presentations on particular products. “We talk about tools and how to apply them,” Rzezutko says. “Technical training is really the foundation for our success.” The company is currently in the midst of the ISO 9002 certification process.