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Distributors Bank on the Team Approach
IMR, Oct. 28, 1996If you view other distributors as competitors only, you may be missing out on prime business opportunities. John Martin and Pat McMahon put aside competitive impulses and joined forces to sell to financial institutions in eastern Pennsylvania. Martin is president of Optimum System Products Inc. in Worthington, Ohio, and McMahon is president of Forms Plus Inc. in Scranton, Pa.
Martin met McMahon and his former partner Al Cunningham at a Kramer-Smilko users' group meeting. The distributors forged a relationship. When Martin approached the Pennsylvania Bankers Association to market to the state's banks, he solicited help from Forms Plus. "Rather than compete with Forms Plus," says Martin, "we decided to do a joint project."
Last January, Martin and McMahon developed a limited liability corporation called Optimum Systems Plus, a combination of both distributorships' names, to serve banks east of State College, Pa. The distributors are equal partners in the venture and split profits and expenses evenly. So far, Optimum Systems Plus has one employee, a former Standard Register sales representative, who targets banks in the Philadelphia and Reading, Pa., markets. Employees from Optimum System Products and Forms Plus also work part-time on accounts for Optimum Systems Plus. The company shares office space with Forms Plus, although it has its own phone numbers.
Through its relationship with the Pennsylvania Bankers Association, Optimum Systems Plus has the potential to serve 180 banks. To date, it has contracts with three banks to provide business printing, office supplies and banking supplies. The company oversees purchasing, receiving, storage and fulfillment for the banks.
Joint ventures require symbiosis between partners. Martin says his firm had experience in the financial market and Forms Plus had expertise in forms management and warehousing, so the combination made sense. Both companies also used the same software, making the relationship logistically easier. And both distributorships have benefited. "It allowed Optimum System Products to get into a new market area with little capital," says McMahon. "It allowed us to take hold of a new vertical market." Forms Plus also began selling office supplies, a product line sold by Optimum Systems Plus.
Martin travels to eastern Pennsylvania every few months to meet with customers and with McMahon. So far, this innovative business arrangement is working well. "We have a trust built up," says McMahon. "I know what John is capable of, and he knows what I'm capable of." Together, these distributors can accomplish quite a lot.