Distributors Raise the Bar

Here's how the Top 5 Distributors view their success.

IBSA Targets Its Growth

With a second year almost under its belt, International Business Solutions Alliance (IBSA) has grown from 61 to 119 distributor affiliates, reported $337.1 million in sales for the last fiscal year completed, and netted the No. 1 spot on the BFL&S Top 100 Distributors list.

"IBSA was designed to be a team effort, not a top-down corporate structure," said Paul Keith, president and CEO. "Whatever success we have at IBSA, it will come first to our suppliers and affiliates. Our job is to help them get what they want, and only if we do it well do we get what we want."

In just one year, IBSA moved from No. 4 to No. 1 on BFL&S' Top 100 list. "Our first year was more about organizing and planning," said Keith. "Establishing systems and processes that allow us to operate as an organization was more of the agenda the second year."

The Xetex ASP software solution was one system that helped elevate IBSA to where it is today. "Without this solution, our progress would have been much different and much more difficult," said Keith. "We will continue to rely on the software and the support that Xetex provides. We intend to move forward together."

People also made a major difference in IBSA's newfound success. "I have four other managers and a projects coordinator who make IBSA run day to day," noted Keith. "Without their 'whatever it takes' attitude, I am not sure that IBSA would be a reality."

Keith singled out Mark McKinney, executive vice president, Mike Luckett, vice president in charge of affiliates, John Heybach, vice president of suppliers and national account sales, Mark Musgrave, vice president of finance, and James Burchett, projects coordinator, as key players. "There are many others who have been helpful, and they know who they are and that we are very proud of them," he added. "It would take more pages to give them all the credit they deserve."

IBSA plans to affiliate with 200 distributors when all is said and done. "Time for us to process and evaluate applications is more the limiting factor than their desire to join," noted Keith. "It is becoming more difficult to get a distributor processed through because we have many more considerations now. Conflicts with existing affiliates' markets are the biggest obstacle."

As a new year dawns, IBSA will concentrate on launching a multi-billion-dollar contract that it recently inked with Novation. IBSA affiliates stand to earn a significant part of this deal. "The IBSA business model will allow the ingenuity of our suppliers and affiliates to reach a national market," said Keith. "That is real change, and a very dynamic one. The possibilities are endless, and our future has never been brighter."

By Jennifer Hans

Workflow Rises to the Occasion

Workflow Solutions, Norfolk, Va., nabbed the No. 2 position on BFL&S' 2004 Top 100 Distributor list—reporting an impressive $260 million in sales for the latest fiscal year completed. "We spent the last year reconnecting with our customers and looking for new ways to serve their needs," said President David Holland. "As a result, we've expanded our solution portfolio and are proving ourselves to be leaders in promotional products, loyalty solutions and print-on-demand."

Thanks to the efforts of one of its sales representatives, Holland said that Workflow was selected to partner with the Lance Armstrong Foundation (LAF) on its Wear Yellow Live Strong campaign. Armstrong, a champion cyclist, cancer survivor and founder of LAF, launched the campaign last May in an effort to raise funds for LAF programs that help people with cancer. To date, Workflow has produced more than 21 million LIVESTRONG wristbands and is currently in production for an additional 15 million.

Holland said that Workflow has also taken on the purchasing, print shop and warehousing for a major non-profit organization—providing documented savings of more than $1 million per year. In addition, Workflow handles the purchasing and warehousing for a prominent Caribbean-based bank—lowering the bank's operating costs by more than $900,000 while redeploying or hiring former employees.

Within the last 12 months, Workflow has experienced a significant changing of the guards. The company became private through the leadership of newly appointed CEO Greg Mosher. It has also enhanced its management team by bringing on Mike Zawalski as COO, D.J. Matthews as senior vice president of sourcing, Ian Obrien as chief technology officer and Holland as president.

Last year, Workflow reported 70 locations, but this year reported only 42. Holland said that the company's decision to downsize was a result of improved technology. "Workflow remains a technology leader in the industry, as evidenced by our igetsmart service," he said. "We have taken a similar approach internally, and are using technology to reduce our dependence on physical sales offices."

As Workflow continues to expand its industry presence, Holland said that referrals are an important part of its growth. "Our customers are our greatest asset," he said, "and we work hard to ensure that they can refer us with complete confidence."

In terms of progress, Holland said that Workflow is well-positioned to "take advantage of key trends in the marketplace," and predicted that the company's future is brighter than ever before. "We will continue to build upon our leadership position, and take full advantage of the investment opportunities that Mosher and his group are making," he noted. "I anticipate that Workflow will accelerate technology and product deployment, as well as fully leverage our leadership position with creative thinking, purchasing power and a strong sales focus."

By Cynthia T. Graham

Proforma Grows Stronger

Weighing in at No. 3 on BFL&S' 2004 Top 100 Distributors list is Cleveland-based Proforma—headed by founder and co-CEO Greg Muzzillo and his wife, co-CEO Vera Muzzillo.

This year, Proforma reported $250 million in fiscal sales—an increase of more than $11 million from last year's $238.2 million. Muzzillo said that the growth can be attributed to Proforma's value-added solution approach to its customers. "Many industry sales people and former independent business owners have made the conversion to Proforma to tap into our extensive vendor network and support services," he explained. "Our solution is to provide the breadth, depth and flexibility for our owners to satisfy their customers' needs."

Within the past year, Proforma has solidified national contracts with Coca-Cola and Infinity Broadcasting, as well as two Fortune 500 companies. And, the company's proprietary technology and software platform, ProOffice and ProSMART, provided Proforma's business owners with effective sales and marketing tools. "High-quality, innovative and results-creating marketing and advertising campaigns have also led to substantial profitability for our owners," Muzzillo said.

Of the more than 650 independently owned distributors that make up the Proforma network, Muzzillo said that 55 percent are a result of referrals. "Our referrals and inquiries are increasing as our industry presence broadens," he said. "Referrals will be a major component in helping Proforma reach its growth goals."

This year, promotional products and business forms accounted for 56 percent and 23 percent of Proforma's total sales respectively. "Our owners are finding that promotional products have greater appeal and customer value than ever before," Muzzillo said. "The profit margins possible in this arena also fuel our focus and growth."

As a result of its growth, the company added two members to its executive team. Greg McCurley joined Proforma as chief business development officer, and is responsible for leading a team that focuses on owner sales training, business development, and North American and major accounts. Mike Paulus is Proforma's new chief marketing officer. His responsibilities include heading up the company's corporate and owner support marketing initiatives, as well as leading a team of marketing professionals who assist owners with central marketing campaigns and customized marketing initiatives.

When asked where the industry is headed, Muzzillo predicted that business ownership will rise. "Consolidation of the major directs will continue to force more sales professionals to start their own businesses," he said. "Proforma and its franchise business model give owners the clout in operational support, and in marketing and vendor relations, combined with the financial support they need to service their customers and grow."

Looking ahead, Muzzillo remains optimistic about Proforma's future. "With the continued improvement of the North American economies and related business spending, our near-term goal is to be 1,000 owners strong with $1 billion in sales."

By Cynthia T. Graham

American Continues to Build

Ranked fourth on BFL&S' list, American Solutions for Business, Glenwood, Minn., has ranked prominently since 1984 and has placed in the top five since 1995.

This says a lot about President Larry Zavadil's vision. His establishment of the Employee Stock Ownership Program (ESOP) has been instrumental in the company's success. Now, with a national contract with Irving, Texas-based Novation, Zavadil sees the potential for unprecedented growth.

When he established the company in 1981, Zavadil was paying his sales associates 75 percent of the profit on custom jobs, and the remaining 25 percent went toward running and growing the company. Supplier rebates issued for prompt pay constituted another income category for the company. "It was a good model in my mind, and that is the way we have maintained it," he said. "Back then, most of the vendors we were dealing with were offering 5 percent prompt pay. But, over the past 20 years, that has slipped to roughly 1.4 percent."

When the ESOP was established in 2000, American also created its Preferred Vendor Network program. "This concept works to increase vendors' exposure to American's more than 500 sales associates and customers to grow their businesses," explained Zavadil. "Those at the Patriot level offer a 5 percent prompt pay that goes right into our bottom line to boost the company's stock and help American's employees grow their value. Our goal is to get back to where we were in 1981 when we averaged 4.5 percent prompt pay across the board on our cost of goods. At present, we are back to about 1.9 percent. With the Novation contract, we are looking to get back to a 3 percent to 3.5 percent range. Obviously, it's going to be our vendor partners who are Patriots in the top level who will be the ones whom we support in that program."

Zavadil's long-term goals also include the possibility of rolling out private-label products, such as the innovative skin protectant from PROTECTnologies, Huntersville, N.C., that was introduced at American's summer sales conference. "We're conducting due diligence to see if it has legs," said Zavadil.

By Maggie DeWitt

Global DocuGraphix Expands

Holding the No. 5 slot this year, Chicago-based Global DocuGraphix—BFL&S' 2003 Distributor of the Year—has placed among the top five distributors in the ranking for the past three years. Founded in 1998 as a partnership between Graham McClean and Thoma Cressey Equity Partners, Global has regional sales offices in more than 50 cities in North America, a recently opened office in London and business interests in South America and the Caribbean.

The Global DocuGraphix family includes PTM Document Systems, Santa Rosa, Calif.; TopForm Software, Norcross, Ga.; and GDXdata (formerly known as Document Imaging), Denver.

In August, the company completed its acquisition of Denver-based National Graphics Company (NGC), a full-line distributorship whose current customers include national telecommunications, energy and insurance companies. According to President/CEO Alan Bratton, three new strategic acquisitions are currently under consideration that will strengthen Global's presence geographically.

Bratton was already on Global's board of directors for two and a half years when he accepted his position in June, and McClean assumed a strategic role that supports the sales staff, interfaces with major clients and facilitates merger and acquisition activity. "We've built Global DocuGraphix primarily through acquisitions, and we've done a good job of integrating the companies into a common culture," Bratton commented. "Priorities going forward include focusing on growing our top line revenue through our existing offices."

To avoid commoditization of the industry, Bratton emphasized the importance of solution selling. "Distributors need to be providing whatever their clients are asking for, and this takes partnering with vendors and, in cases where distributors may not be as strong in a particular area, with their competitors. And, I believe that e-commerce will figure prominently in true solution selling and in keeping commoditization at bay."

By Maggie DeWitt