A
significant investment and business restructuring will be required
to adapt to the new market demands. To meet these increased
demands the next generation will have greater capital requirements.--From
YARD & GARDEN's White Paper, "Catalyst for Change".
Dwight
Sherman thinks of store inventory --whether it's compressors,
cordless drills, chain saws, angle grinders or mitre saws--
as little piles of $20, $50, and $100 bills.
He
defies business strategists by stocking an inventory of tools
worth $4 million on average between his two locations in the
suburbs of Chicago. This inventory and a knowledgeable sales
staff are the secrets to success at Berland's, which aims to
offer virtually everything a professional contractor needs.
"Our
auditors and all the experts say we would be more profitable
if we carried $1 million less in inventory, and if we didn't
run our business on what looks like a good ratio," Sherman
says. "Every year we try cutting back, but we start to
get complaints from customers."
What
started as a masonry business back in in the late 1960s gradually
evolved into a jack-of-all-trades tool store by the Sherman
family.
"To
me, outdoor power equipment is a growing niche market, "
Sherman says. "We offer only quality products and we've
recently stepped up our outdoor equipment offerings."
Savvy
advertising and promotion is another investment Sherman is willing
to make. His "Tool TV" program, broadcast six
days a week in the Chicagoland area, boasts approximately 1.75
million viewers per show. Each show runs over a six-week period.
To help subsidize this venture, Sherman shares production costs
for "Tool TV" with the equipment manufacturers
featured in the program.
"The
manufacturers feel justified spending the money because it reaches
so many people," Sherman says. "Not only that, but
the people it reaches like tools."
| Berland's
House of Tools. A $4 million inventory of tools between
two locations, and a knowledgeable sales staff are the secrets
to success at Berland's. |
