Start Small to Win Big

A Lesson in Strategic Market Entry 

Early in my career, I was handed a juicy but daunting task: break our company into the OEM market.

We were a Montreal based truck spring manufacturer. While we had highly automated equipment, we kept the ability to make springs by hand, one at a time.  When I joined, we were comfortably selling parts to small, independent truck repair shops. But we saw the OEM space -where the big players lived - as the promised land. These were massive multinational companies dealing in million-dollar contracts and volume runs that dwarfed anything we’d ever touched.

As the brand-new Director of OEM Sales, I decided not to go head-to-head with the big guys and instead I looked for a side door.

I started by targeting the OEMs’ aftermarket divisions, and I asked one simple question: “What are the weird low demand parts that you are always running short of? The parts we made were not terribly expensive but when a $100,000 vehicle is out of service, the OEM’s reputation is on the line to supply the parts fast. Our unique strength was that we could produce ultra-short runs - just one, two, maybe three parts  - and ship them within days. That kind of flexibility was rare, and it gave us an edge.

Our competitors lived on high volume and couldn’t deliver on a timely basis. A bonus for us was that price was never a problem. It was about speed. Could we get it there by Thursday?

And we could. Over the next couple of years, we fulfilled rush orders reliably, made insane margins, and earned a reputation as a rapid-deployment hero. That opened the door to medium-sized production runs of 100, 200, or 500 units, still too small for the giants to fight us over, but incredibly profitable for us.

Within two years, we were supplying to most of the Class 8 truck manufacturers in North America, and three of the largest trailer builders. Our OEM business went from zero to rivaling our aftermarket division, but with lower customer acquisition costs, lower overhead, and higher profitability.

The lesson? You don’t have to take the hill head-on. Find the unserved or underserved niches within your target market - those short-run, high-pain problems your competitors ignore - and prove yourself there. Relationships and reputations are built in the trenches, and once you’re in, growth gets a whole lot easier.

Which markets are you trying to break into? 

See you next time,

Andrew