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How can a specialty manufacturer in a niche market widen its universe of potential buyers?
Kooima Company is a maker of replacement and aftermarket parts for farm and construction equipment. It was born in 1988 as a repair business for boat propellers, but soon moved into the production of parts for agricultural choppers, harvesters and other kinds of big machinery. Today it has around 180 employees, working out of a 300,000 square-foot facility in Rock Valley, Iowa, and processing a minimum of one million pounds of steel per week.
With expertise in a valuable and highly specialized corner of the custom manufacturing industry, Kooima didn’t lack for customers. But in nearly 30 years of doing business, it hadn’t tapped into lucrative online leads, an oversight that became evident to millennial Aaron Floen. He worked on the shop floor through high school and college, then joined the company full time as a sales rep after graduation. Today he supervises Kooima’s quoting activities aimed at prospective buyers.
Built in 1990, Kooima’s website was “super old and outdated,” Floen recalls. He saw the need for an internet presence and revamped e-commerce site, a realization that coincided with an approach in 2016 by MFG.com, the online contract manufacturing marketplace.
Floen was acutely aware of the company’s limited sales reach. It employs three salesmen who travel to service and secure accounts, but they can only cover so much territory. On top of that, Kooima had acquired so many current customers that its small outside sales force couldn’t make time for cold calls.
MFG.com offered Kooima access to leads from across the country. At the same time, says Floen, it could filter out requests for quotation (RFQs) that weren’t a good fit for Kooima’s line of custom parts.
Andy Richardson, vice president of marketplace sales with MFG.com, says the platform’s users typically consist of three types: those looking to grow their business outright, fill underutilized machine capacity, or diversity the customer base. Kooima fell neatly into the first two categories.
Based on Kooima’s manufacturing capabilities, MFG.com saw the company as “a really good fit for the types of opportunities that we have coming through our marketplace,” Richardson said. The real challenge for a old-line entity like Kooima lay in adoption of the very notion of an online sales-generating tool.
“Manufacturers have to treat it as a social networking platform,” Richardson says. “They have to be able to build relationships and even work with customers outside the marketplace.”
Even so, the adoption by Kooima of the internet went smoothly. The company’s sales staff was up on the platform almost instantly, Floen says, and learning the software took no more than a couple of hours of training.
Results were equally quick to materialize. Kooima signed up with MFG.com in the first half of 2016, and landed three new customers, worth $175,000 of new sales, in that same year. In 2017, it gained 10 new buyers, accounting for another $500,000 in sales.
Gearing up to service the additional business wasn’t a problem, says Floen. Kooima’s plant can take on large influxes of new work, and volumes from major OEM customers tend to fluctuate throughout the year. The facility can process some 600,000 parts in any month.
In 2018, business gained through the MFG.com platform dipped to under $500,000, a deliberate move driven by Kooima’s concern that it had too many existing customers to service. But contracts have been up again in 2019, and orders from one account found on the platform have alone exceeded the $500,000 mark this year. On any given day, says Floen, Kooima might identify between 100 and 200 RFQs on the platform that are a match for its capabilities.
Kooima continues to secure business through traditional sales channels. It pursues leads from the MFG.com marketplace on a select basis, mostly repeat business. Still, says Floen, the company has added some “pretty solid performers” in the relatively short time that it’s been online.
In all, says Richardson, MFG.com brings together some 35,000 manufacturers and 75,000 qualified buyers. The platform is aimed at purchasers of custom manufactured parts — Kooima’s specialty — and provides partners in that sector with a “one-to-many” relationship.
Floen says Kooima is continuing to diversify its sales and advertising initiatives, including use of the ThomasNet.com platform, as it balances current-account service and new business. At the same time, he says, “we’re still committed to MFG.com. It does really well for us — it helps us to broaden our RFQ and customer base.”
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