How its Wide Reach Helps Keep GSA Competitive
The manufacturer’s representative focuses on serving multiple markets.
Some firms only serve one market, but Oakdale, N.Y.-based GSA thrives by serving several. This approach has not only earned the manufacturer’s representative more business, but allowed it to survive turbulent markets, CEO John Beaver says.
Over the years, “GSA grew vertically as well as horizontally,” he says. When the company started operations in 1964, it specialized in selling electronic components to OEMs, which still remains the largest part of its business today.
“Our first thought was to [only] sell electronic components to manufacturers of power supplies,” Beaver admits. “Unfortunately, had we stayed in just this one market, we would have been a one- or two-person operation, or worse, out of business.”
Instead, GSA grew to sell components to machine builders and large processing end-users, which allowed it to cope as major semiconductor manufacturers underwent mergers and acquisitions. “Many of our peer organizations that specialize in semi-conductors either went out of business or merged,” he says.
Today, Beaver says, GSA has established a major presence as a supplier to machine builders and end-users. “Machine builders are declining in the metro New York/New Jersey market, which makes GSA a large fish in an ever-receding pond,” he explains.
GSA also has expanded into the medium voltage niche, selling large transformers and switch gear to utilities, as well as lighting. Currently, the company sells to clients in six states and employs a staff of 30 employees.
“Our biggest customers are in the solar industry,” Beaver reports, adding that GSA sells transformers to these clients. “We also sell combiner boxes and the controls.”
The firm also sets itself apart in its market with the size of its staff. “We are larger than most representative firms in the focus markets we serve,” he says.
This has given GSA the infrastructure to handle customer service for its clients. “We can also invest in personnel before we have the sales to pay for it,” Beaver adds. “It’s the chicken before the egg.”
GSA will sometimes hire salespeople before the existing sales in the territory are able to support it, resulting in operating at a loss for a year or even two before making a profit. The other territories support the firm until the investment pays off.
Beaver prides himself on participating in industry associations. Currently, he is a member of the Electronic Representatives Association (ERA) and chairs the Metro New York Chapter of ERA.
He is also a member of NEMRA, National Electrical Manufacturers’ Representatives Association and recently completed six years of service on the board of MANA, Manufacturers’ Agents National Association. “[That includes] two years of chairing this 3,000-person organization,” he says.
This has not only helped Beaver and GSA keep their fingers on the pulse of trends, but also cope with the challenge of finding firms to purchase. “I network constantly to try to find additional firms to purchase,” he says.
“This is the first time in 25 years I’m not actively seeking to buy out a firm,” he admits.
GSA has satisfied former owners by giving them a 20 percent commission annually for five years after the purchase, he adds.
“They’ve walked away very happy,” he says. “It’s a gamble for them because they have to pick the right company to acquire them. It’s less of a gamble for me, but I wouldn’t want to lose somebody else’s retirement.”
GSA recently made its move into the lighting market as a representative of Dialight, which specializes in industrial and explosion-proof lights. “When they first came out with their product line, they gave it to the traditional lighting reps,” Beaver recalls.
When that did not work for the company, Dialight switched to representatives that were more project based and sold into the construction market. Today, “We’re very successful selling Dialight,” Beaver reports.
GSA has grown to serve other lighting firms as well. “That’s how we’re learning [more] about lighting,”Beaver says.
Looking ahead, Beaver says, GSA plans for more growth as it moves into new territories. “We very much would like to expand in the North Carolina/South Carolina area, and all the way down to Florida,” he says. “Ideally, I would like to buy rep firms in those areas.”