Strategies that are paying off in today’s marketplace.
By Barb Ernster
Competition can be stiff in this economy, but business owners are dealing with it in a variety of creative ways. Some face competition from cheaper products coming from overseas, others from cheaper products coming from the U.S. Although they are feeling pressure to meet a lower price, high quality, good service and U.S. products are still a healthy part of the markets they serve.
In some cases, business is up because other companies are out of business and the competitive pool has shrunk. But in most cases, business owners have simply stayed focused on their primary market and offered additional products or services that cast a wider net in those markets.
“If I had to survive on awnings, I don’t think we’d make it,” notes Mel McClain, owner of Indiana-based Fort Wayne Awning Co. “There are other awning companies around but they don’t do a lot of the stuff we do. They don’t have facilities to store inventory and do their own manufacturing. All of our stuff is custom made, and this gives us a competitive edge.”
They’re usually able to meet the competitors’ prices, says McClain, but customers choose them because of their reputation and longevity in the business—since 1932. The company slogan, “If it’s canvas, we make it,” has worked well over the years.
Besides awnings, they offer truck tarps and boat covers, outdoor equipment and patio covers, divider and roll curtains, as well as custom bags and even backdrops used in license bureaus for photos. Peripheral products, such as replacement parts for gazebos and canopy top swings that can’t be found elsewhere, and a successful awning service and storage business, serve additional market niches.
“I don’t know of any other company around this area that offers this either because they don’t have the manpower or the storage space. This helps in maintaining and increasing our customer base,” says McClain. “We also have a lot of other companies that we manufacture for, whether it’s awnings or divider curtains or screen enclosures. They measure and sell, and we manufacture and usually ship. On occasion we’ll even install them if they’re not too far away.”
Focused on quality
In this cash-strapped economy, competition from cheaper, off-the-shelf brands can wreak havoc on a company that must compete on price. The main competition for TC Tarp in St. Charles, Mich., which makes replacement tarps for truck companies, is the big tarp brands. They also compete with the truck dealerships that sell the tarps with the trucks.
“I have to try to compete with their prices with my product, which is American-made, and my raw materials are going up,” notes president and owner Jim Balzer. “The big tarp manufacturers set the costs, the standard and the norm. Some manufacture overseas. Everybody’s importing it in and it’s hard to compete with predone tarps from China. The Chinese are winning, but eventually it’s going to come back to the American fabric companies. It’s already starting to happen.”
The logistics of shipping materials from China or India to the United States is getting quite expensive, he explains, so American-made fabrics will soon be at a comparable price to the cost of importing them. TC Tarp maintains that its standard tarp is the “heavy duty” tarp coming from overseas, and they compete on quality. When customers bring their tarps in to be repaired, TC Tarp makes them a better-quality tarp or replaces it—and that’s where they gain new customers.
“Right now people are strapped for money so they’ll try to go with the cheapest tarp they can get. When a customer buys one of our tarps, 98 percent of the time they stay with us. It’s getting to them first,” says co-owner Melissa Balzer.
They also draw in customers with other products and services, she adds. They sell hardware systems and do vinyl graphics for the tarps, as well as the Department of Transportation lettering and interstate motor carrier numbers on the vehicles. Customers like that they can get all of this in one place. In addition, they sell marine covers, banners and graphics, as well as prepackaged poly tarps from their supplier, Inland Plastics Inc., in Canada. The Balzers put up a website two years ago and that is drawing in some online orders, but also increasing their exposure among truckers.
In the 20 years they’ve been in business—a business they started after Jim became a disabled Gulf War vet—the Balzers have not changed their strategy to offer an American-made, quality product and good service. The downturn in the economy was tough at first, but they’re seeing an uptick now.
“I find that there’s not as many competitors as there used to be because a lot of companies have gone out of business. We’re actually growing right now,” says Melissa.
Competing for small business
All Fab Tarpaulin Co. Ltd. in Edmonton, Alberta, Canada, has kept a steady focus on supplying custom truck tarps and covers for small companies and individuals rather than trying to compete with the big tarp manufacturers that supply the major truck accounts.
“We do custom work even if it’s just one particular job. We don’t go after big volume. This gives us a lot of work and we’re busy year round,” says owner Paul Bhogal, who immigrated from India in 1991 and started the business from scratch after studying the markets and finding that truck tarps are the main concern in this part of the country.
“If oil is busy, the whole of Alberta is busy,” he says. “The oil and sand economy is quite strong now, but if the economy is down, things are tight. There’s also more competition from overseas and that changes the whole market. We have to be more competitive on price.”
Still, it all depends on the customers. Some people want the cheapest product they can get. Others are asking what kind of material it is, where it’s made and what the warranty is, says Bhogal. “We use Canadian- or U.S.-made material only. We don’t use overseas raw materials. That’s very important. It gives the customers confidence buying from us. We can make any size and style they want, so that’s bringing in the customers.”
The company also makes swimming pool covers, industrial and boat covers, and has expanded into an unlikely niche that is a surprising hit—outfitter tents for hunters and teepees.
“We made 15 teepees this summer. Some First Nations people taught me how to make them and they’re coming in for them,” he says. “I might also go into making outside shelters and fabric buildings.”
Beyond your comfort zone
Thinking outside of the typical market box is helping Maureen Kelly, president of The Design Loft Inc. (TDL) and The Flag Loft (TFL) in St. Louis, Mo., deal with the economy, which she says is her biggest competition.
“It’s just killed The Design Loft side of the company because I work with so many hotels and the hotel industry on the building side is down 60 percent,” Kelly says. “In the last two years, we’ve had eight good projects that were scheduled and at the last minute they’ll pull the plug on it because costs have gone up.”
Â The Design Loft creates site-specific fabric metal sculptures that are permanently installed in hotel lobbies, museums and other architectural spaces. She works with industrial fabrics that are durable and can withstand long-term exposure to the sun or light, and also with woven metals like copper and stainless steel. It is a specific product line that is well known among architects, but the final decision rests with the owners or, in some cases, a board of directors who can decide in the end to go cheap or local. Kelly has had to downsize her expectations and take on small projects to keep TDL moving forward.
Â On the bright side, her overall business is up 20 percent this year due to new business that is coming in to The Flag Loft from unexpected sources. With the hotel and construction businesses in a slump, she started looking to the cell tower industry and now supplies not only the flags that cities insist fly from the towers, but also the lighting systems and power panels that she contracts out to technicians around the country. To become more competitive, the company purchased a Mimaki 1800 printer that can print flags on both sides and do smaller, quicker runs. They offer a lot of college and professional stadium banners and flags, backdrops for high school and university commencements, and are even talking to a major stadium in St LouisÂ about doing seat covers. One of her main concerns about the flag industry is that many states and cities are requiring high schools and universities to purchase from local sources. She’s also now competing with prisons that are making state and U.S. flags.
“It seems we’re always fighting for position. On The Flag Loft side, we do compete with other companies and the economy. On The Design Loft, it’s only the economy,” says Kelly.
An unusual market opened up at an architects’ convention where she showcased a display made of a shimmering woven stainless steel fabric. A couple of architects looked at it and wanted to use it as shower curtains.
“Of course I was insulted, I was there to promote our creative site-sculpture, but three architects asked the same question so we checked into it. We decided that it’s time to start looking at stainless steel shower curtains. I’m talking to national hotel chains and the possibility of getting it into upscale hotels where they have 2,000 rooms,” says Kelly. “You try to think of different ways to do things and what would be creative and make some money at the same time. You have to look at what you’ve got and see how you can creatively move into other areas.”