Independent Rep
Born To Rep
Equipment Business Came Naturally
By David Wolff
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Equipment is in his blood . . . |
When Mike Miller was discharged from the U.S. Air Force in 1965 and decided to open a rental store, people who knew him nodded and said, “that figures.” After all, the Addison, Ill., native was literally born into the equipment business.
Miller’s grandfather was an inventor who held several patents on compactors, concrete vibrators, troweling machines and concrete screeds. In fact, he invented the oil-fired space heater. Miller’s parents owned Master Vibrator Co., a manufacturer of construction equipment, for more than two decades.
“I was brought up in the construction equipment business,” Miller says. “As a kid, I was around the industry all the time. I could get my hands on a lot of equipment, so naturally I opened a rental store near to where I grew up.”
However, five years later it was time for a career course correction. Miller sold his share of the business to his partner.
“I felt limited and wanted to do more,” he explains. “I had a desire to travel and do something besides opening the store at 6 a.m. and closing at 6 p.m.” Miller called a friend who had been an independent manufacturer’s representative and asked him how to get started. “It was a new thing, and I became a manufacturer’s agent,” he says. “Within 24 hours I had six equipment lines.”
Forty-five years later, Miller, 71, lives in Palm City, Fla., and is gradually stepping back from the day-to-day activities of MJ Combined Companies, Inc. There are six other members of the company who cover 10 states and represent 26 construction equipment manufacturers. They are: Neal Noga, president, (Illinois); Steve Hammond, associate, (Indiana and Kentucky); David Peve, associate, (Ohio and West Virginia); Todd Nielsen, associate, (Michigan and northern Ohio); Mark Rosenquist, associate, (Wisconsin); and Clark Fossand, associate, (Minnesota, North and South Dakota and Iowa).
Challenging start
Miller faced a tough entry into the world of independent reps. In the early days, rental stores did business through equipment dealers, who were not keen on seeing the industry succeed. Stores had to go through dealers, who marked up equipment prices, which were later marked up again for the rep. But as time passed, more and more manufacturers began to accept rental’s viability and growth and to offer equipment to reps.
“As an independent rep, manufacturers and stores want to know who you are,” Miller says. “Are you reliable? Do you do what you say you’re going to do? The key was my ability to get good, quality equipment to sell.”
At the time, independent rental stores and manufacturer’s reps had a lot in common. Both were equipment industry mavericks that had to learn the path to success by trial and error.
“Back then we made decisions on things we knew about,” Miller says. “We talked to each other about which products rented well and why. As reps, we saw many operations and evaluated how companies were doing things. We actually became advisors, talking about solutions we saw from other stores. We were there to make a living, but also had a vast knowledge of information. And, because at one time I owned a store, I knew about their problems. Word of mouth is how the rental business got started, and we built the industry together with store owners.”
Another critical event, according to Miller, was the establishment of The Rental Show by the American Rental Association (ARA). The concept was to organize an event where rental storeowners could get face-to-face with equipment manufacturers.
“We wanted to create a buying show,” Miller says, “where stores could meet manufacturers, buy with confidence and get an attractive price. For many years, there were only one or two air compressor manufacturers who would sell to the rental industry. Once the show got going, other companies looked at the industry and wanted some of that business, too.”
Out of sight, out of mind
Miller’s father never missed an opportunity to lecture his son about the importance of customer service. “My dad said when you’re out of sight, you’re out of mind,” he says. “The customer’s needs exist; the rep just has to be there. When the customer wants to buy, who do they think of? I always believed it was important to show a personal interest in my customers. Independent storeowners want to know who we are so they can believe in us. I was always willing to give service as well as take an order.”
According to Miller, today the Internet can’t compete with the person-to-person contact between the rental store and independent rep. He explains, “The Internet won’t visit the customer when there are service problems to solve, open houses to work and sell their products, or attend customer weddings and even funerals.”
Consolidators bring some benefit
At its essence, the rental industry supplies equipment for specific or short-term needs. Despite the blow to the economy in 2008, those needs still exist.
“The construction industry really got hit hard,” Miller says, “but restoration and infrastructure projects are keeping things going. Contractors are not willing to buy a fleet of equipment to do this work. It’s much easier to rent locally and move on. One of the biggest problems is that banks have been unwilling to make loans to small contractors and builders. That has yet to pick up.”
Another challenge is the growing presence of national rental stores. Miller calls it a love-hate relationship. “It’s hard when these consolidators, as I call them, come into an area and buy up local rental stores. In the South, they hit independent reps hard. However, in the Northern tier where we operate, their presence turned out not to be a big deal for us. The national chains didn’t know how to make enough money in six months. They didn’t want to get too far north and buy up too many stores because the construction season is only six months long. We go like crazy for six months, and then turn to service and parts for six months. As a result, the consolidators didn’t penetrate our territory.”
On the other hand, they proved to be a boon for even the small, independent rental stores. “They brought in advertising,
something the independents weren’t willing to do,” Miller says. “The national chains promoted the rental industry on television, with NASCAR, and on other major platforms. They highlighted the rental concept, which was terribly needed. The stores we do business with enjoyed more success due to increased advertising about rental. The big chains aren’t always the bad guys. They can be fierce competitors, but they do a lot of advertising that helps us.”
In the end, solving problems quickly is the greatest value provided by independent manufacturer reps. Miller explains, “We solve problems with product application and service, and, naturally, at a great price. We have excellent competition out there. We make calls to fill the need of our customers, and solving problems ASAP is a big part of our travels. A huge part of our success has to do with the outstanding manufacturers we represent — IHI, Niftylift, Mi-T-M Corp., Sullivan Air Compressors, Koshin Pumps, Toro and many more. A quality product with outstanding service backup is
absolutely necessary for our continued success.”
Originally published in the May/June 2014 issue of Pro Contractor Rentals. Copyright 2014 Direct Business Media.
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