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Backgrounder

The Industry

 

The magnet industry is big business. In fact, it’s a $3 billion dollar industry worldwide. Magnets come in all shapes, sizes and lifting capacity, and attract any ferrous metal.

 

Industrial magnets serve the industries that keep the nation running, by removing damaging metal from workplaces.  These magnets are critical in ensuring that commerce continues without interruption and with a minimum of downtime. 

 

Here are some examples of how magnets are used:

 

  • On food conveyor belts, to remove metal flakes from chicken nuggets (metal flakes off of equipment during use)
  • In tire shredding, to remove the metal from scrap tires before it is recycled and made into children’s playgrounds and used as the foundation for astro turf fields
  • As attachments to forklifts (which are used in everything from warehouses to service yards)
  • In factories to keep floors free of metal (manufacturing facilities, from automotive, airline plants like Boeing)
  • In tool cribs of manufacturers
  • In recycling, to separate the metal from everything else
  • In the water, for retrieving guns thrown in the water, for law enforcement agencies
  • At marinas, to remove scrap metal
  • At junkyards, to move metal
  • At construction sites to remove scrap metal
  • On airline ground baggage tugs, to remove scrap metal that can interfere with flights, damage jet engines, puncture ground equipment tires and injure employees
  • By trucking companies, to remove nails and scrap metal while loading trucks so they don’t go in truck tires or service vehicles called “switchers” or “yard jockeys”
  • To build bridges, by moving metal beams
  • Near roofs, to pick up nails
  • By utility companies to pick up manhole covers
  • By the military, to pick up scrap metal from flight decks
  • By cities and municipalities to lift covers off sewers
  • By road crews, to remove scrap metal through roadwork or from spills
  • At dumps, by waste management companies, to clean up metal debris
  • In aggregate processing, to extract rebar
  • In pallet crushing/ recycling/manufacturing to remove stray nails
  • In metal fastener suppliers to pick up and weigh/move nuts and bolts and hardware

 

Typical buyers of magnets include foremen, managers, project managers, terminal managers, ground support foremen and safety supervisors

 

The Company

 

Charlie Shields runs this $1.8 million (and growing) company with only himself and one other employee.  How does he do it?

 

  1. First, he outsources manufacturing to some plants in the U.S.
  2. Strong Internet strategy – foregoes traditional media advertising

 

In fact, the Internet brings the company 80% of its new customers, many of whom are distributors and manufacturers reps looking to pick up these lines.  This has enabled Shields Company to profit from an ongoing expansion of its dealer network.  This also reduces costs, because the dealers and distributors (1500 of them now), utilize their marketing capital in their catalogs and supply chain books.  This translates into a snowball effect on new business and repeat business from the dealer.

 

The conversion rate of Internet visitors is 25%, vs. a 1% conversion rate using direct mail.

 

Here are some specific Internet and Web marketing strategies used by the company:

 

  1. Use “mirror sites,” which provide various URLs to represent the company’s product line; these mirror sites enable the company to be ranked within the top 3 positions for nearly every keyword relative to its targets markets – on Yahoo, Google and MSM
  2. Use "log files" to quantify and track unique visitor and monthly statistics.  This enables Shields Company to better determine the conversion rate and sales/call ratios.
  3. Place ads and links in areas which are totally product-unrelated but are very much the target audience (example: placing sites under the heading for "scrap metal" or "architecture").
  4. Integrate video into the sales experience on the website - Flash video with narration specifically.  It answers a myriad of questions in a few seconds and saves the customer service reps from lengthy q&a on the phone. 
  5. Do not post pricing on the Web site so the company can pique customer interest and get them on the phone to ask the price and negotiate if necessary.

 

Story Angles:

 

  • Unseating an industry leader
  • Creating a recession-proof business
  • How to convert a brick and mortar business to a virtual business
  • Building and growing a virtual manufacturing company
  • Running a multi-million dollar company with only 2 employees
  • How to use the Internet to grow your business
How to use guarantees to effectively market and grow a business
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