Made Here: Lifetime warranties drive growing business

Michelle Di Gangi
Posted by Michelle Di Gangi
Small Business Banking

Manufacturing in America is alive and well. In our “Made Here” series, we talk to some of our manufacturing business clients and learn how they’ve flourished in spite of tough odds in recent years.

Jessica Sandler, CEO of KOR-IT, in front of a display of her company's industrial products.KOR-IT Inc. has built a reputation in the concrete drilling industry through a unique offer: a lifetime warranty on core drill machines. By standing behind its products for life, the company, based in West Sacramento, California, has grown steadily. KOR-IT CEO Jessica Sandler says, “Those warranties are why we continue to get business.”

With 12 employees, the company sells equipment around the world. In the Q&A below, it strikes me that the company’s commitment to its employees has to be just as durable and valuable as those warranties.

Q: Given the hurdles of manufacturing in the United States, how have you been able to succeed? A: I believe we would not be able to offer lifetime warranties on our products if we were manufacturing overseas. Those warranties are why we continue to get business, and that’s a primary reason why we maintain our facility here: It gives us greater control over that manufacturing process. Our company has been in business since 1958, and we want to continue to maintain the quality.

So it’s that quality control that you have by manufacturing here?

It’s also the commitment to our employees. We have employees who have been here for 20 years, and they are like family. The company has been in our family for nearly 30 years, and we feel a sense of commitment to the people who work for us, to the quality of our product, and to the customer relationships we have.

Is the ability to customize products an important factor for you in locating your manufacturing in the United States?

Yes. We have our engineers here onsite with us, and the customization needs to be done in-house. There’s really no way to facilitate that overseas.

What’s your business’s biggest obstacle?

It is expensive to operate in California; payroll taxes here are challenging. One of our greatest expenses is the cost of our people. But we have a commitment on a number of different levels to our customers and to our employees. It’s the nature of who we are as an organization.

What words of wisdom would you give someone thinking of starting a manufacturing operation?

If there’s anybody interested in starting manufacturing, I would say talk to people who have been doing it for a long time, or maybe other types of companies. Look at other models to define successful operations, and then try to model after that.

Has your business ebbed and flowed with the economy? And how would you characterize business today versus a year ago?

We weathered the storm through the recession. During that period the government was putting money into infrastructure, so that really moved us through that time. Now the economy is improving, and our sales have increased year-over-year. We have seen the ebbs and flow over the years, but I feel like we are a success story. We are here to stay.

What tips would you give for getting through tough times?

Focus on building and maintaining a strong accounting department that will watch over purchasing, manage inventory, and run a lean operation. Those are things that any manufacturer can look at to get through difficult times. I think they contributed to our success during tough periods. We look at every cost, and we analyze those costs.

Have your international sales helped smooth out the ups and downs, so your business is less seasonal?

Yes, we ship all over the world. Where there are civil engineering projects going on, that is where you’re going to see our products. That does help us when different parts of the world are in their summer months and we are in a winter month, for example.

What do you think might help other manufacturers who are looking at to expand internationally?

There are some programs through the federal government that new manufacturers can look at to help them with their international business. We have used government insurance policies from time to time, and that’s helped us boost our sales internationally. Any time you ship internationally there’s going to be a greater risk on that receivable, so the insurance policies can help small businesses move product overseas with less risk.

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