Allied Distributors believes its business model will turn successful window and door salespeople into successful entrepreneurs. By streamlining the ordering and distribution process, thereby eliminating some overhead costs, officials at Allied say one-man operations can serve customers just as well, if not better, than larger window and door businesses.

"Once you start cutting things, you get to what we found to be the core of the business-the relationship between the salesperson and the customer," says Ron Carne, Allied president. "By stripping everything else away, you've turned a successful window salesperson into a successful business person."

Allied is a distributor for Eagle Window & Door-but it is distinct in many ways from a traditional distribution company. It has eliminated the warehouse and staging aspects of delivery, utilizing software developed in-house to manage the logistics of getting orders shipped directly to a jobsite from the Eagle manufacturing facility in Dubuque, IA. The distributor has also established a customer service center to manage all aspects of an order so a buyer doesn't have to think about his purchase's status from the time he places it until it shows up for delivery. "A big role we play is that our customers sleep at night knowing there's someone shepherding their orders through production and staging and getting them to the sites," says Andrew Carne, also of Allied.

"I get to take care of my customers and do what I need to do in terms of sales and getting orders turned in," says Seth Williams, owner of Mountain View Window Design, Denver, CO. A former outside salesperson for a window distributor, Williams joined forces with Allied a year ago to go into business for himself. "The process does run very smoothly."

REINVENTING THE PROCESS
Ron Carne says the idea for what he has affectionately named "distributor light" came to him several years ago when he bought a distributorship in Colorado less than two weeks before September 11. Once the terrorist attacks happened, revenues quickly dropped and he found himself seeking more efficient ways to run a distribution company. "We moved into the fire real fast, which led to our wondering if there might be an alternative way to do this. It led to a lot of late night burning of the oils and brainstorming of better ways of doing business."

What resulted from the reinventing process was a distributor concept that eliminated the need for a warehouse and some of the other overhead costs associated with a traditional distributor. "Everything was on the block," recalls Andrew Carne. "We stepped back and looked at what we could cut-square footage, personnel, trucks. Everything was fair game."

And less overhead means lower costs, Allied asserts. "A typical wholesaler makes their money by marking up the cost of the product," Ron Carne says. "Our markup is going to be lower than the typical wholesalers because we've eliminated a lot of the overhead."

Allied's process is streamlined and simple. A customer logs onto his computer and enters all of the information for an order. Allied checks the entry for accuracy and completeness before forwarding it to the manufacturer. Eagle creates an acknowledgement that it has received the order, which Allied checks again for accuracy. The distributor monitors the progress of the order for the customer and once it is ready to ship, Allied's transportation fleet takes the order directly from Eagle's loading docks to the jobsite. The company's logistic and customer service center in Dubuque maintains frequent contact with the customer so he knows when to expect delivery.

SOFTWARE KEY
Part of what makes this factory-direct approach successful is job-tracking software Allied developed in-house to make sure the timing of delivery goes as smoothly as possible. Andrew Carne, who played a major role in the development of the program, said it's not as much an ordering tool as a customer management software. "Because we're taking it from the time an order is placed to the time it gets to a jobsite. We want to know where all those pieces are in the process."

"Orders tend to sometimes fall into a black hole," Ron Carne adds. "Then all of a sudden, it shows up at a job site. What our software allows us to do better is track the progress."

Andrew Carne said the software is still new and is only used internally by Allied at the moment. In time, however, he expects to make the program available to the company's customers as well so they too have visibility of where their products are. "The logistics is such a huge piece of what we do. Making sure everyone is aware when a truck comes in means we can unload it in an efficient manner."

"Order tracking is one of their strong points," agrees Williams.

Even though Allied has decided to forego the staging and storage that typically happens in a distributor's warehouse, the company has plans in place with its logistics center to hold orders in case the timing of delivery gets adjusted mid-stream. "If there's a situation like with all the rain they had this spring in California, we can handle a lot of the bumps that come with emergencies."

Another reason Allied's approach fits in the current marketplace is because manufacturers such as Eagle are now producing products that roll out of the factory in a more finished state. The need to have post-factory millwork or finishing completed at a separate warehousing facility has been all but eliminated by product lines that are pre-finished and ready for installation, Ron Carne explains. "Eagle is a good company to work with because they offer a lot of flexibility with their products. They have all of their options pulled together and packaged so they're delivered ready-to-go to the jobsite."

Currently, Allied has two locations that service the 48 continental states. The company ran a pilot program of "distributor light" at its Middleton, WI, location before opening its second retail location and customer service center in Dubuque. More than 30 window sales companies-most of which are one-person shows run by former window salespeople-turn to Allied to keep their businesses running smoothly. The company also started a commercial division this year to support its distributor network, getting involved with commercial projects in excess of $100,000 in sales.

FILLING GAPS IN MARKET
Ron Carne asserts that Allied's "distributor light" concept does not compete with traditional Eagle distributors. The manufacturer believes strongly in exclusive sales territories, he explains, and helps Allied qualify its candidates so newly established territories do not overlap with current markets. "What our program does is complement the work of Eagle distributors by working to fill in the gaps on the map."

Allied has a strong working relationship with Eagle and is content to stick with offering the manufacturer's higher-end wood window lines to its customers. Still, the recent acquisition of Eagle by Andersen Windows leaves the future open to the possibility of offering different types of windows made from different materials, as well as complementing door lines, Ron Carne says. "The ink is hardly dry on that purchase agreement. People are just getting to know each other and talk about what possibilities there are.

"There is always the possibility of Allied distributing other kinds of products," he continues. "We wouldn't rule out our someday offering a vinyl line of windows or skylights or hardware."

In the meantime, the company will continue to focus on growing its customer base by reaching out to smaller outfits that are looking for an outside-the-box way of selling and delivering windows to homeowners and builders. Allied has a comprehensive program of informational literature that goes beyond how the distributor works-it explores with the potential customer all the aspects of the business he must research before venturing out on his own. "I think we help them identify all the issues they have to consider and pull the information together so they can make an informed decision. We're suggesting they become an entrepreneur, and that's a big step."

A binder provided to prospects includes a step-by-step business plan that provides guidance on financial issues such as start-up funds, product markup decisions and projected income statements for the first several years, as well as information about how Allied and Eagle conduct business and approach marketing. "The book is certainly to support them thinking like an owner rather than a salesperson," Andrew Carne says. "We want to help them see if they're ready for that next step."

If a prospect decides to do business with Allied, he still maintains an individual identity, Andrew Carne explains. "We give them the layout of the business plan, but we want them to be independent. They come up with their own name and business practices."

So, in other words, Allied views itself as a company that not only supplies windows but also provides new entrepreneurs the tools to enter a competitive market. "We view ourselves as not only being in the window business but more in the service business. As our customer base grows, so does our ability to meet their needs."

The Carne family does not suggest that their business approach will work for everyone or replace traditional distributors. They just think there's enough room in the market for alternative ways of delivering fenestration products. "The window business is a big industry and we aren't suggesting that the 'distributor light' concept will take over the world," says Ron Carne. "There are lots of different ways that complement traditional window distributorships in certain areas."

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