Pictured Above: Parts for power tools fill the shelves at Weingartz Supply Co.’s store in Farmington Hills. The company announced a joint venture with Ball Equipment, based in Sandusky, to boost e-commerce by selling more parts online. Photo: Weingartz
To boost their e-commerce businesses and in anticipation of future opportunities, two Michigan companies and former rivals — Weingartz Supply and Ball Equipment — are joining forces to form a new online venture that will sell parts for outdoor power equipment and smaller recreational vehicles, such as 4-wheelers and snowmobiles.
The new company, BW Retail Solutions, will run the e-commerce operations and websites for the two family-owned retailers.
"It's a combining of resources," Dan Weingartz, president of the Utica-based business, said. "Ball Equipment is a company that has done really well in e-commerce. They have been growing incredibly fast. They are six times larger than they were 6 years ago, and really could use our infrastructure help, access to capital and access to a company that's been there from a growth perspective."
Initially, he said, Weingartz — a chain of five stores that sell outdoor power equipment — sought to buy Ball Equipment outright.
"But, they didn't want to sell," Weingartz said. "Their company is growing like crazy. They are doing exceptionally well."
Under the complex agreement that the two privately held companies came to after nearly a year of negotiations, they will consolidate marketing and online fulfillment operations in a 45,000-square-foot warehouse in Chesterfield. The warehouse is a former manufacturing facility that Weingartz purchased.
The joint venture will manage marketing, fulfillment and customer service for both organizations’ e-commerce businesses.
Chris Ball, vice-president of Ball Equipment, was named CEO of the venture, and Weingartz purchased a minority stake in Ball.
“We could not have asked for a better opportunity or partner,” Ball said. “We know that as retail environments change, we have to continue to innovate, diversify and stand together with like-minded partners in order to be successful. This joint venture begins a new chapter in the long history of both family-owned companies.”
The venture is expected to hire 6-10 additional workers immediately, and more as the venture expands.
For Weingartz, the deal is an e-commerce play that gives it expertise in an area that it sees as essential to the future of the company — and the retail industry in general. Now, only about 5% of Weingartz's sales come from e-commerce, but, Weingartz said, it is the fastest-growing part of the business. E-commerce for Ball's is more than 40%.
About 95% of the e-commerce business for both companies is from parts and accessories sales.
Many companies in the last few years — especially department stores — have been scrambling to hold on to their customers and purchase specialty retailers that have robust online sales as customers reach for their keyboards and phones to shop, rather than get in their cars and head to the mall.
Walmart, for example, is paying $51 million for Moosejaw — a Madison Heights-based company that specializes in outdoor recreation apparel and gear and is known for its quirky, cutting-edge marketing — as a part of multiple acquisitions in hopes of strengthening the global retail juggernaut's online offerings.
BW Retail Solutions, Weingartz said, helps position the two companies — which had been friendly competitors — to work together to pick up substantially more business from Sears, which also is in the power tools parts business, as the national retailer struggles to stay in business after years of losses and declining sales.
Last week, Sears Holdings warned it may fail as a going concern.
Weingartz said the company doesn't view e-commerce as a replacement for brick-and-mortar stores. The company was started by Weingartz' grandfather in 1945 as a feed and farm supply store in a sparsely populated part of Macomb County. His father turned the business into a power equipment superstore.
Ball Equipment, like Weingartz, also started in the 1940s. It is based in Sandusky, in the Thumb, and has a store in Richmond. In addition to lawn mowers, snow blowers, and other power tools, it also sells power sports equipment — including all-terrain vehicles and snowmobiles.
"We think that brick and mortar is our identity and will always — or at least for the foreseeable future — be the driver of our business," Weingartz said. "But, people want that complementariness. They want that ability to shop online, and have that global reach — especially for things like parts."
Moreover, he added, a more robust online business allows the company to sell to customers all over the country.
Locations: Utica, Ann Arbor, Cedar Springs, Clarkston, Farmington Hills
Locations: Sandusky, Richmond