Entrepreneurs often set their sights high, aiming for the biggest clients with the most money to spend. But as Kent Adhesive Products Co. (Kapco) found out, sometimes targeting the little guy can result in tremendous growth and profit.
With an extensive background in the adhesive coated papers industry, Joe Barnette had often encountered small businesses that were not able to meet the minimum purchase requirements demanded by that industry.
With that niche begging to be filled, in 1974, Barnette founded Kapco, a coater and converter of flexible materials which applies pressure sensitive adhesives to flexible materials. Companies that before had to buy in large quantities or do without flocked to the new business, which did not have the larger companies’ strict mill minimums.
“If someone only needs 10,000 labels, that’s not a whole lot of stock,” says Brenda Shick, vice president of marketing. “They don’t need master rolls.”
Barnette says that when he started selling at less than the mill minimums, he was the only one in the country doing so. But he had just a small window of opportunity before others quickly followed in his footsteps.
He targeted customers whose small orders were routinely rejected by major manufacturers because they weren’t large enough to bother with. He reasoned that if the huge minimum order the mills required customers to buy were sliced into small, manageable quantities, low volume users would pay a reasonable premium for such custom service.
“Everyone was looking for the big order and didn’t want to sell” to the smaller business,” says Shick. “They were looking to sell a carload or a truckload, but printers with a short run job maybe didn’t want to buy a truckload of florescent orange” labels or other items.
Although technology has vastly improved since the company was founded 25 years ago, “those needs still exist today,” Shick says.
The company now includes a graphic division, which is a major source of custom punched, adhesive-coated vinyl used in 20,000 U.S. and international sign shops; and a library products division which includes self adhesive book covers, repair material and preservation products. That division arose out of the company’s ability to produce small salable items which could be cut like paper dolls from enormous rolls of materials.
As Kapco is celebrates 25 years in business, it has grown from three to 115 employees who share directly in the company’s success with annual bonuses. A 90,000-square-foot plant built in 1996 has the capacity to expand to twice that size as the business continues to grow.
Kapco’s customers have rewarded the company’s dedication with loyalty. Barnette believes three of his current customers have been with him since the beginning.
It now has Fortune 500 companies as customers and does more than $20 million a year in sales. But it remains true to its roots, continuing to serve the needs of the smaller business community.