Contact details: 2215 Pacific Avenue, coma, WA 98405; Tel: 800-334-5769 or 253-620-2350; Fax 253-620-2359
Products and Services: General line office products, Mid-market furniture, printing broker
Territory: Continental US
Annual revenue: $10 million
No of employees: 25
Contact names and positions: Co-Owners Chuck Hellar, president, and Al Lynden, vice president
Company background: Chuckals started in 1994 with the idea of focusing on the small- to mid-size business market, using an inside sales team with a CRM system. Our secondary target market was the US Military. Our first year’s sales were $300,000, all in our county. This year we will do $10 million in revenue, 60 percent military and 40 percent commercial with 50 percent of that business outside of our state. Our goal was to build a small business that could deliver big box pricing with the care and commitment of a locally-owned company, and we remain committed to having a positive impact on both our employees and our community.
Stockless or stocking dealer: Stockless
Preferred dealer group: TriMega
Are you diversifying into non-traditional OP product areas? Which ones? How necessary do you feel this is for dealers today?
As a primarily stockless dealer, we have been diversifying into non-traditional products as quickly as our wholesaler has allowed. However we feel strongly that diversification should not become an end in itself.
Certainly it’s important to provide as much value to our customers as possible and make the most of every sales opportunity that comes our way. At the same time, though, we should not lose sight of the overall context in which we operate.
We currently go to market with a catalog that has about 28,000 SKUs, of which we sell about 4,000 on a regular basis. In addition, we share the majority of our customers with at least two or three other office products resellers. That means there’s a lot of potential in our core business that is going untapped right now and if we allow diversification efforts of any kind to divert us from making the most of our core business then we suffer as a result.
Which wholesalers do you use? Do you feel your relationship with your wholesaler could be improved in any way and if so, how?
Currently our first-call wholesaler is SP Richards. There are always opportunities for improvement, particularly in communications, not just between dealers and wholesalers but throughout the independent dealer supply chain.
In some ways what we do is one of the most boring things in the world — we move boxes from one place to another. But every time, we do that — as dealers, wholesalers and manufacturers — there are a few cents of profit that go along with those boxes for all of us.
And if we are to maximize that flow of profit, it’s critical that we all recognise not only the strengths that we each bring to the table, but also where the boundaries lie.
The manufacturer makes the product, the wholesaler handles distribution and marketing support and the dealer makes the sales and owns the customer base.
When each partner recognises the nature of the playing field where we operate and respects the lines of demarcation between our respective roles, we all benefit. When that doesn’t happen, we all suffer.
Do you source any product direct from the manufacturer? If so, what percentage? Do you plan on increasing this percentage?
We source very little direct from the manufacturer and have no plans to change that. We believe very strongly that any benefits we might pick up in terms of improved cost of goods will not in any way make up for efficiencies lost to our operating model. It would just detract from our basic mission and system. If anything, we would be inclined to do more with the wholesaler if possible.
What would you say has been your company’s best decision and what has been its worst?
Probably the best decision we ever made was to recognise the importance of committing to our system and as a result, going stockless and focusing on selling rather than purchasing as a way to grow our business. Our worst decision was back in the early days when we purchased a retail store full of dead inventory. The inventory stayed dead and we ended up closing the retail store.
How do you cultivate customer relations to ensure you are the first point of call for your customer’s OP needs?
The answer to that question is embodied in our system and in the way we are configured to have customer needs drive the business in a fundamental way. We are totally committed to learning as much as we can about the people we call customers and making that knowledge, embedded in our GoldMine contact management system, the heart and soul of our business.
It drives all facets of our operation, not just sales but delivery, accounts receivables and payables, compensation and more. Putting it simply, we couldn’t open in the morning without it!
How do you aim to differentiate yourself from other dealers?
It all comes down to a philosophy that puts a priority on developing a system to make our system work and a commitment to finding and developing top calibre people who buy into that approach and live it every business day.
What do you feel is the secret of your company’s success?
Simplicity. In a fundamental way, our basic model and our marketing methods really haven’t changed that much since we took over the business. Understanding the simplicity of what we do, focusing on our core activities and making sure we don’t get too carried away by distractions have been critical to our growth.
What do you expect to be your greatest challenges over the following year and how do plan on overcoming them?
It will probably turn out to be hiring and developing the people we will need to support our continued growth going forward. And again, the system has to provide the answer. We are constantly recruiting, training and motivating for superior performance and results and that, too, is a key part of our overall managing and monitoring system.
What are your priorities for the coming year?
Our top priority right now is increasing productivity. We are continually reviewing our technology infrastructure and looking for ways to remove costs and increase productivity per person.
What trends do you expect to most impact the dealer community over the next five years?
Clearly online sales in our industry are nowhere near their full potential. To me, that says we can expect more resellers to come into the market, in many cases, probably of a kind that we aren’t even aware of today.
I also think the boundaries between suppliers and resellers are going to become even more blurred than they are today and that’s not good news for the dealer.
And finally, we will continue to have to battle the small business prejudice that plagues our market. Too many of our customers and prospects think we can’t compete successfully against the big boxes because of our size. That is simply not true but we have to prove it’s wrong every day.