By Doug Magill
It’s hard not to notice David Marinac. Physically an imposing man, he also has sizable innate exuberance and vitality that adds life to any room he enters. His enthusiasm for his business can dominate any conversation.
Then ask him about the Lake Erie Crushers and he becomes positively eloquent. Although he doesn’t get paid much for his work, his booming voice as the team’s PA announcer gets the home town crowd going.
A Pittsburgh native, David felt that there were many similarities with Cleveland so he decided to begin his business in Northeast Ohio after attending Bowling Green State University. Finding his calling in the packaging business, he founded ABC Systems which was, as he describes it, “a combination between an expediter and a movie producer!”
The company would provide whatever services a client needed that more or less related to the packaging business. This could include such things as cleaning reusable packaging, finding parts baskets, sourcing bubble wrap, ordering steel shelving and a host of other products and services. His sales methodology was similar to other established businesses and included cold-calling and traditional media.
While the company prospered, David was nonetheless disturbed by the increasing costs and shrinking margins of the business. He didn’t feel his business was distinctive, and was unlikely to be a dominate player.
On a whim, he entered a business plan contest in Inc. magazine. His entry was accepted, and he found himself in a three-year entrepreneurial master’s program at Massachusetts Institute of Technology (MIT) called Birthing of Giants. The program was co-sponsored by the Young Entrepreneurs Organization (Now Entrepreneurs Organization). Sixty-four students from around the world were part of his class, which included some high-profile business people.
Based on the things that he learned at MIT, he decided to re-develop his business. Realizing that the Internet offered enormous opportunities for leverage, his business became ABC Packaging Direct. Aggressively changing his marketing and customer service orientation, he dramatically reduced overhead and began to narrow his focus to custom-packaging.
His marketing strategy involves positioning his company and the suppliers he represents as readily searchable on the Internet. Industry publications, press releases, web seminars, custom videos and blogs all serve as catalysts to drive traffic to his website.
The web site is the linchpin of his methodology. Once there, prospects can interact immediately with live operators who pre-qualify companies and projects. His talented and hard-working staff then can focus on qualified leads, where they can design and sell solutions via interactive Internet meeting technology. This drastically reduces the selling and initial design time for a project, and allows custom solutions to be completed in record time frames.
“ABC Packaging Direct,” he says, “is the only company in the industry operating this way.”
Venturing into the custom printing arena of the packaging business, he used a California company to supply his needs. Deciding to investigate the company, David discovered that it really didn’t do the manufacturing itself, but out-sourced to China.
Working with a translator to see if he could deal directly with Chinese suppliers, David realized he was in an area where he needed help. Leery of floundering with cultural issues and afraid of going it alone he found a contact in Hong Kong who has been invaluable in helping navigate the complexities of international business.
After travelling to China himself, David has successfully transformed his company to a lean and focused company that is actively developing new markets and is positioned to compete no matter where potential business may present itself.
His experience is certainly applicable to a number of companies here in northeast Ohio who struggle to survive in a time of tight margins and difficulties in competing globally. Some findings:
- Don’t be afraid to reinvent yourself if what you are doing isn’t working.
- Relentlessly focus on driving down overhead. ABC Packaging Direct does not have a central office. Travel is avoided unless there is a difficult problem with an established client that can only be solved with a face-to-face meeting.
- Aggressively pursue the use of Internet marketing. A web site is now a primary part of a comprehensive marketing plan. Driving traffic there is a science that involves many techniques including social media. And, that is where advertising dollars are now flowing as online ad spending breaks records every year and will surpass all print media by 2013.
- Embrace technology to manage clients and keep costs down. ABC Packaging Direct uses Internet telephony, which enables any employee anywhere to act as if they are at a central office. And, a centralized CRM system tracks all client contacts and projects and is accessible by any employee anywhere.
- Know where the value-added component of your profit lies and enhance that. David knows that his greatest strengths are project and design management and speed of solution.
- Don’t compete where you can’t win. The custom packaging market is big, and growing, and suppliers who can provide fast and professional solutions on limited runs will achieve dominance. The standard packaging arena is controlled by large companies that can achieve profitability on minuscule margins. Scale works there, and small players can’t even get in the door.
- Embrace outsourcing if it allows you to control the value-added portion of your supply chain. By working with oversees manufacturers, David knows that he can provide quality solutions at prices that cannot be touched by domestic manufacturers. And, it allows him to drive to dominate the niche he is in.
For more information about David Marinac and ABC Packaging Direct, go to http://www.abcpackagingdirect.com
Doug Magill is a consultant who also does freelance writing and voice-over work. He can be reached at firstname.lastname@example.org