Low prices, high quality and an expanding product lineup helped paint pail maker Mark Bergman make gains during a recession.
With painting-related products he invented in stores across the country and around the world, Mark Bergman knows how to get onto retail shelves.
The formula is simple, according to Bergman, president of Chanhassen-based Bercom Inc.: Offer high-quality, low-priced products that make a job easier. Good design and made-in-the-USA don't hurt either, he adds.
That combination helped propel Bergman's HANDy Paint Pail, a patented container with an adjustable hand strap, magnetic brush holder and paint scraper that retails for $10 or less, into Lowe's, Home Depot, Sherwin-Williams and countless independent paint and hardware stores.
It also carried Bercom through the recession. As business from professional painters slowed, sales to homeowners and other do-it-yourself painters picked up.
The result has been fairly steady revenue of roughly $7 million a year from 2008 through 2010.
"People in our industry joke that flat is the new up," Bergman said. "If you can get through the last two or three years and maintain your market share and your sales and your margin, you can't really complain too much."
With traffic up in a number of stores and new products in the pipeline, 2011 looks promising, said Bergman, who started the company in 2001 with his original paint pail, inspired by a coffee-can-and-duct-tape creation he made to relieve a hand cramp during a home painting project. Products are made by contract manufacturers in Minnesota and Wisconsin.
Sales could quickly double, with little investment required, Bergman said, if he can close deals he's been working on with a couple of major retailers. He's also pursuing international growth, with distribution already in Canada, Mexico, New Zealand, Austria and the United Kingdom.
Bercom has six employees and manufacturer and sales reps around the country. The headquarters staff includes Bergman's son, Chris, who has been in sales for five years, and daughter Britta, who has worked close to three years in public relations, sales and customer support. Both are graduates of Gustavus Adolphus College, just like their father, who earned a business degree there.
Getting products into stores is only the beginning, Bergman said. The company has expanded its lineup with paint pails, cups and trays in various sizes, as well other accessories.
"We've been lucky to have almost a new product every year, which we realized early on was vital to growth," Bergman said. "You can't sit back on one product and hope it lasts forever. You have to keep adding to the distribution that you're created."
The original paint pail was an immediate hit. But some products that look like sure-fire winners are slower to take off, like the HANDy Paint Tray. Introduced in 2009 as an update of the 1950s-era metal paint tray, Bercom's sturdy plastic version holds up to a gallon of paint and has a magnetic brush holder and handles to reduce the chance of spilling.
"We've probably launched 13 products through the years," he said. "I would say there's three home runs out of that, some doubles and some that just went nowhere."
Bergman is waiting to see whether his newest product will clear the fences. It's the HANDy Bucket Builder, a rugged plastic disc that, with some 2-by-4s, can turn 5-gallon buckets into a bench, desk or other impromptu workspace.
Introduced in February, the Bucket Builder has sold well in some stores but not in others, Bergman said. It's available in a number of paint and hardware stores but hasn't hit the big-box stores yet. Bercom is surveying stores, a routine procedure with new products, to get feedback on what works or isn't working.
In the case of both the Bucket Builder and the paint tray, the retail price of close to $10 may have slowed sales in a down economy. The Bucket Builder has been slower selling so far at the Sherwin-Williams store in Chanhassen, manager Russ Anderson said. Customers have suggested lowering the price and bundling them. "Everything else they've come up with is a no-brainer," Anderson said. "The stuff sells itself, and they have great ideas."
At Abbott Paint & Carpet in St. Paul, manager Jeff Zinnel said Bercom's point-of-sale material is good, but the store may need to build a display to help show how the product works.
Zinnel said he was skeptical at first of the original paint pail but saw it quickly become a strong seller. He prefers the larger roller pail for using a smaller roller or brush on interior projects. "It's one of those things where you don't know if someone can make a better mousetrap,'' Zinnel said of the original paint pail. "But in this case, they have."
The expert says
David Brennan, professor of marketing and co-director of the Institute for Retailing Excellence at the University of St. Thomas' Opus College of Business, noted that Bergman's success in part appears to stem from his ability to see a need for a product, often based on his own experience, where no competing product exists.
"He's wired differently than the typical person," Brennan said. "He sees the opportunity on the one hand and on the other he knows how to get it to the retailer.''
The HANDy Bucket Builder, while apparently offering greater flexibility, likely faces more of a challenge because it competes directly with a product many already have, Brennan said -- the traditional sawhorse. The Bucket Builder and most of Bergman's other products may do well internationally, Brennan said, but lower prices and added distribution costs may reduce his margins as international sales grow.
In the long term, Bergman may want to consider diversifying beyond painting-related products or developing more expensive products that solve more complex problems, Brennan said.