From The President
My desire to grow the company is no secret. Did you know that some companies have no desire to grow? They are satisfied with their current position or the company owners are just riding out a decent business until it’s time to walk away. Not me. I believe that, as our partners, you should be aware of our goals and strategies, and we have increased our communication of these business topics to you since I took ownership of AMSOIL. If you’ve been following along, you know that our two main goals are to 1. Help Dealers be successful and 2. Ensure AMSOIL remains strong for many years to come.
Going Beyond being Relevant
We are investing a lot of money toward achieving both goals, and I am pleased with the progress. The new e-commerce platform we implemented is opening new possibilities for our marketing team. We are seizing those opportunities with more effective promotions, better engagement with visitors to our website, strong follow-up with people who show interest and more. These actions are driving growth, so we’re increasing our marketing budget to accelerate that positive momentum. We are also spending more on the Commercial and Retail Programs with personnel and program modifications designed to help you secure more business. We introduced additional improvements for the retail channel in the July issue of AMSOIL Magazine. All these efforts are being made in service to our first goal, which is to help you be successful, but they also support our goal to strengthen the company. The stronger you are, the stronger AMSOIL is and vice versa.
Ensuring the company’s strength is important for obvious reasons, and the COVID-19 pandemic reinforced the importance of that goal. This event has taken a dramatic toll on economies around the world, and we are not immune to its effects. Unfortunately, we have not seen the end of the coronavirus or its economic devastation. While we are not growing at the pace we were prior to the pandemic, we are not struggling like other companies are either. That is largely due to our diversified approach to business. The Preferred Customer and online/catalog customer segments pulled extra weight, for example, when the retail channel dropped sharply. Likewise, our wind and international business held strong when consumer sales crashed early in the pandemic. Our efforts through multiple markets kept us going.
The Power of our Staff is Beyond The Competition. It’s time to bring our tech to the rest of the industry
The pandemic has made it clear we need to continue diversifying our business, and the industrial market is an ideal place for us to do that. We have dabbled in non-consumer sales to industrial and original equipment manufacturer (OEM) customers through the decades. Few Dealers have participated and even fewer have been successful selling to these types of customers. We even created thorough industrial training and a supporting sales program for Dealers in the 1990s and it did not produce results.
With more experience working with these types of customers through our wind division, the reasons we could not succeed have become clear. Just like customers who purchase wind-turbine lubricants, industrial/OEM customers have requirements that exceed the willingness or ability of most Dealers to fulfill independently. The selling cycle is long and the procurement process is complex. Technical aptitude requirements are high, frequent on-site service is a must, and customized packaging, delivery and pricing are only a few of the requirements beyond what is necessary in consumer sales. Industrial/OEM lubricant applications have unique needs and recommending lubricants to protect expensive equipment carries high liabilities. Asking Dealers to pursue this market knowing the low probability of success and the associated financial risks required is irresponsible.
Meanwhile, the industrial/OEM market represents approximately 50 percent of all lubricants sold. Keeping AMSOIL strong for years to come means we can no longer ignore this important market. Therefore, we are developing a strategy to pursue this business using a corporate sales team. Over the next several months we will finalize our strategy and begin pursuing sales to these entities in North America.
What does this mean for you? It means you have a partner with growing strength and financial stability that you can depend on. It means we will learn and develop certain new products for you to sell. It means we will improve our reputation and expand our market presence, which will improve your ability to sell oil. It means we will improve our manufacturing and supply-chain efficiencies and reduce manufacturing costs to improve our competitiveness. It means we will have increased funding for marketing and advertising.
Our new sales team will be pursuing business where you are not, with different products through different sales channels. Serving different types of customers with different products through different sales channels is common. Paint and coatings are an excellent example; there are the products you and I can purchase through retailers, then there are the products we have no knowledge of or access to, such as those sold to paint the Golden Gate Bridge. That is what we are implementing.
We’re listening to you
I hope it is evident my commitment to you is as strong as ever. We are spending a lot of money on programs and tools that support Dealer sales. There is more to come. We will unveil major program and training improvements throughout the next six to 12 months that will benefit all Dealers who are selling oil. We are also developing a pilot program to increase Dealer success with commercial business. The test phase will begin soon. If it is successful, it will result in new opportunities for growth and earnings for participating Dealers.
This is an exciting time for everyone associated with AMSOIL. We have clear strategies for growth through multiple markets and they are working despite unfavorable market conditions. You are a very important part of these strategies, and you can expect me to continue building the Dealer business for your success as the company grows.