Midstate Tool & Supply, Inc., an independent warehouse distributor in Altoona, Pa., sells a huge inventory to automotive jobbers, other small warehouses and industrial supply houses in all 50 states and 17 countries.
What’s the secret of its success? According to Barry Halbritter, president and CEO of Midstate, its vast inventory, willingness and ability to find new markets, practice of manufacturer lead follow-through and marketing techniques have all been a part of it; but the most important aspect of Midstate’s growth has been integrity.
“The fact of it is,” says Halbritter, “I think we’re ahead of the curve in terms of finding new markets. We can say that more than 50 percent of our business comes from accounts we didn’t have four years ago; and quite honestly, much of that business comes from people who, at one time, may have been our competitors, but see, they can still trust us.”
One example of a trusting relationship is the fact that Midstate, according to Halbritter, is the only warehouse in the country that is a third-party provider to Mac Tools, a major tool company. “This, in itself, caused us to say, ‘you know, there is a different way out there,’” he says.
How does credibility play a role? “Whenever we did business with them,” Halbritter explains, “they gave us their biggest asset didn’t they? It’s called their account base. So when you give the keys to the fox to guard the hen house, you have to trust the fox. They knew they could give it to us, and we weren’t going to use it to sell to their dealers. As a matter of fact, any dealers we were selling to, we no longer sell to directly.”
Another strength that sealed the deal between Midstate and Mac Tools was the warehouse’s inventory. According to Halbritter, Midstate doesn’t have a “cherry-picking line.” “If you have a DeVilbiss spray gun,” he says, “I’m sure we have every gasket, needle, fluid head — every part and piece in it. We can support lines with depth of inventory.”
He says, the need to find new markets comes from the fact that totally independent jobbers, in large part, aren’t surviving — as well as warehouses. In addition, he says, the clean lines of distinction between the industrial, automotive, fleet and marine markets are now somewhat “muddied.”
By following through with manufacturer leads, Midstate has broken into new markets — some not even in the automotive field. “We’re not abandoning the automotive market, but we’re looking beyond it,” Halbritter says.
Another thing that Midstate is known for is its marketing, namely its publishing of 64-page, color, customer-customized, national tabloids. “Anyone who knows our business knows that our tabloids are probably No. 1 in the industry,” says Halbritter.
He explains that Midstate will customize its tabloids for customers who support the warehouse, including customer-named front covers — and even pricing, which is guaranteed for that publishing’s quarter. “Stores show it to their customers, even if they don’t stock some of the inventory,” he says. “It’s OK, because they have a warehouse they can draw [the inventory] from. That’s why we do it.”
Halbritter also explains that not everyone can get a Midstate tabloid. If Midstate is already publishing a tabloid for a jobber down the street, you’re out of luck. “It’s a selected use of a marketing tool,” he explains. “The pull-through publications are done on a co-op basis and on a very selective basis.”
The Vital Stats
Years in business: 35
Revenue: Undisclosed
Growth plans: Continue to work on the horizontal, as well as the vertical, market place.
Number of employees: One hundred, including both outside and internal sales personnel.
Snapshot of Midstate Tool & Supply, Inc.’s history: The original business began in the late 1950s as a manufacturer of autobody fillers. In 1975, after the purchase of a one-man industrial supply house, the division of Midstate Supply Co. was born — then to become Midstate Tool & Supply in 1977.
Wholesale/retail ratio: 100 percent wholesale
Competition: Undisclosed
Affiliation: None
Facility size/locations: About 100,000 square feet
