By Cheryl Higley
Savvy snow and ice management professionals are putting their knowledge of the industry’s products to use on the supplier side, setting up dealerships and distribution avenues for everything from rock salt to liquids to equipment. Snow Business interviewed a few professionals who’ve made the jump to vendor status to get a look at the pros and cons: PROS Economies of scale
. Chad Oberson, owner of Oberson’s Nursery & Landscapes in Cincinnati, OH, made the practical decision to get into distributing bulk salt, bulk liquids and bagged product. “I needed to have more buying power.” Experience breeds new products
. Scott Zorno, CSP, owns Care Enterprises Snow & Ice Management and HighCountry Ice Solutions, and has been in the industry for over 35 years. After retiring from the aerospace corporate world, he put his engineering and liquid deicer expertise to work by creating deicer sprayers. “At SIMA Symposiums, people would ask me what equipment to buy. I had tweaked and rebuilt systems over the years and concluded that if I could make the same sprayer I used, it would fill a void in the market.”
Snow and ice management is 40% of Zorno’s business. Design, development and manufacturing oversight of the sprayer side is about 60%. The company now offers a complete line of sprayers from 68 to 2,000 gallons, plus sidewalk and UTV units. Feedback from peers and customers drives his designs. “All of our products are built from hands-on experience, not just an engineer sitting at a computer figuring what looks good,” Zorno says, adding that his clients benefit from strong confidence in the workability and durability of the product knowing “that we use what we sell.” Additional profits
. St. Jacques Family Enterprises in Windsor, CT, has sold liquids since 2001 and also offers bulk salt, brine and bagged deicer. Laurie St. Jacques runs this side of the business separate from her husband Bob’s Four Seasons Landscaping. The company sells about 22,500 gallons of liquid and 90 to 100 pallets of bagged deicer during a season. “It’s a nice add-on business,” Bob says. “You’re not going to get rich doing it, but it’s enough to make it worthwhile.”
He says Four Seasons is the company’s biggest customer and provides labor and equipment in exchange for better product pricing. Given this year’s light winter, the company was able to use Four Seasons’ staff to deliver liquids, load trucks, etc., rather than having team members sit idle. Expanding client base
. Bob says the company’s distributorship has opened new doors for Four Seasons. The State of Connecticut is a client, which led to Four Seasons being added to the approved list of snow subcontractors. Similarly, St. Jacques Family Enterprises sells liquids to the University of Hartford, which hired Four Seasons to plow and manage its salt supply. In addition, Four Seasons has been able to build a good subcontractor network from companies who purchase product. Small-town service
. Bill Minor’s company, IBG Magic of Kentuckiana, LLC, in Louisville, KY, distributes and installs Fisher, Buyers and SnowEx equipment as well as bagged and bulk salt, Ice B’Gone Liquid, Ice B’Gone Magic and Ice Proof Hot Brine. He says he started the business 10 years ago because no one was providing 24-hour drive-in/pickup material services during a storm in his market. As liquids have become more prevalent in his market, the company has been able to capitalize on that untapped profit center.
Minor says he provides services the bigger salt distributors can’t, such as reduced drive times for delivery/pickup; customers only paying for the salt they use (which frees up money); and easier inventory management. In addition, he staffs mechanics and parts for the products he sells to help customers whose equipment breaks down during storms. “What has really set us apart is we are a one-stop shop for the snow contractor — competitive pricing, ease of procurement and, most of all, 24-hour service during an event.” CONS
Distracting from core business
. Brian Churchill, CSP, vice president of The GroundsKeeper in Ashland, MA, says the company has scaled back its supply-side operations. Over the past 10 years the company has sold everything from organic deicers and salt to shovels, pushers, plows and parts. “If someone asked for a product, we would look into (it) and try to carry it,” he says.
He says the recent salt supply shortages proved to be stressful and put a financial strain on the company. “It became clear it was not something we wanted to continue doing. It took resources and focus away from our snow business. This year we scaled back and it has been much better focusing on our operation and not worrying about supply issues. A supply yard that operates year round would be better suited for selling supplies during the winter than a snow company whose main focus is providing management to commercial clients.” Low margins, high risk
. Oberson says he got into salt distribution in 2007-08 and admittedly made some costly mistakes along the way.
The biggest cautionary tale he shared is the huge amount of risk that goes into becoming a local market distributor. “It’s a lower margin, high volume commodity business. For example, if I sell 1,000 tons at $100 per ton, that sounds like a good day. But I’m fronting that $100,000 and waiting for customers who may pay in 30 days.”
Billing, credit, low margins, inventory carryover, product quality from vendors are all risks that come into play. “It’s easy to do this business wrong,” he says. “If I weren’t in the snow business, I would have no business being in the salt business. I’m not here to play with the big boys. I stay in my niche and service who I service. I won’t try to go in the middle or go big. There’s no place for that in this market.”
Cheryl Higley is editor in chief of Snow Business magazine. Contact her at email@example.com.