Synergies for manufacturers make a success

BY ANDY SCHOR
Showroom specialist

In today’s global marketplace, there are thousands of manufacturers around the world working to establish themselves as a brand in the U.S. market. Before they can enter this marketplace, they need to consider things like: What is the competition like and how does their product stand up against it? How do they set up their sales staff and distributors to deliver the products to the customers? Do they need a facility or can they supply products from their factory overseas? What are the costs involved? Probably the most important thing is to hire a person who knows the industry, knows the proper channel markets, knows the product, and can assist in guiding your company through the tough challenges. This person needs to help you make staff decisions, find the best sales representatives, set up the proper channels to sell your products, and to steer the company in the right direction.

I’ve had a lifetime’s worth of experience in my 25+ years in the decorative Kitchen and Bath industry. Working my way up through the ranks has provided me a diverse background. On the wholesale/retail/showroom side, I’ve served as a showroom purchasing agent, a showroom salesperson, a showroom manager, and eventually went on to serve as director of showrooms and builder sales with Apex Supply Company (prior to them being purchased by the Home Depot).

On the manufacturing side I have worked as an outside factory representative, a customer service manager, a national sales manager of a few nationally recognized faucet and hardware manufacturers, to finally becoming the vice president of sales and marketing for Huntington Brass. My career has spanned small family owner shops, medium-sized companies, and a Fortune 500 company in Home Depot, giving me a variety of perspectives, especially focused around decorative products and the showroom business.

You could say that I’ve walked a little in just about everybody’s shoes in our industry. And I pride myself on being a positive, solutions-oriented, and out-of-the-box thinker, that has put together a new business model with some serious potential.

Last year, I found myself in a situation that is all too familiar these days, as the company that I was working for was forced to close their doors. This company was a typical distributor (acting like a manufacturer) of decorative plumbing products from around the world. Their largest supplier of decorative faucets was a company called La Torre. La Torre is a 51-year-old company that distributes faucets to over 42 countries on five continents around the world. They have an international presence/image as a quality, 100% Italian designed, engineered and manufactured product.

The loss of this distributor left La Torre with no distributor for the U.S. and Canadian markets. In this market, they had very little, if any, brand recognition (as the products were being branded by this distributor as their own product). Yet there was a demand for the products in North America. Dr. Massimo Latorraca and his sister Anna Latorraca, the president and the managing director of La Torre, approached me and the three of us came up with a plan.

The initial plan was to capture as many sales as possible, service the customer at nearly any cost from Italy, until we could develop a sound plan for sales and distribution for North America. Initially this meant taking orders in the U.S., and processing them directly through the factory in Italy. This plan entailed producing one faucet, one part at a time, and shipping via express air directly to the customer. The cost of this portion of the plan was extreme, and certainly not profitable, but the goal was to save the market.
Once the situation was stabilized, the three of us came up with a plan that not only created a win-win situation but something much bigger than that. As stated in the opening of this article, so many manufactures want to come to the U.S., but there are many issues and questions at hand. One of the biggest obstacles is the coming up with the capital investment. To come to the U.S., establish a distribution center, customer service center, sales staff, and all the other things it takes to sell products in the U.S., is very expensive, and yet worth the reward if done right.

With the market being on such shaky ground, some would say you would be crazy to come to the U.S. right now. But what if you could find a way to come into the market at one-fifth the cost of the initial investment? Would that make it interesting? And consider this, with the market in very poor shape some things actually become cheaper and more competitive, like rent or other related expenses.

We discussed and executed a plan that has become a reality today. You see, in Italy, manufacturing is somewhat specialized. Faucet companies make faucets; not accessories or other products. Bath accessory companies make bath accessories, and not faucets; and fixture companies make fixtures. There is not really a large company like a Kohler, American Standard, etc., that offers a broad spectrum of products that design and suites their products together.

So what if they could obtain four other companies, who they felt comfortable with working with, that made products that were not in competition with each other, yet could coordinate and work together to offer a complete solution, and then get these companies to split the cost.

Sounds interesting, right? But then you say, what about the basic problem of dealing with an import line, since sales are down around the country, or what about getting re-supplied with inventory on a fast and consistent basis, without having to wait to fill a container’s worth of products to keep costs down? There is a simple answer for these companies — since all five companies are located relatively close to one another, they can consolidate products into one container and ship every month, if not more often when sales pick up.

So a new group has emerged as IBG, a group of five Italian bath and kitchen manufacturers that make products that are 100% Designed, Engineered and Manufactured in Italy:

• La Torre (www.latorre-spa.it), a 51-year-old family owned company that manufactures faucets. They are focused on making quality products and being environmentally responsible. La Torre was the first Italian faucet manufacture to be certified by TÜV / ISO 14001: 2004 for environmental quality management. With over 20 different collections / series of bathroom and kitchen faucets that range from contemporary to traditional styles La Torre is a force to be dealt with.

• Bagno and Associati (www.bagnoeassociati.it), a quality-driven manufacturer that makes over 20 different suites of bathroom accessories, including customized suites to match La Torre faucets in style and finish. Products in each suite range from the basic accessories, to counter and floor mounted accessories.

• Disegno Ceramica (www.Disegnoceramica.com), a company that has been making products on an OEM basis for a few different manufactures in the U.S. for many years now. They manufacture Fine Fire Clay lavatories and consoles and vitreous china wall hung toilets. Their products are of very high quality and they have some very unique and amazing products.

• Margaroli (www.margaroli.com), a 62-year-old company that manufactures electric and water-filled towel warmers and other bath accessories. They have dozens of unique designs; floor mounted, and free-standing models, all available in matching finishes to La Torre and Bagno & Associati.

• BMT (www.bmtbagni.it), a 40-year-old manufacturer of fine Italian bathroom furniture. This company has both traditional and contemporary designs, in a wide range of styles, colors and material. With over 60 standard lacquer colors available in matte, high gloss, and automotive type finishes, as well as a full array of wood veneers. They also offer a wide selection of clear crystal like and regular green toned glass, available in frosted and color glass, as well as natural Stone and Quartz countertops to go along with the various series of cabinets. Cabinets are either floor mounted, free standing or wall mounted.

All five companies work together in synergy, to coordinate products, styles, finishes and to keep the products in a similar price range, while coordinating their logistics and shared expenses, in order to seize the U.S. market, and to offer a complete Italian solution.

Today, all five companies are housed in one office with a 3,600-square-foot warehouse in Buford, Ga. The warehouse stocks a variety of products from four of the five companies. BMT is the only company in the group whose actual stock will not be available because their offering is so customizable having inventory is really not possible.

This new venture is just getting going but has the makings for a true success story. Each manufacturer is effectively working together to coordinate styles, designs, finishes, and logistics in order to form a working partnership.

This partnership allows the customer a one-stop /suite/package and yet each company has its own identity and individuality.

Andrew Schor is a 25+ year veteran of the decorative plumbing industry. He grew up with the industry in his blood, as he is the third generation of Schors in the business. He has managed, designed and merchandised multiple decorative showrooms, while with Apex Supply Company in Atlanta (purchased by Home Depot in 2000). Schor has also worked for different faucet manufactures like Watermark (formerly SEPCO), Cifial and Huntington Brass. This gives him a unique perspective of the Kitchen and Bath Industry. Schor is currently serving as the sales/general manager for the five different companies in the IBG group. He has a wealth of knowledge of the industry and can be a very helpful resource. For further information, contact him at IBG Group,5089 Bristol Industrial Way, Suite D, Buford, GA. 30518. phone 678/889-8287, fax 678-/889-8059, e-mail aschor@bellsouth.net