Steel continues to be one of the most sourced products on the Thomasnet.com platform. It is no surprise that steel and metals represent an important supply source to today's aerospace, aviation, and medical industries.
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So how can steel and metal manufacturing businesses continue the momentum of their business growth? First, make sure you have a clear business plan. Some manufacturers try to grow their manufacturing business by doing everything possible. In this post, we'll help you choose business goals that are realistic and how you can document them so you can see your milestones and track your growth along the way. Doing so will ensure you're not as overwhelmed and your employees stay motivated too.
Create A Business Plan
If you're just starting out, a good business plan will save you time later and potentially attract angel investors if you plan to seek out that kind of funding. There are several factors to consider, including your legal requirements, where you&#;ll be selling, your day-to-day roles, and when you&#;ll start making money. There are also production and personnel data you should detail in your business plan and answer questions like:
- How are your steel products or service produced?
- What does it cost to produce your steel products or service?
- Is there an adequate pool of talent for future hires?
- Do you have an organizational chart?
- Do you have a management strategy?
&#; Get Your Free Business Plan Template: Establish A Roadmap For Future Growth
Understand What Your Employees Need To Thrive
You may have heard before that when you keep your employees happy, they keep your customers happy. It&#;s true that both your employees and your customers are at the heart of what you do &#; and key to business success.
Amerequip Corporation, a designer and manufacturer for the utility tractor, skid steer loader, and lawn & garden equipment markets, implemented several steps contributing to their $150 million annual revenue. One of the first steps was improving the culture of their internal teams. They needed to improve processes and reduce employee turnover to ensure they were equipped to handle more growth. Ameriquip modified their working hours with morning and afternoon shifts that run 10 hours each, Monday through Thursday, and a weekend shift that comprises three 12-hour days, Friday to Sunday &#; and they're now able to fill their talent pipeline.
Flexibility is what the modern workforce is looking for today, and it&#;s a solving factor of one of the challenges many U.S. manufacturers are still experiencing to bridge the generational gap. Addressing internal improvements can ultimately lead to efficiencies, improved quality control on the shop floor, and increase your customer base.
Build On A Customer-Centric Model
As a business owner, we know you&#;re already focused on servicing your customers &#; but don&#;t get so busy tending to their needs that you forget they&#;re key to attracting new ones. Keep your customers happy by communicating with them regularly &#; outside of regular customer service needs or problems. Involve them in your new growth plan and ask them for feedback about what you could be doing better. This helps you keep their needs top-of-mind while opening opportunities to address new challenges for other customers. Also, reminding customers of your presence when they least expect it can go a long way in keeping them in your accounts receivable column. You may get a customer referral out of it.
&#;&#; Thomas Fact: More than manufacturers have requested a free custom in-market buyer report to see which buyers are sourcing for their services.
Take Advantage Of Modern Technologies
We can't stress it enough &#; it's an increasingly digital world today and the strength of your online presence is more important now than ever. Many manufacturers may argue that they don't need an online presence because they have sustained growth through word-of-mouth referrals and traditional growth methods. But this creates a false sense of security.
Add Videos To Your Marketing Arsenal
Video conferencing has taken a big role in meetings and tradeshow dollars are being shifted toward online solutions. More manufacturers are investing in different ways to stay connected with their customers.
Learn More: 10 Ways Manufacturers Can Spend Their Marketing Budget
But investing in digital marketing strategies doesn't always have to cost an arm and a leg. While it is an investment that secures the future of your business, you can start with small efforts that address your prospects' buying habits. According to Content Marketing Institute, more than half the engineers and technical professionals surveyed for the Smart Marketing for Engineers report indicated that they spend at least one hour per week watching videos for work (those aged 45 and younger reported spending the most time watching videos).
Steel and metals businesses looking for new customers should understand that the workforce is now largely millennials. And in response, smart manufacturers partner with industrial marketing experts to produce videos that keep millennial prospects and customers engaged.
Some machining or steel processes can be complicated for buyers. Videos help explain the size, conditions, capabilities, and products and services available from your business. The other most common reasons manufacturers use videos are:
Videos are easy to share. Videos are visually appealing and make them the ideal format to share on social media and emails.
Videos are proven to increase sales. Reports show that 77% of consumers reported that they&#;d been convinced to buy a product or service based on a video.
Competitors are already using videos. 92% of marketers who use video say it's an important part of their marketing strategy &#; up from 78% in .
And according to HubSpot, marketers who incorporate video in their content marketing strategies have seen 49% faster revenue than those that don't. Manufacturers can get a factory tour or company profile video like the one below produced for free with an advertising program &#; click here to learn more.
Use Industry-Focused Content
Due to the in-person limitations of COVID-19, manufacturers are using the effectiveness of digital marketing to generate new customers.
As expected, companies are 21% less likely to invest in trade shows while the use of webinars & virtual events (20%), search & social media (14%), and websites (12%) all increased in light of COVID-19.
But in today's super-connected digital world, a website is not enough to get more customers. To fuel growth, manufacturers use a compilation of emails, videos, advertising, SEO strategies, and diversified website content.
Start small with an "Industries Served" page on your website and list all the markets your services supply. As you grow, include high-quality photos and graphics to validate the quality of your work further.
"Diversified content on our site has really helped us stand out as a leader in the industry," said Eoin Lynch, Executive Director of Sales and Marketing at Tex Tech Industries. "Some aerospace technology can be complex, but our graphics, datasheets, and videos from Thomas Marketing Services break it down for buyers to understand what they need and how we help them."
Corrugated Metals set a record for quotes and tapped into the aerospace industry after investing in online advertising from Thomasnet.com &#; they were contacted by the U.S. Air Force to create a custom part for them.
"Advertising with Thomas lets us develop accounts that build our backlog and keep us more stable as the economy grows," said Ken Carlton, VP of Corrugated Metals. "One Thomas lead that came to our company spawned an entirely new company for our business."
Steel and metal manufacturing companies looking to grow need to take advantage of the digital revolution not only from a marketing perspective, but to improve operation models and the supply chain. Digitization in the steel and metals industry will give supply chain access to real-time information and appropriately respond to unpredictable changes in the market while decreasing risk and providing growth opportunities.
Success Story: Growth For Continental Steel & Tube Company
The manufacturing industry has always aspired toward supply chain consolidation. Sourcing your products from fewer suppliers can significantly benefit your company's bottom line and reduce frustrations.
This kind of consolidation helped Continental Steel's Don Ascione grow his business in a way he didn't plan for &#; but recognized and capitalized on as a metal specialist with a world-class network. Continental Steel has established itself over the years as a company whose specialty is sourcing hard-to-find metals. Ascione, the company's founder, utilized his operations management background and connections from around the United States and Mexico to amass a tremendous network of metal suppliers.
By supplying numerous fabrication contacts with necessary materials, Ascione also created a tight-knit network of fabricators. This network allows Continental Steel to act as a manufacturer's representative for the fabrication companies and sell projects to customers looking for pressure vessels or staircases (as an example).
Continental Steel has an advantage to really help the customer because he can choose the best fabricator for the job and provide the best pricing on the raw material for the project. The customer gets the best of both worlds, and the network gets more business as well.
When Ascione realized the opportunity to generate revenue from connecting customers with the very fabricators he was supplying, he leaped at the chance. It couldn&#;t have happened without Continental Steel&#;s expertise, knowledge, reliability, and firm establishment as a leading source for procuring elusive metals.
Knowing that opportunities like these are few and far between, Ascione seized the opportunity to nurture this new stream of revenue. Pairing a network of metal specialists with fabricators is tremendously helpful for clients. Rather than looking to Continental Steel for metal procurement exclusively, groups can now find the fabrication services they need for their project, which they previously would have needed to quote from elsewhere.
Continental Steel is now positioned to meet all of its clients&#; needs, from finding whatever metal materials are required for the project, to developing the top-quality final product. Clients know that the caliber of fabrication will be unsurpassed because of the wide reach to find the best for the job.
His team works to find metals and fabricators for his clients so they don&#;t have to do it themselves. And now Continental Steel has become a leading source for metals procurement around the globe and a premier source for custom fabrication, as well.
UNLOCK YOUR FREE PROSPECTING REPORT: See the buyers and companies searching for your services with a free Custom In-Market Buyer Report &#; your next new contract might be on this list
Promote Your Steel Business
Navigating the digital landscape can be tough, along with changing global policies, and complicated distribution channels &#; as a manufacturing business owner, you already have so much on your plate to manage. But Thomas has been powering the manufacturing industry for more than 122 years, connecting buyers to suppliers and helping engineers get their jobs done.
&#;As a small machine shop, it&#;s critical that every marketing dollar I spend attracts the right kind of customers &#; those that I actually want to do business with. My Thomasnet.com program paid for itself within the first 3 months.&#;
Steel and metals manufacturers looking for new customers can sign up for a free company profile on Thomasnet.com to get seen by more than 1.2 million procurement professionals sourcing for industrial products and services.
Our industrial experts have compiled the below resources to help ensure your business grows and continues to prosper no matter what economic or global health situations come your way.
Our related blogs to keep you up to date on the latest industry tips:
Our online solutions to help you grow:
- Learn about our free video content production services to help manufacturers and industrial companies connect with more customers creatively online when travel is restricted.
- Contact us
to learn how you can get in front of qualified buyers and increase your bottom line. Thomas provides
The company is the world’s best Hot Selling Steel supplier. We are your one-stop shop for all needs. Our staff are highly-specialized and will help you find the product you need.
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that fit any size budget.
- To see where you can improve online and how your brand compares to competitors, request a free Digital Health Check.
- Increase your RFQs with a free Thomasnet.com profile and connect with new customers on the platform where more than a million buyers from various industries and geographies source are sourcing for products and services.
- See the exact companies searching for your steel and metals manufacturing services with a free In-Market Buyer Report.
- For articles just like these, subscribe to our daily newsletter Thomas Industry Update.
Editor's Note: If you're sourcing suppliers for COVID-19 items, click here for those manufacturers and distributors. If your industrial business can support the production of essential supplies to combat the COVID-19 outbreak, please complete this form to notify us of your availability and willingness to dedicate resources. Thomas is working with State and Federal Government offices to help mobilize manufacturers to deliver supplies and services.
Overview: Retailers, Suppliers & Mills
When sourcing raw steel plate, purchasing managers have three primary steel plate sources: retailers, suppliers (also known as distributors) or mills.
Retailers include everything from big-box chains &#; such as Home Depot &#; to independent metal specialists, in-stores and online. With retailers, customers can simply walk into a store or browse a website, select an item and purchase the item at will.
Suppliers are &#;material middlemen.&#; They buy steel plate in bulk from a mill at discounted rates, store it in high quantities in warehouses and then sell the material to buyers with medium or high quantity needs.
Suppliers often sell by the &#;truckload,&#; or between 20,000 lbs. and 40,000 lbs. Suppliers offer a greater selection of steel plate product at lower per-hundredweight cost than retailers, since they deal primarily in bulk.
Mills are the producers of steel plate materials and offer a varied selection of steel plate product. In most cases, mills only sell direct to buyers in need of very large volumes of steel plate.
Service centers are another common source for processed steel plate (such as plate cut to specific sizes or shapes), but we will not focus on service centers in this article due to the variety of metal processing service options.
Related: Common Ways Steel Plate is Processed
Choosing Between Retailers, Suppliers & Mills
So which steel plate source is best for you? The answer depends on buyer needs surrounding five primary factors:
- Convenience: how quickly and easily do you need access to steel plate material?
- Product variety: are the grades and sizes you need common or specific?
- Price per hundredweight.
- Volume: how much product do you need?
- Inventory risk: can you buy in bulk and store excess? Or do you need smaller orders delivered over time?
- Buying methods: what options are available for placing an order?
Understanding your specific needs in each category will help determine which sourcing method(s) may be best for you.
Convenience
The most distinct difference between buying from retailers, suppliers and mills is the degree of convenience offered by each source.
Retailers are highly convenient. They carry very few steel plate products, but have these products readily available at all times. Retailers typically allow buyers to place a steel plate order via their website, which gives buyers the option to buy plate in just a few clicks.
Suppliers are significantly more convenient than mills, because they often have deep inventories and multiple inventory locations. They can respond to steel plate needs quickly (sometimes even within the same day), whereas mills usually require more than a month lead time on an order. Some suppliers, like Leeco Steel, are beginning to offer customers the option of ordering steel plate online via an ecommerce website to add convenience to the buying process.
Additionally, suppliers usually have experienced in-house teams that understand how to deliver large steel plate orders, which is an important convenience for many medium-to-large volume buyers.
Mills offer the lowest level of convenience, as they fill their production &#;books&#; (AKA: schedules) months in advance. Suppliers and retailers can handle these longer lead times due to large on-hand inventories, but buyers typically cannot. This is why only large buyers with specific, known material needs tend to purchase steel plate directly from mills.
Convenience of Credit
Retailers usually accept cash, check or credit card payments at the time the order is placed, making them highly convenient for smaller buyers.
Suppliers and mills almost never accept credit card payments due the large value of the average order. In fact, most suppliers and mills require buyers to undergo a business credit evaluation before the buyer can even buy.
Once a supplier or mill extend credit limits, buyers do have the convenience to place orders in advance but pay when material is received. In these situations, mills adhere to a strict 30-day payment window.
Suppliers have dedicated credit evaluation teams to assess credit risk and can therefore offer more flexible payment windows (i.e. 45-60 days), making them more convenient for medium-to-large buyers.
Product Variety
Retailers offer a limited variety of steel plate products. They typically only carry common grades, such as ASTM A36 and AR400, and usually only in smaller sizes.
Mills, of course, offer the highest degree of product variety, as they can produce-to-order hundreds of grades across a wide range of thicknesses, lengths and widths.
Suppliers may not carry as wide of a variety of grades as mills, but they can often quickly procure whatever grades and sizes are needed because they buy from a network of mills. In these situations, suppliers offer a service to customers by doing the sourcing leg-work for them.
Price Per Hundredweight
Steel plate is priced per hundredweight &#; or cwt. Retailers offer significantly higher cwt than suppliers and mills as a tradeoff for the convenience of immediate product access and easy cash or credit payment.
Related: How much does steel plate cost?
Suppliers have stronger buying relationships with mills that allow them to buy steel plate at more competitive rates than retailers and most large buyers. Additionally, suppliers usually have lower operational overhead, as they have fewer facilities and greater fulfillment efficiencies, since their orders are larger in volume.
Mills can sometimes offer a lower cwt price than suppliers (depends on the grade), but they only sell to very high-volume buyers, and orders can take months to fulfill. What buyers might get with cost savings, they lose with convenience and speed.
Average Order Volume
The volume of a buyer&#;s need often helps narrow the choice of supplier. Retailers specialize in handling low-volume needs, especially orders less than 200lbs. Orders under 200lbs. can be shipped via standard ship methods, unlike heavier orders that require freight transit.
Suppliers&#; sweet spot is any order greater than 20,000 lbs./10 tons (about half a truckload) up to whatever inventory limitations the supplier has for the requested grade and size.
It&#;s not that suppliers would never fulfill a low-volume need, it&#;s often that they simply do not have small-sized material. Most steel plate stocked by suppliers is 8-10ft wide by 20-40ft long. This would be well beyond the volume need of many retail customers, who typically request plate under 2ft wide by 2ft long.
Mills, on the other hand, thrive on high-volume orders. Mills produce heats &#; or batches &#; of steel plate products, usually in quantities of 120-150 tons per heat. When mills supply to direct buyers, they are usually supplying one or more heats multiple times per year.
Inventory Risk
One huge advantage of buying steel plate from suppliers or retailers is reduced inventory risk. Buyers can receive the exact inventory they need, when they need it, and not have to worry about running short or not having space to store excess material.
Suppliers offer the lowest amount of risk related to inventory levels, since they themselves have healthy levels of material on-hand and have a network of mills from which they purchase. If one mill delays an order, suppliers can turn to other mills for the material.
Retailers also offer low inventory risk, but have less demand visibility than suppliers (who often sell a bulk of their orders via contract, and can predict demand). For this reason, retailers have higher inventory depletion risk than suppliers.
Purchasing through mills comes with a lot of inventory risk. Buyers typically must buy larger loads of material and store the material until depleted. This requires ample storage facilities and the ability to move and manage steel plate (i.e. overhead magnetic cranes).
Additionally, mills are more at risk of running behind in production. These delays in inventory could leave a buyer scrambling to find material to bridge the gap between depletion and the next mill delivery.
Buying Methods
Retailers, suppliers and mills each offer different methods for buying steel plate, and it is important to consider which method best suits your order needs and which source is able to accommodate those needs.
Retailers offer the most buying methods, with the option to purchase steel plate in-person, on a website or over the . This gives buyers great flexibility in how they can purchase plate materials. However, buying from a retailer tends to be more impersonal, so they may not be able to accommodate special requests for less common grades or extensive processing.
Suppliers traditionally take steel plate orders through direct communication with a sales representative. But some &#; like Leeco &#; also offer the option to buy through an ecommerce website. Flexibility in how orders are placed allows buyers to customize the purchasing process based on their requirements. Buyers with simpler needs who are looking to quickly order a popular plate grade can opt to buy online, while buyers with more complex, specific needs can work directly with an experienced sales representative.
Mills offer the least flexibility in buying options, as they typically take orders via or with a sales representative. Most mills due not offer the option to buy steel plate online.
Weighing Your Options
With each steel plate supply source, there are strengths and trade-offs. Determining how important each factor is for you &#; as well as any other factors important to your business &#; will help guide you towards the right steel plate supply source.
Leeco® Steel is the largest supplier of steel plate in North America and services clients big and small with a wide range of volume and delivery needs. We would be happy to quote your next project and would be honored to be your steel plate supplier of choice. Submit an inquiry here.
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