Global Fastener News

September 5, 2000 FIN – Is the future of the fastener industry on the Internet? Two industry veterans who joined major fastener Internet portals in the past few weeks could be indicative of the trend.

Harold “Ben” Benson of Distribution Dynamics Inc. has been in the fastener industry for more than 35 years. Instead of thinking about retirement he is making a career change aimed at the future. Benson is the new director of imports at www.e-fastener.com, which is owned by Partini.com.
Jerry Chapman, after 10 years as vice president of MNP Corporation’s Fastener Distribution Group and a year as a consultant for Heads & Threads International, is the new U.S. CEO of FastenerExchange.com.

Why did Benson, a former president of both the Western Association of Fastener Distributors and Los Angeles Fastener Association, leave traditional distribution to join Larry DelSanto, the former CEO of DDI, in a startup Internet business?
“It is a new age,” Benson declared. “The Internet offers a more productive way in which business can be achieved and serve both purchasers and suppliers.”
Benson, who used a drafting board and India ink when he started in fastener engineering, described the Internet as “stimulating. It is a great opportunity and a great challenge.”
Benson started his career in engineering at Chicago small diameter screw and nut manufacturer Central Screw. He was transferred to California to manage West Coast operations. He became president of Consolidated Bolt & Nut, which was acquired by Century Fasteners. Century was subsequently bought by DDI.
Chapman’s road to the information highway was a personal interest in Information Technology at MNP. He has been a member of the National Fastener Distributors Association technical committee. “I’ve always been a computer geek,” he confessed.
Chapman had “voiced my opinion so many times” about what the IT department could do that eventually his father-in-law, MNP chairman Larry Berman, gave him responsibility for the department.
Initially Chapman was solving Y2K problems, but he kept an eye on how IT could increase profits by reducing costs.
“The strategy to improve the bottom line had always been to increase revenue,” he recalled. “IT offered a new way to reduce costs.”
At Heads & Threads he attended a presentation by FastenerExchange.com and “became a believer.” In the European edition of Time magazine (see Media Spotlight: Dicke), he read that Nickolas Dicke had come to Chicago, to open a North American branch, because FastenerExchange hadn’t found the right person here.
Chapman flew to Germany to learn more about FastenerExchange and Kristian Dicke, who gave up executive status in the family fastener manufacturing business, Altenloh, Brinck & Co., to start the Internet venture.
He toured ABC to learn about the Dicke’s fastener background. “I wanted to smell the oil,” Chapman explained.

Access to the World
The Internet is more than selling fasteners off your web site, Chapman emphasized. It is reducing costs and growing business without adding more purchasing staff and salespeople.
Chapman recalled his days of sales calls for MNP and finding fastener buyers “with a mountains of sheets of paper on their desks.”
“I told the buyer then that my purpose was to help eliminate those pieces of paper,” Chapman recalled of working with fastener buyers on early programs.
The Internet goes well beyond reducing paper. “It also is about globalization. FastenerExchange opens up the world,” Chapman told FIN. “We have not had a lot of companies in Poland or Russia supplying fasteners outside of Europe. With the Internet we can do that.”
FastenerExchange succeeds by making a commission from the buyer and seller consisting of 1% to 2% on the transaction.

Should Distributors Worry?
Fasteners can be bought and sold around the clock and around the world on these “real-time trading platforms. Manufacturers and distributors can meet at the marketplace to exchange their short- and long-term purchase and sales requirements anonymously,” Chapman explained.
He described the trading platform as “similar to a stock market, where short- term bids and offers are matched to each other and Requests for Quotes can handle long-term purchases.”
“No, we don’t have a warehouse,” Chapman pointed out. “We are virtual. There will not be a huge difference in the bricks & mortar part of the business.” Distributors own the stock, Chapman added. “FastenerExchange is built on the premise that it makes a commission on matching the buyer and seller. We believe in the current model of manufacturers and distributors. There is not a dot-com that is going to bridge that relationship.”
After a 35-year career in distribution, Benson told FIN he is certain the fastener Internet portals will not replace distributors. “I don’t think that is feasible,” he explained. Those who talk of treating fasteners as just a commodity on the Internet are missing the point that fasteners “are extremely unique. There have to be people who understand the application. Some nuts and bolts may be catalog items, but many OEMs want very unique products which are custom manufactured. Engineers are not limited to stock items from hardware stores.” Chapman noted that FastenerEx-change is available only to fastener manufacturers and distributors and not to OEMs.
Chapman described the fastener Internet portal/exchange as “a way for buyers and sellers to work differently than before. The objective is to become more efficient and reduce costs together.” Chapman noted that buying a container of nuts overseas “may take a long time. You have to constantly negotiate the prices to ensure that you will get best price. Weeks go by, and the pieces of paper stack up.”
With the Internet portal, the distributor can make that buying decision in minutes or a second. “It doesn’t matter that there is a 12-hour time difference,” Chapman pointed out. “Buying and selling can be performed in moments over the Internet.”
Benson readily admits he doesn’t understand the Internet. “I’m not a computer guru. When you talk program, you are speaking a different language.”
He isn’t there to write software programs but “to use my fastener knowledge for the benefit of users of the system,” he explained.
Benson developed DDI’s import center.
After a proliferation of Internet sites some industries are already seeing a shakeout. That increases the risk Benson is taking in changing jobs.
“There is exciting growth that is going to take place,” Benson predicted. “And it is a question of who is going to succeed.”  ©2000/2014 Fastener Industry News.
For information on permission to reuse or reprint this article please e-mail: FIN@GlobalFastenerNews.com

Editor’s Note: Their new addresses are: Jerry Chapman, U.S. CEO, Fastener Exchange.com, 200 Wacker Dr. Suite 3100, Chicago, IL 60606. Tel: 312 674-4689. FAX: 312 674-4501. Chapman cell: 248 505-9325. E-mail: jc@FastenerExchange.com Web: www.FastenerExchange.com
Ben Benson, Partini.com, 14241 E. Firestone Blvd. #400, LaMirada, CA 90638. Tel: 562 802-6151. E-mail: hbenson@partini.com Web: www.e-fastener.com