Trading Places

Thursday, July 31, 2003

SARASOTA, Fla. - Two small manufacturers of mobility products are swapping warehouse space and labor as they grow business on the East and West Coasts.

In June, Silver Star Mobility stacked its mobility lifts and carriers on 1,200 square feet of Lifestyle Mobility’s new 64,000-square-foot warehouse in St. Petersburg, Fla. Lifestyle has stocked similar space in Silver Star’s Medford, Ore. facility with scooters, power chairs and patient aids.

“Companies have to cut costs to be competitive,” said Darrin Horst, president of Lifestyle Mobility. “But it’s difficult to save on warehousing and labor because you’ve got to have them.”

Not anymore. Silver Star President Dennis Mortimor reckons the space-sharing and labor-saving deal will save his company about $60,000. He recently shut down his Atlanta distribution center and eliminated one full-time position.

Horst says shipping costs for his West Coast business will fall by 50% and that he’ll realize sales gains of 10-15% as each company begins to sell the other’s products.

The two companies admit that the economies of scale realized by swapping space and labor have long been apparent. The problem was in finding the right partner.

Enter The Medco Group, an alliance of small to mid-sized manufacturers, including Silver Star and Lifestyle, that came together last year to share marketing plans and ideas.

“Because all our companies are non-competing, they can share things,” said the group’s founder, Bob Zandee. “Otherwise, with so many companies being competitors, it’s hard to network.”

Silver Star and Lifestyle traded inventory via common carrier. By Medtrade, they say they’ll be shipping containers by train. Eventually, they plan to drop containers direct to each other’s locations from their OEM sources. HME