E-Commerce Case Studies: How Entrepreneurs Use the Internet in Their Business
By Beth E. Koch
Going Global: Taking Recycling to the Next Level with Government Contracts
Shane Schmidt
Pro-Tainer
Pro-Tainer is a business that designs and manufactures containers for the recycling industry, run by owner Shane Schmidt. He runs the $2.5 million dollar company from rural Alexandria, Minnesota, but none of his customers are located there. Instead, Schmidt says the business is U.S.-wide and expanding globally.
Because he uses the Internet to conduct business, Schmidt has been able to secure lucrative military contracts with the U.S. government. “As a result, Pro-Tainer products can be found from California to New York, and in Canada, Japan, and Guam. “When we started back in 1990, we did most of our (customer contact) through direct mail and phone communication. Now we’re doing a lot of (communication) through the Internet. …Email is probably one of our biggest assets. We do a lot of government contracts and we’re dealing with the United States government, and everything’s pretty much done by email. I mean we get orders, bids, quotes, all kinds of stuff over the Internet…even payables and receivables”.
“We (supply recycling equipment to) a lot of the military bases. That’s how we ended up in Japan and Guam. We’ve got some stuff that’s going out to Greece that’s sitting out in Norfolk, Virginia right now.” He explains how the business works, “We put in the recycling equipment, the containers, the boxes, whatever it takes. Well, for example, when the boats come in to Oakland or San Diego and they come off those ships, they have to recycle all that stuff (refuse). Back in the ‘40s when they had World Wars they just dumped it at sea. They can’t do that anymore, so they bring it in and all of our containers are sitting there waiting for them.”
Pro-Tainer is 13-years-old and owner Shane Schmidt got some help from the local Economic Development Corporation in the beginning. He tells how he started the business. “I come from the school of hard knocks—I’m sure you’ve heard it many times—I graduated from high school, went to work for a company, and while I was at that company--I started out as a welder and I worked my way through the system—I took night courses at a technical college here in town. I was aggressive—I wanted to know what was going on--didn’t want to be a welder the rest of my life. At one point I was the general manager of the company. I went from a welder to literally running the place.”
Eventually Schmidt began inventing products for the company. “When I was general manager, we made rubbish containers, roll-off containers, and we had just started dealing with recycling. Recycling was in its infancy at that time in 1990. I had invented a trailer that you used for doing curbside recycling.” It wasn’t too long before the owners decide to sell the company. “And when they moved to Valley City, North Dakota they obviously took that (design) with them--because I was working there at the time.”
“I have a natural knack for designing and building things. I can look at (a product design) and say, we should do this, do that, tweak it, make it a little better. So when (the company) moved to Valley City, I decided to start my own business. I came in and I was going to concentrate strictly on recycling. I knew enough about what I was doing and I started my own (company).”
“Recycling was in its infancy and I was in the process of designing a couple new pieces of equipment…they decided to get bought out, went there (to North Dakota), and they weren’t doing much in recycling, so I took the niche market and put a lot of effort into recycling equipment and (now) I’ve probably got about five to six different designs that we do and there’s probably three of them that nobody else in the country does.”
Schmidt agrees that having a web site positively contributes to the growth of the company. “(Without the Internet,) we probably would get there but the growth would be slower. The turnaround’s so much faster. The reaction time’s so much faster. … Without the Internet and without our web page, I don’t think we could have done business with the United States government. That’s probably what got us in the door. We were one of the frontrunners in getting involved with them (in the products that we supply). Not having that, I don’t think we’d be in there today. It really is that important to them. They do everything that way.”
In 1990, very few businesses had home pages on the Internet. “When we first started the web page, we were one of the first ones in the area up here. We were working with Economic Development of Alexandria setting up our web page. We have a technical college up here and we had a student (design the web page). And he basically used us as his school project—that’s kinda how we got started in it. So with him and the help of the Economic Development Center they got us on (the Internet). Right now, the Alexandria newspaper up here does the maintaining on it. We have hired them and they keep it up and watch it. It’s a support system and it’s great.”
Even though in the beginning when start-up capital is an issue, designing and building a web site yourself might be attractive, Schmidt also warns that there are some things to think about when hiring an outside expert to do the work for you. “Make sure that you’ve got somebody who’s familiar with web pages—someone who’s done it and somebody that’s got some experience. There’s nothing wrong with a student doing it, the only trouble is that it’s hard to get back in there and fix it after he’s gone. (After he left school) I had nobody to service it. So then I had to find somebody that could pick it up cause there were some things that needed to be changed as your product changes…so I guess my recommendation if you’re going to get involved, find somebody that knows what they’re doing, unless you’re good at it yourself. Make sure you’ve got somebody that knows what they’re doing. And they are going to be around to host it, service it, do what it takes to get it done.”
Long Distance ConnectionWhen working long-distance or coordinating among multiple international locations is a factor, working via the Internet is easy. “We’ve got stuff sitting from Japan to Guam— and (those customers are) in different time zones, so we can get emails overnight and we can respond to them the next day, and they can respond again at night, so it really works nice.”
Selling on the Superhighway
Communication is a big key to working with the government. “We also use (email and the Internet) for doing bids and quotes. I mean communication’s just huge right now. I know we use the Internet for selling.” And Pro-Tainer uses the Internet to gather intelligence on their competition as well. “We do a lot of research to see what the competition’s doing out there. See what they’re offering different than what we might be. Even though we are one of the front-runners when it comes to recycling equipment.”
One of the big benefits of having a web site is Pro-Tainer’s ability to showcase its products. “We have a web page on Pro-Tainer that has all of our equipment listed on it. We use it for selling. We can actually communicate with (prospects), even if you’re on the phone (and looking at) the web page (at the same time) you can go back and forth with (customers) on our equipment.”
Products can be fully-featured on a web site, and customers can view the full-function-mobility and movement of each different product. “When we originally got into it, you couldn’t show the product very well. Now that you’ve got parts moving and different things, you can actually show it almost like running a movie. You can do some (motion graphics). When we first started, we didn’t have that. So to try to sell a product that has moving pieces was a little tougher. (Now,) showing some of the things we do, and how (the product) works, makes it a little bit easier to sell.”
Handling Customer Service ExpedientlyPro-Tainer also uses its Internet connection and email to handle customer service and to get customer problems solved quickly. The technology has enabled speedy response times and happy customers. “When someone might have had something that happened to a piece of equipment, they can send us back pictures, or we can communicate back and forth on how the equipment works with our customers through service manuals, so it’s a pretty great asset right now the way things are done. Just as an example, we had a customer call this morning who had received one of our products. He took pictures of it and emailed it to us this afternoon, right after lunch. That would’ve been a three-day process before you could react to it. By the time he had the pictures developed, mailed them to us, heck, it would’ve been next week.” Working out solutions over the Internet saves time and hassle for customers and for Pro-Tainer. Keeping customers happy means keeping those people as customers for a long time.
Success in Rural MinnesotaThe Internet contributes to successful businesses from the city to the country. Although Alexandria is considered a rural locale, Pro-Tainer has developed a thriving business. So what difference has the Internet made to Pro-Tainer’s business? “We went from the first year doing $400,000 to doing $2 million to $2.5 million in sales now…and I would say the Internet had a lot to do with it, because you don’t have to do as much advertising. (You can) Call (a prospect) and tell them, “take a look, we’re here” (and give them a web site address). So that’s kind of a nice deal.”
“Without the Internet, I don’t think I’d be in Greece or Japan or any of those places—it just would be too hard to communicate with them. So it works. It works well.”