When Steve Matthew, president of Wooster Hydrostatics, and David Haight, vice president of B.W. Rogers Co., Akron, OH, met by chance at a United Way meeting in 2010, distributor B.W. Rogers didn't have the ability to repair pumps for its customers, and the hydraulic pump and motor repair company Wooster Hydrostatics wasn't in the business of selling fluid connectors.
From that meeting, and the acknowledgment of what their companies couldn't do, Matthew and Haight saw an opportunity to better serve their customers by opening a B.W. Rogers store selling Parker Hannifin products next to the existing Wooster Hydrostatics shop in Wooster, OH.
While it's still the case that B.W. Rogers doesn't repair pumps and Wooster Hydrostatics doesn't sell new components, customers visiting the shared location can now receive all the hydraulics repairs, new products and services they need in one place. The buildings for each of the companies are physically separate, but they sit on the same parcel of land about 200 yards apart.
Customers benefit from the immediate service they can get at the shared location, B.W. Rogers CEO Rick Rogers says. Before adding the B.W. Rogers store to the site, many customers had to drive another 20 minutes to get the hydraulic hoses, fittings, pumps, motors and cylinders the store provides.
The location is now closer to many of B.W. Rogers' customers than other competitors in the market, as well. "We've definitely grabbed market share from other distributors that had similar facilities in the area," he says.
Rogers says the Wooster store was profitable within two months of setting up the operation. It also benefits from the partnership from a human resources standpoint. "Because of the Wooster Hydrostatics presence locally," Rogers says, "it's helped us recruit first-rate employees for our store."
The companies also share some expenses and responsibilities, which cuts costs. Wooster Hydrostatics, for example, takes care of marketing for the location, and B.W. Rogers handles back-office work.
Sharing revenue credit and expense allocation can sometimes be challenging, Rogers says, "but other than that, it's been a pretty seamless implementation and relationship."
A strong rapport between the management of the two companies and open communication has aided in the success of the partnership.
Scott Weaver, president of APR Supply Co., has a similar and more expansive partnership with Schaedler Yesco and Industrial Piping Systems, who share 11 locations. Weaver, too, emphasizes communication's role in a successful joint venture. “Because we have agreed to disagree at any time, we’ve also agreed to listen to each other and trust each other all of the time to make it work,” he says.
Weaver spoke to MDM Associate Editor Jenel Stelton-Holtmeier in Collaboration Case Study: Sharing Branches, Best Practices as part of the MDM series on The Shifting Competitive Landscape. Watch for the next article in the series on the effects of e-commerce on the competitive landscape in the January 25 issue of MDM Premium.
