Maryland Company Redefines DistributionMay 14th, 2009 by Editor
In the world of distribution, we hear these words all the time. But what exactly do they mean? Conceptually, it’s pretty simple—you take something, presumably a product, and i
n the process of transferring it to the next link in the supply chain, you somehow add to its value. Take a roll of window film, for instance; how exactly do you “add value?” Is there even such a thing? In order to answer these questions, one must define the role of the value-adder—the distributor. And answers may vary.
What would you expect to find when you walk through the front door of a distribution facility? Stacks of window film boxes to the ceiling? Orders rolling off of a printer? Fork lifts running to and fro, and a Fedex truck backed up to a loading dock waiting to rush you your next order? Well, in some cases this might be the extent of it, but not always.
Envision this instead:
Three sharply dressed businessmen are sitting around a large conference table. The room is richly designed and appointed with high-caliber audio and visual technology. The three men are examining the satellite view of a city on a projection system. As one man sits in front of a laptop computer, manipulating the view, another says, “That building there. Zoom in. What can you tell me about that building?” This scene might sound like an intelligence meeting, or what you might expect to find at an expensive architectural firm, but it’s neither. It’s the office of Energy Products Distribution (EPD), a Baltimore, Md.-based window film distributor.
The three men are Jim Hondroulis, EPD’s founder and owner, Manny Hondroulis, his son and the company’s marketing manager, and Troy Vlahos, vice president of business development. Why are these three examining a city from its satellite view? They’re scanning for targets. Sales targets.
“The idea is to look at a city geographically, using Google Earth for instance, identify particular buildings and determine who the facility managers, the building engineers and/or the architects are,” Vlahos explains. “Once you know that information and identify your contacts, you know who to go after to try and make an appointment.”
Of course EPD, a strict distributor, does not pursue these targets on it’s own behalf. Rather, the information is passed on to its dealers. It’s part of the company’s value added proposition.
The Role of a Distributor
A conversation with Jim Hondroulis about window film distribution includes very little about the act of moving product around. In fact, it doesn’t even come up. Not that getting product in and out of his company’s warehouse to EPD’s customers isn’t important business, but that represents the “given.” Jim, once a dealer himself, believes that a distributor’s role is much more than just moving product.
“How do we get more business for our dealers? That’s primarily what it’s all about for us,” Hondroulis explains, “whether it be through search engine optimization, or scouting out and finding areas of opportunity. They want to know ‘How can I make more money? How can I sell more film? What do you know that I don’t know?’ That’s the value-added that we can help with.”
Jim Hondroulis got his start in the window film industry in 1978. He holds an engineering degree from the University of Michigan and an MBA from the University of Maryland. After working in the shipyard division for Bethlehem Steel Corp. in Bethlehem, Pa., he worked for a painting contractor for seven years. But one day during the height of the 70s energy crisis, Jim stumbled across 3M.
“I went to an energy conservation show and 3M was there,” he explains. “We were in the midst of one of the country’s first energy crunches. They were looking for someone to represent them in the Baltimore area.”
For Hondroulis, it was obvious—energy crisis, plus energy saving products, equals large opportunities. He signed on with 3M and formed a Baltimore-based dealership named Energy Management Systems.
Hit the Pavement
“I started by knocking on big office building doors,” Jim says. “My mindset was geared for big buildings from the start.” He can point to countless buildings in the Baltimore skyline that sports his film. “From my very first days as a window film dealer, that is what I thought would be my primary market,” he explains.
Hondroulis had clearly found his niche and it didn’t take long for 3M to notice. Based on his success, the company offered him additional territory, including Washington D.C. The company flourished. In 1985, amid restructuring its distribution plan, 3M asked Hondroulis to step up and become a distributor. Up until that point, 3M had been selling directly to its dealers. Hondroulis accepted the offer and today EPD has eight employees and services more than 100 dealers in the Northeast region.
In addition to serving as a 3M distributor, Jim continued to own and operate Energy Management Systems, his 3M dealership, until 2007. But his focus slowly shifted away from selling strictly to distribution. In the process, he experienced the same growth and success he had witnessed as a dealer, only this time in distribution. Soon, history repeated itself and 3M approached him with the proposition of widening his territory. He gladly accepted, adding Maryland, D.C., Virginia, Delaware and Southern New Jersey to EPD’s area. The company currently is one of 3M’s premier distributors, but he never lost touch with what it is to be a dealer.
“We still know what dealers’ pains are,” Manny says. “We still understand, because we’ve walked in their shoes. We know what it is to sell large commercial work. We know what it is to get calls from the installers because they forgot their ladder for the day. I think what we’ve been able to do is take our knowledge of being a dealer and make ourselves more proactive as a distributor.”
Coming from a dealer background, Hondroulis considered it his responsibility to help the dealers he serviced become more successful. Thirty years later, he feels they are facing similar opportunities to that which drew him into the business in 1978—with some key differences. “This time around, it’s quite different than before,” he explains. “Back then, there was no oil coming in. Now we have sufficient petroleum supplies, but there’s a new focus on the amount we use. The American government is willing to invest in making this country more energy efficient.”
Hondroulis says he believes the window film industry may currently be facing its biggest window of opportunity.
“I watch ‘Meet the Press’ religiously every Sunday,” he explains. “One Sunday, I see President Obama, before he was president actually, explaining how energy conservation in this country must enter its point-blank period. But he also suggested how energy inefficient our buildings and skyscrapers are. We duplicated that clip, took it to our dealers and said, ‘Look, this is the president of the United States speaking. Energy conservation is getting greater awareness today than it’s ever gotten before. Let’s make sure we come up with strategies to capitalize on this.”
Aside from product quality and performance, one could argue that the solar films segment of the industry has seen no real change since 1978, when Hondroulis joined the industry. But one thing has changed significantly—the technologies available to help facilitate sales.
“Shame on you if you don’t use technology to increase efficiency in today’s market place,” he says. But Hondroulis understands that he doesn’t have to know it all himself; he simply has to invest in the necessary tools and talent. And fortunately he didn’t have to look far. In 2002, he lured his son Manny into the business. Manny had been working in the financial industries for GE Corp. when he returned to Baltimore to join his father’s company. Shortly thereafter, they invited Troy Vlahos, Manny’s first cousin, to join them. Vlahos’ experience was in marketing and market development, primarily for entrepreneurial start-up businesses. All talents and experience combined, the three have created a marketing and distribution Rat Pack. And Jim says the combination is EPD’s secret recipe.
“One of the concepts of EPD is our complimentary skills,” Jim explains. “In other words, if everyone had the same skill sets that I have, then I would not be filling my voids. Across the board, it seems that every discipline that we need, or most of the disciplines that are beneficial to our dealers, are embodied in one of us.”
A New Day has Dawned
“When I was doing [sales], I basically had to walk into people’s offices,” Jim explains. “Today, that’s totally unacceptable. Today we use technology to do exactly what I was doing, but, through technology, you can magnify your presence and abilities, and duplicate them tremendously.”
If knocking on doors was the name of the game in 1978, the numbers associated with the web multiply those prospecting odds to the tune of millions. This is something Manny, in particular, understands well. Since joining the company in 2002, he has successfully ramped up EPD’s use of web-related technologies. He developed a dealer website program and created an extensive web presence for EPD and its dealers. To date, the company has developed or revamped approximately 40-50 sites. In 2007, Window Film’s editors selected five dealer websites that exemplified the proper design elements as prescribed by web development experts (See related article on page 26 of our Sept.-Oct. 2007 issue). Four out of the five selected were created or redesigned under Manny’s direction.
High Time for a Fresh Approach
In addition to a newly designed educational facility, EPD also ramped up its ability to provide education via the web.
“We’re always interacting with our dealers—either through our newsletter, through our web meetings, email, or by in-person presentations,” Jim says.
“We want to stay so ahead that people continuously say, ‘Wow, these guys are really forward thinkers,” Vlahos says. “A lot of what we did five years ago still hasn’t been successfully duplicated by other manufacturers and distributors today,” Manny adds. “We don’t want anybody to catch up to us. That’s why you see things like EPD University. We don’t want to rely on meeting with our dealers face to face; we want to leverage technology.”
EPD will go as far as writing the initial contact letter for its dealers.
“Then we go in and say, ‘Ok Mr. Dealer, here’s what we’re going to do for you,” Jim says. “Then you’re going to follow that up with phone calls. We expect this from you, but you can expect this from us.” Vlahos will often go as far as sitting in on the initial meeting. “We frequently go in with our dealers to secure a deal,” he says. “They will speak to their installation strengths; we will speak to the features and benefits of the products. It’s that team concept that clients often like.”
Jim says his company’s value added proposition is its job security. “We have a great deal of confidence in the value that we bring to the table,” he says. “As a consequence of that, we presume ourselves to be a valuable part of the marketing program for 3M in this territory.”
“Some dealers are used to a distributor who they call and say, ‘I need this film, this film and this film.’ And their distributor ships it to them and that’s where the support ends,” Manny says. “When they come to us, they’re amazed at all the programs we do. And they will sometimes say, ‘Wow, you’re really not a distributor, you’re a marketing company.”
They believe the current economy may draw additional members to the industry, but Jim maintains that EPD’s focus will remain on increasing market share through its existing dealers.
“We can grow the market by adding dealers, or by making our existing dealers better,” Jim explains. “Our modus operandi is to make our existing dealers better. That’s why we’re spending much more on education and lead generation than we are on our recruiting side.”
If Jim Hondroulis has his way, every box of film leaving EPD’s facility will ship complete with marketing plan and sales lead—right in the box.
ON THE SIDE:
Five years after Troy and Manny joined EPD, it was time for another addition—this time, in the form of real estate. In mid-2007, only minutes from EPD’s facility, a property became available. The location was perfect, but the facility—not so much. So they leveled the less than perfect structure down to its concrete foundation and started anew.
The company spared nothing in its redesign. An interior designer was hired and the facility was appointed with all of the latest communication, audio and visual technologies. EPD also relocated its warehouse to the new location. The move enabled the company to retain and utilize its old building as an educational facility for EPD University, an ongoing trade school for the company’s dealers. The first floor features a classroom environment for automotive products, including window film, vinyl and paint protection. The company acquired the front clips of various vehicles, so its dealers and installers can acquire hands-on training. The facility also features two plotter systems, including Graphtec and Roland systems.
“We’re trying to get more products into our installers’ hands at this point, because everyone is looking for new ways to grow their businesses,” Manny explains. The new training facility also serves as a studio of sort. “We’re coming out with instructional videos that are on the web, so our dealers can see how these products work and how they’re installed.”
Above the automotive training center is a flat glass facility that the company uses to train for various types of architectural films, including decorative.