Welcome to the world of the micro-distributor. It's one that Lon Coronado calls home.
Coronado is part-owner of TDL Plastics, a Corpus Christi, Texas-based resin distributor that focuses on selling to injection molders with annual sales of $10 million or less. It's a tough challenge, but one that Coronado said he's ready for.
``Most of our customers are buying only, at most, two or three skids of material,'' he said in a recent interview in Houston. ``Beyond that, they get into contract prices where the margins are a lot better.
``Unfortunately, there's not a lot of loyalty to suppliers at this level. If you sell to an account two or three months in a row, that's considered reliable business. A lot of the decisions our customers are making are purely based on price.''
In spite of the challenges, Coronado and his firm remain focused on growth. With that end in mind, he merged his original company - Lexon Polymers LLC, which he founded in Houston in 2004 - with TDL in February. Lexon, now known as Polymer Practice, operates within TDL. Cody Bates, a friend of Coronado's from their days working for Los Angeles-based distributor Cal-Sak Corp., founded TDL in 2001.
TDL now sells to between 75 and 100 accounts nationwide, primarily molders making electrical housings, industrial parts or other items with noncritical specifications and without Underwriters Laboratories Inc. requirements. The firm does most of its business in ABS, polycarbonate, polybutylene terephthalate and thermoplastic olefins. Other available materials include nylon, polyethylene and polystyrene.
About 75 percent of the material TDL distributes is wide-spec, but the firm recently inked a deal with Diamond Polymers, a prime ABS maker based in Akron, Ohio. TDL's other suppliers include Cal-Sak - on noncompetitive accounts - and Lone Star Chemical, a resin distributor based in Grapevine, Texas.
TDL currently has five sellers working with the firm, but expects to add two more in the next year. Sales for 2005 are expected to reach $2 million.
The changing nature of the needs of TDL customers makes stocking material difficult, Coronado said. A customer that needs prime one month may want only wide-spec the next. Suppliers also come and go, as he recently learned through misadventures with resin makers in Mexico and India.
Even dealing with price increases - which have been many in the past two years - is different for micro-distributors.
``We have to handle price increases on a sale-by-sale basis,'' Coronado said. ``We do it verbally, rather than with a letter.''
It doesn't sound easy, but the growth prospects of the plastics market are what pulled him away from a career selling satellite dish networks and home security systems in 1999.
``TDL and Lexon work well together - we play off each other's strengths,'' Coronado added. ``We're really excited about our prospects for the future.''