Still in style

Akron Bearing believes old-fashioned principles still apply today

by Rich Vurva

Akron Bearing Company president Pete Kalgreen learned an important lesson from his grandfather that he remembers to this day.

“Grandpa always said, ‘You can’t do business from an empty cart.’ You’ve got to have inventory,” Kalgreen recalls.

Despite changes that have taken place since Ralph Jones founded the company in 1940, Kalgreen steadfastly adheres to many of the same business principles he learned from his elders. While embracing newer technology such as computerization and Internet access for all salespeople, he figures old-fashioned notions such as taking care of employees and customers, providing friendly, personalized service, and treating every customer with respect are ideas that will never go out of style.

You can’t do business from an empty cart
Lesson No. 1 concerned maintaining proper inventory levels. Akron Bearing stocks an extensive inventory of bearings, power transmission and related products focused on the MRO market. Customers range from farmers to food manufacturing facilities, auto repair to auto manufacturers, and one-man job shops to large manufacturing plants in Northeast Ohio.

The company competes against national chains by belonging to IDC-USA, the member-owned co-op of bearing and power transmission distributors, and stocking a wider range of inventory, including hard-to-find items and in-between sizes.

“A lot of people say if a product won’t turn over four times a year, they won’t stock it. If we sell it once a year consistently, we’re going to stock it. Some day, someone is going to need it,” says Kalgreen.

Executive vice president Mike Fickes, Kalgreen’s cousin, says the company’s reputation for having a broad inventory is one of the primary reasons this under $10 million a year distributor competes against much larger companies. Where the national chains maintain mostly fast-moving A and B items in their local branches, Akron Bearing stocks a smaller amount of A and B products in order to also carry C and D items.

“Going head to head against big box distributors, we’re not going to beat them in a price war. But we will beat them just by having a better inventory,” Fickes says. “We have very broad inventory and they carry very little at the local levels. When your maintenance department is down and you need something now so you can get it fixed, you’ll come to us.”

The customer is always right
A second important lesson that current managers learned from their predecessors was that the customer is always right. Unfortunately, customers don’t always know what they need. Having an experienced, knowledgeable staff who learned the business from the ground up helps put those customers at ease.

“When people call with strange problems, they may not have a part number or they’ll have only a partial part number. Or their terminology can be different. Our customer service people are almost like detectives, searching for the right parts for the job, and in time to keep the customer running,” says Kalgreen.

Akron Bearing employees average more than 15 years of experience. All outside salespeople must prove themselves in inside sales before moving up. Customer service reps have completed customer service training courses to equip them for dealing with customer issues on the phone and in person. Managers are family members who started at the bottom, grew up in the business and still put in long hours.

“Since we are small, we are flexible and can react quickly to customer needs,” says Kalgreen.

Some customers want dedicated inventory held on Akron Bearing’s shelves, while others seek help managing their storeroom. Some prefer name-brand, top-quality products, while others desire low-cost imports.

“We are able to cater to our customers because we are nimble,” Kalgreen says.

Friendly service will never go out of style
Salespeople commonly make personal deliveries to regular customers who want to avoid paying freight charges. Experts might say using salespeople to make deliveries is not the best use of their time. But since it’s getting harder for salespeople to get in to see customers, making deliveries is an easy way for them to get in the door. The company also provides emergency after-hour support to customers at no extra charge.

“If a customer calls after hours and you have to send a salesman, most people charge a $100 opening charge. If you’re one of our regular customers, we don’t have an opening charge,” Kalgreen says.

When customers complained about the automated voice attendant installed in an effort to enhance customer service, managers responded by eliminating the technology. Today, phone calls are answered by a real person who identifies himself or herself by name.

Sometimes, satisfying the customer requires creativity. “We don’t do repairs or machining, but if a customer needs something that’s on the shelf and it’s just a matter of swapping the insert, we’ll do it,” says Kalgreen. Why make the customer wait a day or two for a supplier’s shipment to arrive when a little creative thinking can get him what he needs today?

Treat all customers with respect
A steady stream of counter traffic demonstrates the company’s commitment to serving customers of all types. Counter salespeople are just as eager to help the do-it-yourselfer who needs a bearing to repair a lawn mower or a boat trailer as they are to wait on a maintenance man from a local manufacturing plant.

“Our customer walking in off the street knows if he needs a lawn mower belt, he can get it from us now instead of going somewhere else and ordering and waiting a few days. Typically that’s what people are looking for,” says Fickes.

Some distributors discourage counter business by charging inflated margins. They don’t want the bother of handling low-volume business. Akron Bearing encourages counter sales.

“We have more counter trade than most people in our business. We encourage cash sales,” says Kalgreen. “You never know when that little guy who comes in here to fix his lawn mower might own an HVAC company. When you treat everybody well, it creates good will. We believe in helping everybody.”

Use vendors you can trust
Another lesson Kalgreen learned from his grandfather was the importance of establishing relationships with top-quality vendors. Although the list of vendors is bigger and more international in scope today, the concept is just as important as it was 60 years ago.

“We have aligned ourselves with manufacturers that can provide us with the kind of service we need in order to give our customers the service they expect,” Kalgreen says.

Fast response time, the ability to ship emergency orders immediately and accurately are key requirements of vendors.

As a member of IDC-USA, the member-owned purchasing and national marketing cooperative of independent bearings and power transmission distributors, Akron Bearing benefits from greater buying power, plus shares best practices with fellow IDC members. The company earned the 2005 Top Dog Award for placing the largest amount of purchases with the IDC Distribution Center.

“Membership in IDC has given us access to a greater number of vendors, better pricing, plus access to IDC imported products. It enables me to give my customers more choices,” Kalgreen says.

By pooling purchases with IDC, Kalgreen avoids having to meet each individual manufacturer’s prepaid freight threshold.

“Not only do we save money by buying on prepaid stock orders from our co-op, but the IDC has negotiated very aggressive freight rates for members that we enjoy on all inbound and outbound truck shipments whether they are from the IDC or not. Our membership in the IDC has paid for itself many times over, and it’s only getting better as we get bigger,” he says.

All things old are new again
The industry has seen drastic changes since those early years when Ralph Jones started as a branch manager for the Ahlberg Bearing Company. He might not recognize the names of some of the suppliers, competitors and customers that the company he founded does business with today. But Grandpa Jones surely would be proud that the principles on which he founded the company are still important to the company’s owners today.

This article originally appeared in the September/October 2006 issue of Progressive Distributor. Copyright 2006.

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