By Peter Saunders
Established in 1985 in Mississauga, Ont., Metal Supermarkets has grown to become the world’s largest supplier of small quantities of metal, serving everyone from engineers to hobbyists. By filling a niche in the metal industry’s distribution chain, the franchise system has established its brand and continues to grow in Canada, the U.S. and the U.K.
“The company was founded by Bill Mair, who’d had a long career in aluminum manufacturing,” says current president and CEO Stephen Schober. “He saw there was a void in the industry. Larger warehouses might have millions of dollars’ worth in high-volume metals, but Bill recognized the demand for small quantities of a broad range of metals, cut-to-size for fast pickup or delivery. It was a really good idea and no one else was doing it.”
Mair soon had not only customers at his door, but also businesspeople interested in opening more locations elsewhere. As he had little capital available to fund such expansion, he began franchising in 1989. The initial system growth in Canada was followed by franchising in the U.K. starting in 1994 and the U.S. in 1995.
The company now comprises 67 franchises serving more than 60,000 customers as a ‘one-stop shop’ for small metal quantities. These customers are primarily other businesses—including manufacturing facilities, maintenance and repair departments, tool and die makers, fabricators, machine shops and prototype builders—but also include government departments, military organizations and the occasional hobbyists and do-it-yourself (DIY) homeowners.
“It’s like a convenience store for metals,” says Schober. “As it’s mainly a business-to-business (B2B) model, you build sustained customer relationships, which are better-served by a local franchisee who can understand local customers, rather than a top-down corporate approach.”
Given the niche awareness of the Metal Supermarkets brand, it should come as no surprise many franchisees are former customers.
“We attract engineers and other analytical, process-oriented people who are often already familiar with metals,” says Schober. “Before the sign on, they read all of our information, do their research, understand the B2B model and appreciate the longevity of our brand.”
The franchisees frequently buy metals from major service centres in their local markets, often within the same industrial suburbs as themselves and their customers. Then they add value by cutting, shearing, hole-drilling, bending, plasma cutting and waterjetting. Their businesses are able to co-exist happily with the larger suppliers because they look after very different customer needs.
“Being close to and convenient for our customers and suppliers helps keep our costs down,” says Schober. “We can also help customers source harder-to-find metals by trading inventory between our branches.”
For these reasons, potential targets for further international expansion are other heavily industrialized countries with large manufacturing bases, including Mexico, Korea, Japan, Malaysia and Indonesia.