Rayco Nailing Equipment Provides Great Value: Versatile Wood Fabrication Focuses on Quality, Custom Sizes and Prompt Delivery
Versatile Wood Fabrication: Staying small and focused doesn’t bother Al Gentile. He prefers life that way. He has relied on Rayco nailing equipment for years to service customers and produce custom pallets and packaging.
By Rick LeBlanc
Date Posted: 2/4/2019
Anyone can put a nail in a board, Albert (Al) Gentile, the owner of Versatile Wood Fabrication, told me recently. “The only difference is that mine go in straight!” he said wryly, alluding to his company’s attention to quality. Versatile’s focus is on precision custom products, on-time delivery and finished inventory available on hand. It typically services customers within a 120-mile or two-hour radius from its location in Johnstown, New York.
Gentile is a straight shooter in more ways than just driving nails. He shared with Pallet Enterprise his candid thoughts about the trials and tribulations of running a successful custom wood products business. In addition, he spoke about the challenges of succeeding in an industry where wood pallets are systemically undervalued, and where the availability of good manual labor is increasingly hard to find. His thoughtful approach to success has been to remain small, with an emphasis on custom offerings, great service and effective cost management. In no small part, he relies on three Rayco nailing machines to service customers.
Before Al got into the custom wood fabrication business, he owned and operated an automated car wash in Johnstown. He was looking for a better opportunity. “We could only do so many cars and that area was getting kind of depressed,” he said.
Local Conditions Spurred the Pallet Business
The local economy hasn’t always been weak. With the abundance of trees in the foothills of the Adirondack Mountains as a source of bark, Johnstown and the neighboring city of Gloversville had emerged as important centers for leather tanning in the 19th century. They also became important centers for glove production in the first half of the 20th century. Production gradually waned over the second half of the century, however, leading to the increasingly soft economy Al Gentile found himself facing in the 1990s. But then a fresh idea literally arrived at his front door.
“What happened,” Gentile explained, “was that one day, a copy of Pallet Enterprise arrived at my doorstep by mistake. I looked at it and thought maybe this is something I could do, and that’s how I got started.”
Versatile has always done new pallets. At the beginning, back in 1999, Gentile got to know the purchasing manager for a contract packaging company. He told Gentile he would give Versatile a shot when something came along. That first something turned out to be an order for 10 piano pallets. “That was the first job I ever did,” he said. From that point on, he began dealing with some pallet brokers and the business grew.
“I rented a little place from a guy I knew, and we started from nothing into what we have become today—with ten times the headaches and ten times the bills,” he laughed. Unfortunately, the existing production facility was only about 1,000 square feet and turned out to be highly inefficient. The intense amount of double handling required was eroding the company’s profitability.
Working with local economic development officials, Versatile found an affordable new location in an industrial park in 2005—affordable rent was one of the few advantages of local business conditions. Initially the business and its outside storage faced the street, but the appearance of the industrial park from the curb became a concern.
“Pallets can be messy,” he said. “The landlord thought I stuck out like a sore thumb when cars would go by.” The landlord then moved the pallet company to a back facing location that would not be visible to passing vehicles. They have been there ever since that time. Versatile purchased the location in 2012. It includes a 15,000-square-foot manufacturing plant, another 10,000-square-feet of inside storage, as well as a four-acre paved yard.
The plant includes two Rayco Pallet Pro nailing machines, a Rayco Edge, a half-dozen nailing tables as well as pop-up, chop and radial arm saws. Nails are supplied by Metropolitan Staple. The plant purchases mainly cut stock from Canada, as well as locally, including aspen, SPF and hardwood. It does a modest amount of cutting at the plant. It also has a Direct kiln, which it uses for heat treatment. This kiln is also used to thaw packages of lumber during the cold New York winters.
In terms of nailing, the company first purchased a Pallet Pro, and then the Edge. As business increased, it followed up with a second Pro. It runs the two Pros daily and uses the Edge to set up small specialty runs. “Rayco’s service is second to none,” Al said. “When we call them, there is always someone there to answer, and they’ll ship parts to us overnight.
Al Gentile’s two sons, Al Jr. and Nick, also are integral to the success of the company. Nick is the plant manager, while Al Jr. runs logistics. Gentile joked that his job is to yell at them, or more accurately, to provide oversight. He also looks after sales and customer relationships. The company runs with around 20 employees on a single shift.
Pallets or Pizzas? Dealing with the Chronic Undervaluation of Pallets
Gentile is highly concerned about pallets being chronically undervalued versus other products because of entrenched customer expectations. He compared pizzas and pallets. Why are customers so much happier to pay a premium for a quality pizza than they would for a quality pallet, he asked.
“There’s a guy making a pizza for 12 or 15 dollars,” Gentile elaborated. “He’s making it fast in the back, and for such a profit, compared to making a pallet, which is a much more complex process. Pallets start with timber in the forest. You have to buy it, log it, mill it and cut material to size. They have to grade it. By the time it gets to us, there are a lot of steps just to get pallet wood. Everyone is just trying to make a nickel or a dime.” In Gentile’s mind, pricing should be at least 10 or 15% higher.
“Pallet customers are always looking for nothing,” he continued. “If you try to increase the price 15 cents it’s like you are breaking their arm. They say they are going to look down the road, and there is always some guy out there who is hungry for the sales. But at the end of the day, it is about how much money you are actually making. It doesn’t matter how big your operation is, or how many customers you have, because if you are not making money, it is going to catch up with you one day.”
Gentile expressed, “I wish our industry could get together as a whole and say, do you know what, let’s charge enough to be profitable, to cover overhead and reinvest in the business. We don’t need to be going crazy, running around trying to find extra volume that you’re not really making any money on.”
Even if Versatile chose to pursue an aggressive growth strategy, however, it would be constrained by the lack of labor. Gentile pointed to insufficient labor as the other major challenge facing the pallet industry. “We are already seeing the impact of the new workforce—a reluctance for physical labor, and being on the cell phone all the time,” Gentile lamented. “The new workforce doesn’t have the push that we did, back in the day. No matter what business you are in, the outlook is the same. If you require physical labor, it is going to hurt.”
Gentile has decided against a piece rate payment system to motivate employees toward increased production. “People in the pallet industry say to put your employees on a piece rate,” he said. “Well, with a piece rate, you can guess what is going to happen. My quality is going to go (down). You take away from quality and service, and you’re destroying the reputation that made your company what it is.”
Cut Stock, Delivery and Machinery: Requirements for Success as a Small Company
As a small company, Versatile lives up to its name by providing quality custom products and offering nimble service. It stays away from ultra-low margin commodity markets such as the GMA. It prefers cut stock to avoid the investment and labor that would be required for its own cant line. For the same reason, the company relies on a local trucking provider for deliveries. In terms of nailing equipment, it also looks for best value in meeting its needs, which it has found in nailing machines from Rayco Industries.
“I’m not knocking any other nailing systems, but for what you pay, they are really a top-quality machine,” Gentile said. “And the service is the most important thing. It means a lot in our business.”
“We think Versatile Wood and Rayco have a great customer to vendor relationship,” echoed Devin McDaniel of Rayco. “We support them on parts as well as troubleshooting support. Nick has always been there for us to send potential machine customers to visit and see their machines in production. Rayco could not ask for any better customers than Versatile Wood Fabrication.”
Being Italian, Al Gentile’s father used to tell him that the name of the game was putting enough spaghetti dinners on the table for dinner, not necessarily being the biggest fish in the sea. “Some big guys, with the headaches they go through, is it worth it?” Gentile concluded, “And are they really making money?” For its part, Versatile continues to succeed by focusing on quality, custom products, and making astute business decisions that allow it to thrive as a smaller player in the industry.
For more information on Rayco equipment, call (804) 321-7111 or (800) 505-7111 or visit www.raycoindustries.com. Also, see Rayco’s ad on the inside back cover of this issue.
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Versatile Wood Fabrication