Q: Jim, let’s start at the beginning. You founded ARGCO in 1981 from your garage. Can you tell us that story and what inspired you to launch the company?
A: I do have this story on my website. I wanted my free time to go surfing when the waves were good. I did not have any skills that would pay me more than 5.00$ an hour in 1981. I got a job as a commission only salesman with no benefits that was the way it was then. I realized how much money my boss was making on my sales so I went home and did it in my own.
Q: You started with a single product — PTFE tape — and have grown to a catalog of more than 8,500 items. What have been some key drivers of that growth?
A: I networked over the phone. I asked my PTFE tape customers what else are you paying too much for. The products I added were items I could ship the entire US for less than 10% freight. I could earn 40% or more and save my customers the same.
Q: For listeners unfamiliar with ARGCO, how would you describe what the company does and who you serve?
A: Argco is for people who work with steel pipe. We supply pipe fittings, pipe hangers, valves, piping tools, pipe fabrication and Fire sprinkler specialties including installation and maintenance niches items not available anywhere else.
Q: Industrial supply is a competitive and price-sensitive industry. What are some of the biggest growth challenges you’ve faced over the years?
A: First keep the overhead down so that means do it yourself and work 15 hours a day until you can afford to hire someone. Now pay that person well and give them cash incentives to work JOYFULLY. Keep a clear head and see through the fog. Do not take on any unnecessary expenses. Remember everyone in business is there to take your money away. The competition are big corporate monopolies today, they have no heart or soul just stockholders and bean counters. It is easy to out perform these large companies because their employees are generally unhappy with the way they are being treated. So build a family out of your business and treat your employees better.
I was asked many times “how do you get your employees to care about their work.” I responded without a pause “ I love them”. That is hard for big business so they can not compete on that level.
Q: ARGCO serves a wide range of trades, from fire sprinkler contractors to HVAC professionals. How do you tailor your marketing and sales approach to reach such diverse audiences?
A: Argco markets primarily to the fire sprinkler trade but our products cross over to other trades. That is the edge effect and at this point you need to build on a few more items to be of interest to this other market. Argco is for people who work with steel pipe and our website finds these other trades and I start all over from the beginning networking to find out how we can fit in and be a service to the customer.
Q: Have you seen changes in how your customers research and purchase products — especially with the growth of e-commerce in B2B?
A: Yes I started without a computer or a catalog. Just me and my home phone. Today you could and should start out doing it that same way. Yet if you make money you can now invest it wisely. I have spent millions on my website and marketing and I guess it worked. It is not necessary I could go home and make a good living with my phone and a quality product at a better price for my customer.
Q: ARGCO is known for fast shipping, large inventories, and excellent service. How have these operational strengths contributed to your success?
A: Billy i tell my prospect there are three important factors in selling any product 1 quality 2 price 3 service and you get two out of three so what do you want. Having all three is the trifecta. At this point to continue to grow I might try to sacrafice one but it can not be quality or price.
Q: You have multiple warehouses strategically located across the country. How does that network help you compete with larger national and global suppliers?
A: Contractors have been told by the big multi branch monopolies. Do not warehouse and stock let us serve you. With that in mind I have to deliver quickly accurately and so therefore I need to get it out the door fast and be within a shipping day or two of my customer.
Q: As you look ahead, what trends in the industrial supply or fire protection industries do you think will most impact your business?
A: Consolidation, I have to learn to love the monopolies and cater to what they need the most.
Q: Can you share an example of a recent win — whether it’s a big project, new product launch, or operational improvement — that you’re especially proud of?
A: I am patenting innovative tools to help contractors stay safe and save time. Now that they know I care about them they will return the favor and buy more.
Q: Finally, what advice would you give to entrepreneurs or manufacturers looking to grow in the industrial supply sector?
A: Find a niche and run with it and when it maxes out find another niche. Do not take on any item that you can not afford to be a leader. You have to save your customers a significant amount of money to get a business off the ground and if you can not do that then you will only be a supplier to the weakest customers. This usually ends poorly. If you are brilliant you can create a new widget that you can control and if not you will need to go get a job at a monopoly company.
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