Northern Tool: "Guys who do stuff buy from me"
DULUTH, Minn. (AP) — If you've got a pickup or a trailer, if you fix your own boat or work the trades, then you're probably Don Kotula's kind of guy. And his customer.
"Guys who do stuff buy from me," says Kotula, a native Iron Ranger who had an idea 30 years ago that ballooned into Northern Tool & Equipment, a national chain of 74 stores seemingly steeped in testosterone.
Before cries of sexism ring out, consider this: 95 percent of Northern Tool's customers are men. Men who buy heavy duty generators, pressure washers, air compressors and meat mixers for that wild game they shot themselves.
"They're guys with projects — restoring cars, fixing lawn mowers, building their own log splitters," said Jamie Olson, an assistant manager of Northern Tool's Hermantown store. "They have an idea and need parts to make their project work."
Compare Northern Tool with home improvement stores such as Menards, Home Depot or Mills Fleet Farm, and Kotula scoffs. Those stores have plenty of female customers, buying window blinds, paint and wallpaper, which Kotula dismisses as so much frou-frou.
In contrast, Northern Tool & Equipment carries light industrial equipment, do-it-yourself supplies and, Kotula says, more parts and tools.
"We have the largest number of trailer parts in the world," he boasted to the Duluth News Tribune (http://bit.ly/wDXQj7). "We will fit every trailer. Guys like to know when they come to our place, they're going to find it,"
And, he adds: "We have bigger wrenches."
Northern Tool & Equipment, based in Burnsville, Minn., recently marked 30 years in business, all with founder Kotula at the helm. As owner and CEO, Kotula oversees more than $1 billion in annual sales, and employs 2,500 employees. He has his own brand of hardware and whisks off to China in his private jet.
And it all started back in the 1950s, in a junkyard in Hibbing.
At age 9, Kotula started working in his father's scrap yard, rubbing shoulders with tradesmen and do-it-yourselfers his stores cater to today. But he got more than a work ethic from his father (If you can walk, you can work, his father would say). He also got a make-it-yourself mentality and an entrepreneurial spirit that has driven him for more than 50 years.
He said he learned he had to scramble to make a living in a small town. Junk cars just didn't just sit in the family's salvage yard, he worked on them. After he bid on an old water tower and got it, he dismantled it to sell for scrap. But sometimes, Kotula's resourcefulness went too far. Like the time he removed his father's new whitewall tires and sold them, replacing them with tires off another car that he painted whitewalls on. A few days later, the white had worn off, and he got caught.
Being the kid from the town's salvage business created challenges that toughened him.
"Because you came from a junkyard, you had to strive to prove yourself," Kotula says. "Up to sixth grade, everything was good. After that, everybody wanted to kick my butt."
His father's advice was to pick out the biggest kid and fight. Kotula, who was average size and not much of a street fighter, did just that.
"I knocked out a couple of front teeth," he says with a tinge of pride. "Dad said you always had to stand your ground."
With a family business, children learn quickly how it operates.
At age 15, Kotula started his own business, refurbishing and selling used hydraulics parts to loggers. He was making $30,000 a year by age 16. By 20, he was commuting to his classes at University of Minnesota Duluth in his new Jaguar.
After earning his degree in business and finance, Kotula worked as an accountant for Northwest Airlines, then as a Caterpillar heavy equipment salesman. When he was laid off, his resourcefulness quickly kicked in. It was the 1970s, and more people were burning wood to save on energy costs. So he started selling log splitters out of his garage and the hydraulic equipment to make them run. With ads in Popular Mechanics and Popular Science, sales exploded. He expanded his product line when he realized buyers also would need chain saws, wood stoves and racks. That led to the opening of his first store in Burnsville, Minn., in 1981.
More stores followed, so did catalogue sales and eventually, online sales. He built a factory and started his own brand, NorthStar,which now makes up 20 percent of his product line. And many tools and equipment that NorthStar makes were his idea.
Kotula strategically picked the Southeast and the Midwest, from Minnesota to Texas, for his store locations.
"The Midwest is doing real good because the price of corn is up and farmers have money," he says. "Many stores are in the Southeast and Texas to offset winter. From January to March, people don't do much, but in the South, they do stuff year-round. And Texas always has money."
His stores' layout also is intentional.
"You need something to draw customers down the aisle so they want to look more," he says. "In the back, put the hot items that people come for, so they have to walk the aisle to get there. Then have impulse items. You want a guy to walk out with 2.5 items instead of one. That's my idea, but I think Target does that, too."
A self-made man, Kotula has kept his hard hat edge, despite his success.
Olson, who has met him several times, calls Kotula an average Joe who is a nice person and down to earth.
"If you didn't know he owned a business like this, you wouldn't have a clue," Olson said. "He's just a typical guy. He's what our typical customer is: the do-it-yourselfer, the guy who fixes stuff instead of going to buy something new."
And at 66, Kotula has no plans to retire.
"Staying home with the wife, watching Oprah is no life for me," he says.
The company keeps growing. It will add eight more stores this year, bringing the total to 82 stores. In recent years, it established a manufacturing plant in China and launched Kotula's catalogue and online sales of novelty gifts and gadgets for men.
Working for someone else never appealed to Kotula.
"If you own your own business, you create your own destiny," he says.
"I got my own jet. I fly where I want, I go where I want, and I'm never bored," he says. "If I do, I should walk the beach and come up with some more tools."
Information from: Duluth News Tribune, http://www.duluthsuperior.com
Copyright 2012 The Associated Press.