Celebrating 30 years in business, Candela uses new technology and a solid name to excel at lighting distribution.
By Chris Kelsch
As a relative newcomer to Candela Corp., CEO Mike Paulsin has gotten a lot done in a relatively short amount of time. He joined Candela in 2016 as COO, and since that time has overseen a dramatic upgrade in Candela’s technology.
As a result of those efforts, he was recently promoted to CEO. “This company has made a commitment to technology,” Paulsin says. “Since the beginning of 2016 we have upgraded everything including order entry, accounting and enterprise resource planning [ERP] systems.”
Such technology upgrades have enhanced a business that was already well regarded. Bill and Terri Baas, Candela’s founders and current owners, established the company in 1986.
Initially, it was a two-person operation. “Early on, we divided the responsibilities,” Baas recalls. “Terri took care of marketing and systems while I handled the financials and operations. I can still remember having customer information on rotary cards.” One thing Terri Baas excelled at was marketing. For example, one of the keys to Candela’s early success was their award winning newsletter that Terri authored. The newsletter was printed and mailed quarterly. Many of Candela’s existing customer relationships have their roots in that newsletter.
Those marketing efforts helped Candela build a customer of base of more than 30,000 branches representing several thousand companies from small to very large in size. And each one of these branches can usually find what they are looking for in Candela’s inventory of more than 20,000 stock keeping units (SKUs) in one of their 3 warehouses including lamps, ballasts and light emitting diodes (LEDs). To serve its customer base, Candela relies on a supplier base of roughly 200 vendor partners. And while the marketing letter is a respected piece of the company’s history, it has now morphed into regular weekly email campaigns that keep Candela’s customers informed of company developments and important product or vendor announcements.
Candela is not a typical wholesaler distributor. Instead, it has a different target market. “Essentially, we are a distributor for distributors,” says James Baas, Candela’s vice president of sales. “I still have people asking me if we are ever aggressively going after end-users, and I tell them ‘no.’ That doesn’t mean we won’t sell to end-users who find their way to us especially OEMs. In today’s online world, where the lines between wholesale and retail often blur, this just doesn’t work. However, unless a potential buyer can demonstrate they are a valid distributor complete with a current resale certificate, they will not receive wholesale price points and possibly not have access to certain SKUs. One thing about Candela is people know exactly who we are and what we do. Our business operations, starting with product sourcing through sales and support to logistics, is structured around taking care of distributors. Our distributor focus will continue to drive where we invest our time and money.”
In addition to a well-established name, James Baas also notes some other advantages of Candela, including some strategically placed distribution centers. Currently there are three: One located in Irvine, Calif., to serve the West; another in Norcross, Ga., to serve customers in the South and eastern United States; and one in Bethlehem, Pa., to serve the Mid-Atlantic and Midwest. Candela’s customers range across distributors such as Graybar, fill-in suppliers and some industrial supply companies such as Grainger.
It is not easy to stand out in the crowded distribution field. Candela has implemented a rigorous testing system, making itself an authority in the industry.
“We have made a strong emphasis on product testing,” James Baas says. “We have a dedicated product tester on our staff, with the idea of being a helpful source for customers when it comes to sorting through so many options.” Adding to that effort, Candela is also in the process of creating and implementing an R&D lab to thoroughly test new products coming to the market.
As the company recently celebrated its 30th anniversary, its leadership recognized that even with a solid customer base its systems had to be modernized. Paulsin came aboard to help oversee the upgrade beginning in early 2016.
Everything from order entry systems to back-office and phone systems were modernized and updated. Noted CRM system Salesforce was also installed, allowing Candela to better serve its customers by keeping real-time track of every customer touch. Paulsin says the company is just scratching the surface in leveraging the new technology to improve customer service but feels confident the investment has positioned Candela well for the next 30 years. “We handle thousands of small transactions every week. As a result, our eggs are not in one basket… but every egg is precious to us and the new technology really helps us take care of each one,” Paulsin says. “We’ll continue to ship any size order.”
Paulsin recalls that entire upgrades were made on Memorial Day weekend in 2016. “I remember notifying all customers a few times in advance of our massive upgrade,” Paulsin laughs and recalls. “And their response was ‘good luck with that.’” But thanks to months of careful planning and hard work by Candela’s I/T group and, with the help from many Candela employees pitching in and working all three days of that Memorial Day weekend, the company opened for business bright and early on Tuesday morning with only minor cuts and bruises.
As it turns out, Candela did have good luck with its upgrades, and customers continue to appreciate the transparent way the company does business. As for Paulsin, he adheres to a few basic rules to keep the company on the straight and narrow path to success: “First, always find new ways and new products to help the customer … they depend on us to help them take care of their customers in an industry experiencing some pretty sizable shifts in product development and supply chain channels,” he says. ” Second, always appreciate our people and over-communicate with them if that is even possible. Our management team makes in a priority to share information and results with our employees and give them the training, tools, freedom and authority they need to take care of customers.
“Third, when it comes to customers, we always do our best to earn their trust. Our people are their people … our inventory is their inventory. If a customer places an order for an in-stock item by 3 p.m., ship it out the same day. If the product is not in stock, get it in stock and out the door as fast as possible or arrange to have it dropped shipped from our vendor,” he adds. “We’ve used the same play book for 3 decades and it has worked for us and our customers. Our recent technology moves simply represent a continuing investment in our customers, our people and our playbook.”
Or, as Bill Baas likes to put it about customers: “We take pride in being lighting experts. We know our customers don’t know everything we do about lighting and consider it a privilege to be trusted by them.” And as Candela begins its 31st year, it will continue to know more than anyone when it comes to lighting products safeguarding the customer trust the company has worked so hard to build over 30 years.