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Inventory control is key to company's success

Rochester Business Journal
April 25, 2014

Inventory control has been key to Acker-Pak LLC’s growth, said John Siciliano, vice president and general manager.

But for the Rochester supplier of packaging material and janitorial products, the goal is not to keep inventory as close to the bone as possible but rather to build it up.

“Right now, we’ve got $1.5 million in inventory,” said Siciliano, gesturing proudly toward several floors of jam-packed warehouse space stretching out behind his modest office in the cluster of former lumberyard buildings the firm occupies on Hollenbeck Street.

In addition to packaging tape, packing peanuts, Bubble Wrap, shrink-wrapping film and similar products, Acker-Pak also sells and services packaging machines. Janitorial supplies such as toilet paper and cleaning solutions are a relatively small part of its business.

“The janitorial supplies are mostly for customer convenience,” Siciliano said. “We don’t really make much money from them. Customers like us to be a full-service supplier, but 90 percent of our sales is in packaging supplies.”

Maintaining a huge inventory has been a central pillar of Acker-Pak’s ability to post double-digit growth, Siciliano said. Customers know that whatever supplies they might need, Acker-Pak will be able to deliver them on short notice.

Another key is the firm’s willingness to sell in small lots. Acker-Pak’s biggest competitors are xpedx, International Paper Co.’s distribution business, and Unisource International Inc., which are planning to merge, Siciliano said. Both have minimum-order requirements that smaller customers find hard to deal with.

Other competitors are relatively small firms that do not maintain inventories as extensive as that of Acker-Pak and thus cannot match its service, he said.

To keep enough products on hand to satisfy customer demand without breaking the bank, Siciliano keeps close tabs on what sells. But he also watches commodities markets with a trader’s eye.

Petroleum, lumber and plastics prices affect costs of the corrugated materials, tape and shrink-wrap manufacturers Acker-Pak buys from, he explains. If he can anticipate price swings in the commodities market, he can buy quantities of supplies at optimal prices.

Acker-Pak employs 12 people, including drivers, warehouse workers, a few front-office support workers and Siciliano. It sells to a mix of mom-and-pop companies and a few big clients.

Its larger customers include Pepsico Inc. and Wal-Mart Stores Inc., both of whose northeastern regions Acker-Pak supplies. Its own drivers handle deliveries in the Buffalo-Rochester-Syracuse region.

Deliveries to points as distant as New England and Maryland are handled by trucking firms. Arrangements such as a deal Acker-Pak cut with a pallet company whose trucks carry Acker-Pak orders on return trips from pallet deliveries help keep freight costs down, Siciliano said.

Acker-Pak is a family affair. Siciliano’s uncle, Vincent Stango, is CEO. He manages the firm’s finances while Siciliano runs operations, said Stango, who lives in New Jersey, where he also runs a staffing service and has worked as an information technology consultant.

Acker-Pak got its start in 2003 when Stango was looking to get into a new line, the brick-and-mortar of business, as opposed to consulting. Another nephew—Siciliano’s cousin—had the idea of getting into the janitorial supply business.

In 2005, Stango acquired Acker-Pak—then a much smaller Rochester firm—and merged it with the firm he had started with his nephew. He brought in Siciliano after the first nephew left.

While Acker-Pak has enjoyed growth in the 30 percent range for the past three years, its most explosive spurt of expansion came in 2008 when it posted 300 percent growth, Siciliano said.

Siciliano and Stango hope to grow the firm further. Siciliano believes Acker-Pak could one day see revenues of $100 million or more. Both see expansion into new territories as needed to realize that kind of growth and are not yet sure how that might be managed.

To move into new territory, Acker-Pak would need a facility and staff. Acquiring a small distributor in another state—Pennsylvania, perhaps—might be the way to go, Siciliano said. But they also could consider buying or building a facility and hiring staff in a new area.

For now, both men said, they will keep an eye on the market.

The Rochester Top 100 program is presented by the Rochester Business Alliance Inc. and KPMG LLP. Launched in 1987, it recognizes the fastest-growing private companies in Greater Rochester. This year’s Rochester Top 100 event will be held Nov. 5. For more information, go to rochesterbusinessalliance.com.

4/25/14 (c) 2014 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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