Come face to face with change and there are basically two courses of action to follow: embrace it and move forward; resist/reject it and wait for whatever happens. History is littered with the likes of those that have chosen the latter course. Consider for a moment everyone from manufacturers of buggy whips to typewriters, who have resisted change and today remain firmly locked in the pages of history books.
Harvey Gerstman (right), who founded Harvey Gerstman Associates more than 36 years ago, seen here with Dan and Linda Gerstman, has seen the agency aggressively expand into the e-commerce market.
There’s no better example of an independent manufacturers’ representative firm that has chosen and benefitted from following a different course that allowed them to embrace and grow with change than Harvey Gerstman Associates, Inc. (HGA).
Dating back to its humble beginnings more than 36 years ago when founder Harvey Gerstman opened his doors in Hewlett, New York (Long Island), with just $18,000 in guaranteed commissions, the agency has grown today to where it boasts income well into the millions representing manufacturers to retailers, distributors and more recently expanding into e-commerce channels. The Gerstman Group has grown substantially, delivering integrated sales and merchandising solutions nationally.
Learning From the Past
Perhaps it’s the philosophy of change described by Dan Gerstman, president, that has guided the company through its consistent growth over the years. “One of the things I realized a long time ago,” says Gerstman, “is that in business you can’t control what happened in the past — you can only learn from it. And, that’s what we’ve done. The quicker you can recover from losing a major line or getting over the loss of the retailer that just got bought out by a competitor, the better off you are. When things like that happen, what you’ve got to do is regroup, trust the people around you, embrace a vision for the future and move on. That’s exactly what we’ve done on a consistent basis.”
To put that philosophy in perspective it’s helpful to remember what HGA looked like when Agency Sales last visited the agency in 2000. At that time the company had 140 sales associates, covered a territory of the Northeast and Middle Atlantic States and numbered among its customers home centers, specialty retailers, distributors, catalog retailers, and industrial/commercial supply companies. Flash forward to today and among the major changes in the company’s profile is the fact that it covers the entire United States and is a major presence in placing manufacturers’ products in the hands of several of today’s more recognizable e-commerce retailers. In addition, its 200 full-time employees are complemented on a monthly basis by more than 600 part-time employees. These monthly part-timers perform work for retailers and manufacturers primarily providing local merchandising services.
Gerstman explains that the move from a regional to a national firm occurred “When manufacturers and retailers began asking us to provide services we offered beyond our normal coverage in the Northeast. We realized that in the business we were in it was going to be impossible for us to continue to grow if we served only the Northeast. We knew that if we were going to grow we were going to need a workforce in all 50 states. A major concern was certainly that the majority of our management and field staff were located in and lived in the Northeast. We had to think about having people travel and actually having people live in those areas. That’s what we decided to do and it worked for us.”
The HGA Family
Gerstman points to the key HGA personnel who were faced with that change and made it work. Change like this doesn’t take place in a vacuum and he is quick to point out that the successful changes the agency has navigated were only possible because of the HGA family. “Over the years, Harvey Gerstman has been and continues to be our inspiration. A key family addition was when Linda Gerstman joined us in 2001. She quickly developed tremendous working relationships in the retail space and is now recognized as a leader in retail selling strategies.” Add to that the contributions of Matilde Tysz, chief operating officer; Brian Bair, senior vice president of service; Sean Fitzgerald, senior vice president of service; and Gregg Gerstman, senior vice president of marketing and business development, and you have the initial ingredients for HGA’s recipe for success.
According to Gerstman, “Our more recent growth into the e-commerce arena is a classic example of change. Sometimes our ideas for change are internal and other times they come to us from the outside and we make a decision whether it’s good for us or not.
“Four years ago, seasoned home center veteran Steve White contacted me and explained how he was starting a small rep agency specializing in something called ‘drop-ship e-commerce.’ His major concern was that he didn’t want to be all on his own. He came to our offices and explained what that concept was.
“Unbeknownst to us there was enormous demand to match manufacturers’ complete product lines with major e-commerce retailers. These fast-growing e-commerce retailers were all in the process of adding as much product as possible, which helped us to expand into many new home products categories. Once items are added, products are purchased and the supply chain is quite simple. For example, consider buying an umbrella and patio chairs for a backyard. The customer goes to the e-commerce site and buys from the retailer, but the products are drop shipped directly to the home from the manufacturer.
“This is a concept that was brand new to us. It obviously interested us and we hired Steve as our director of e-commerce. About one year later we made a further investment in what is called ProductCentral.”
Members of the Harvey Gerstman Associates team (left to right) include Matilde Tysz, Dan, Harvey, Linda and Gregg Gerstman.
E-Commerce Effort
ProductCentralSM is the Gerstman Group’s (www.gerstmangroup.com) online marketplace where nationally recognized e-commerce retailers go to discover high-demand products for the home from hundreds of leading international manufacturers. The entire system was designed internally by Marc Langone, the head of technology at The Gerstman Group. Included in the products are home furnishings, outdoor living, home improvement and other licensed products. Among the e-commerce accounts that make use of ProductCentral are The Home Depot, Wayfair.com, Amazon, Walmart, and Bed Bath & Beyond.
For manufacturers, the process of participating in ProductCentral is simple:
- The Gerstman Group team uploads a manufacturer’s product information, photographs and pricing to ProductCentral.
- Manufacturers continue to regularly provide ProductCentral with updated product and pricing information to ensure that e-commerce buyers have the latest information available.
- E-commerce retailers browse a manufacturer’s product line in a familiar online catalog format, select the line or individual products that they wish to add to their online stores, and then easily add the line or products to their stores.
- When consumers purchase products from the e-commerce stores, manufacturers receive orders directly from the retailers and drop-ship the products to the consumers.
While Gerstman explains the sales that are accomplished in this manner are “just one at a time, at the end of the month, the numbers and the commissions earned are sizeable.”
There’s another benefit to this activity, according to Linda Gerstman. “The sales we accomplish on the dot.com site open doors for us in the brick-and-mortar world. What it does is to serve as a proving ground for what we can do for those ‘Doubting Thomas’ brick-and-mortar locations. It also helps us to understand where the geographical hot spots for sales are in the country.”
The agency’s founder Harvey Gerstman adds: “When the merchant realizes how well these products move on the Internet, they then ask themselves whether they should be stocking them in their physical locations.”
But the benefit of this Internet presence, continues Dan Gerstman, is that “Merchants only have so much shelf space. In the typical retail store there’s only room for so many items. On the Internet, there’s room for everything. Shelf space is absolutely unlimited. All you have to show are images and prices. We only represent those companies in this space if they are willing to drop ship one at a time. This is an interesting avenue for manufacturers in that it allows the American public to choose from items that are not in stores. In reality it’s a gigantic catalog that’s been unleashed online. There are a lot of individual buyers out there and thus far we’ve doubled our sales each year and forecast more than $1 million in commissions in 2015.”
Seeing the Future
Linda Gerstman adds that “What we’ve done here, meaning the changes we’ve made, serve as an example of what differentiates us from other independent sales agencies. I give a lot of the credit to Dan for taking advantage of change, for investing in technology and for putting his money where his mouth is. I’d call Dan a visionary, that is, someone who can feel what’s coming. While he embraces change, at the same time he’s cautious and conservative about running down a path that may be filled with difficulty. By having the type of leadership we have at HGA, it’s made all of our jobs easier.”
If going national, establishing a rapidly growing e-commerce presence and directing manufacturers and retailers to ProductCentral are prime examples of the changes HGA has successfully embraced, there’s much more to the agency’s story. But if that story is replete with change, one thing that hasn’t changed over its history is its belief in the importance of relationships. According to Dan Gerstman, “Establishing, strengthening and maintaining relationships are they key reasons why we as an organization have been able to succeed as well as we have. This all goes back to the core principles of our company. If we serve our customers and principals with integrity, continue learning what they want and need and can fill that need the right way, then we’re going to be the ones that they always call.”
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