Customized Business Models Empower Distributors

Economic and philosophical challenges are giving rise to X-treme distributorships.

As Custom business solution aficionados, distributors are naturally going to devise unique strategies for growing their own companies. A few clearly dominant models have emerged. Among today's most influential organizations are the following:

• American Solutions for Business, Glenwood, Minn.—Larry Zavadil, president

• International Business Solutions Alliance (IBSA), Bowling Green, Ky.—Paul Keith, president, CEO

• Proforma, Cleveland—Greg Muzzillo, founder, co-CEO

Major Factors/Common Denominators

With sales revenues in the hundreds of millions of dollars, these organizations are unquestionably major companies. Each company's management team includes individuals who have prior experience working for the major directs.

With regard to daily operations and target markets, they exhibit some features more often associated with the majors than with traditional independent distributorships. For example, Greg Muzzillo pointed out that Proforma enjoys a $2 million marketing budget, while most distributors struggle just to find a little time and money to say that they even engage in marketing activities. Both American Solutions for Business and Proforma provide centralized support of accounts payable, accounts receivable, reporting functions and technology tools. And, by now, anyone with a pulse knows that IBSA and American Solutions for Business signed multi-million-dollar supplier agreements with the group purchasing organization Novation, muscling in on national account territory—once the exclusive domain of the major directs.

However, all three gentlemen stressed that there are many differences between the majors and what their particular distributor models offer independent resellers. For starters, there is the absence of manufacturing capabilities. "Our sales staff isn't forced to 'feed the monster' by selling what we produce," said Larry Zavadil. "They are doing what they like to be doing—not what they are being told to do."

Said Muzzillo, "The major directs are preoccupied with filling up presses and returns on investments for the bricks and mortar. But, Proforma franchise owners are not saddled with the expenses and responsibilities that owning and maintaining equipment entails and can function as flexible, nimble businesses."