Firm prospers by training distributors

By LIBBY MIDDLEBROOK

Hydraulink Fluid Connectors is revolutionising the way some New Zealanders run their small businesses.

The Auckland company, which manufactures hydraulic connectors and distributes them nationwide, has pumped thousands of dollars into an innovative training and marketing programme to boost business.

Carting jellybeans, beer, lashings of bright yellow paint and a range of training models, joint managing directors Lee Short and Noel Davies have spent much of the last decade travelling the country to train their distributors.

"The majority of our distributors do a great job once they've got some business, but some are not particularly good at selling and marketing products," said Mr Davies.

"We've got very close to our outlets and we participate in helping them to grow their own businesses."

The pair, who bought out Penrose-based Hydraulink in 1989 after the Unity Group-owned subsidiary went into receivership following the sharemarket crash, help distributors find ways to boost their businesses and increase Hydraulink product sales.

Mr Davies said customers had received hundreds of litres of Hydraulink-branded beer and food freebies through distributors. This had boosted the company's profile, which was almost non-existent 10 years ago.

A decade on, Hydraulink, which makes its hydraulic fluid transfer systems in Pukekohe, has increased its exclusive distributor base from 23 to 28 outlets.

In that period, the company, which has advertised on television and sponsors various sporting events, has expanded its domestic market share from 10 to 30 per cent and boosted turnover from $1.5 million to almost $10 million.

It has even applied for National Qualifications Framework certification to reward distributors taking part in its business development programme, covering everything from ethics to accounting.

Mr Short said assisting distributors to expand their own businesses and signing up exclusive supply contracts for hydraulic fluid connectors had been the key to Hydraulink's success, along with the company's three-year-old franchise system.

In addition to its distributors, 43 franchise outlets have been set up around New Zealand since 1997. They operate 75 mobile van units to repair broken-down hydraulic fluid-run machinery.

Distributors and franchises now contribute about 40 per cent of the company's turnover.

"No one's got an interest in a business like the owner," said Mr Short.

"When we took over we had a couple of van operators on wages and we really struggled to make them profitable. Now that we've sold them off we've seen some amazing growth, which helps our business, too."

Hydraulink was established in 1945. Mr Davies became the company's general manager in the late 1980s after 21 years as a Navy officer.

Mr Short, who was running another Unity-owned division, decided to join Mr Davies in buying the company for about $1 million.

"We were running the company on one IBM computer and we had six mobile vans and about 30 staff at the beginning," Mr Short said.

While they wanted to expand the retail side of the company, "we didn't want to own branches around the country either and have to worry about staffing issues."

The pair sold all but one mobile van, along with outlets in Australia, to concentrate on building the New Zealand business through stronger branding.

"When we took over the company in 1989 the brand wasn't clearly identifiable. We went from having a white colour to having a very strong bright yellow for our logo, vans, buildings and signage," said Mr Short.

While Hydraulink has been relatively successful, the pair concede their work has not been a complete breeze over the past 10 years.

In the mid-1990s, they invested more than $100,000 in an Auckland joint-venture company that sold industrial hose products used in machinery such as milk tankers.

The Italian-based partner, which held 51 per cent of the company, appointed a general manager who was a "bit of a control freak," said Mr Davies.

The pair had no control over the running of the company and it failed within three years.

"We learned from that: we would never do anything again that we weren't in control of."

Mr Davies and Mr Short plan to boost their Australian and Pacific Island trade in the next few years.

The company is already selling products through more than 15 distributors in Australia and the islands, which generate about 20 per cent of turnover.