NASCO-OP—Your Purchasing Organization
Jun 9, 2014, 08:39 AM
July/August 1999
For 40 years, National Association Supply Cooperative Inc. has been helping scrap processors save money on equipment and supplies.
Dennis Durbano, president of Durbano Metals Inc. (Ogden, Utah), never thought he could be buying equipment and supplies for less. His vendors assured him he was paying the lowest price.
Then, about a year ago, another scrap processor suggested that he call National Association Supply Cooperative Inc. (NASCO-OP) to check its prices. Durbano had nothing to lose. As an ReMA member, he could use the co-op for free.
So he called.
What he discovered amazed him—NASCO-OP’s prices were 10 to 20 percent less, sometimes more. Torch tips, for example, that were costing him $7.50 a piece could be had for $4.50 through the co-op. “After that, we decided we’d call the co-op first for every need,” Durbano says, “and on every occasion it’s been able to meet our needs at a lower price than anywhere else.”
Since then, Durbano Metals has purchased much more than torch tips through NASCO-OP—from safety glasses to gloves to magnet controller parts to a new lifting magnet itself, on which Durbano saved $1,500 off the manufacturer’s price. “There’s nothing we use here that can’t be bought from the co-op,” he states.
Then, as icing on the cake, Durbano received a dividend check from NASCO-OP based on his purchases throughout the year. “So after all the savings we had all year, we actually got a check back—what a deal,” he says.
Durbano’s only regret is that he didn’t begin using NASCO-OP sooner. His advice to other ReMA members is to not make the same mistake. “Anyone who’s trying to save money for their company should at least have the co-op quote them a price on items,” he says.
As Bob Bedard, NASCO-Op’s general manager, states, “We want scrap processors to think of us as their personal purchasing department.”
Genesis of a Co-op
NASCO-OP occupies the second floor of a bank in New Philadelphia, Ohio, a small midwestern town about two hours south of Cleveland. Its location above a bank and among thrifty farmers is apt given its mission of providing quality products at prices that save customers money.
The co-op began in 1959 when a group of about 50 processors decided to pool their resources to buy equipment and supplies in bulk and share the savings. The co-op, initially headquartered in New York City, proved an instant success, growing to 600 members within a few years.
By the early 1970s, however, NASCO-OP found itself stalled with increased costs, decreasing membership and sales, and a rapid succession of managers. That all changed in 1975 when Jack Matchett was hired as general manager to revitalize the organization. One of his first priorities was to move the co-op from high-cost New York City to New Philadelphia. He also refocused the group on the nuts-and-bolts equipment and supplies needed by scrap processors.
In Matchett’s 21 years leading the co-op, membership grew to more than 1,000 companies and sales peaked at $8.4 million in 1995. That same year, the co-op dramatically changed its membership practices by waiving the membership fee for all current ReMA members, giving them all the benefits of its purchasing power for free.
Today, NASCO-OP and ReMA have a “symbiotic” relationship, says Bedard, an engineer with scrap yard experience. All 21 members of NASCO-OP’s board are active ReMA members, for instance, and the organization holds its quarterly board meetings at ReMA events.
Service Is Key
Now, as in the past, NASCO-OP is a service organization for the exclusive use of its recycling members. “We’re a not-for-profit company and refuse to pressure or inconvenience members in order to make a sale,” Bedard says, emphasizing that members can call for product pricing and information without obligation to buy.
To buy products through NASCO-OP, members need only dial its toll-free number—there are seven incoming lines—or use its toll-free fax line and place their order. On any given day, the co-op receives more than 75 calls from members all across the United States and Canada. Last year, members placed nearly 10,000 orders for discounted items ranging from torch tips to lifting magnets.
If an ordered item is in the vendor’s inventory, it can be on a truck heading for the customer usually the same day. As Durbano testifies, “I can place an order with the co-op and get the item delivered to my door almost as fast I could go buy it myself on the street.” When he ordered his lifting magnet from NASCO-OP, for example, it arrived within five days. “We couldn’t be happier with the service we get, he says. Recognizing the delivery needs of western members such as Durbano, NASCO-OP has increased the number of vendors in that region. “We don’t want western recyclers to be inconvenienced at all by delays in shipping from the East Coast,” Bedard says.
Callers to the co-op will talk to its knowledgeable five-person staff, each of whom has more than 10 years of experience helping customers with items ranging from safety glasses to magnet generators and more. “Our staff’s knowledge is a vital asset to the co-op and a valuable resource for our members,” says Bedard.
The co-op also makes extensive use of its fax and computer equipment to enable members to receive up-to-date information on products and services. Recently, NASCO-OP spent $30,000 upgrading its computer system, which stores data on every purchase made since 1990.
NASCO-OP members save primarily from discounts the organization negotiates through volume purchasing with its vendors. In return for these discounts, which can be as much as 30 to 40 percent compared with local distributor prices, and preferential service, the manufacturers gain a centralized doorway to the scrap industry. “When you represent the collective purchasing for a multibillion-dollar industry, manufacturers will bend over backward to get that business,” Bedard asserts.
At K&F Industries Inc. (Indianapolis), for instance, Greg Ostler, purchasing manager, regularly buys radial truck tires through the co-op for $186 each compared with $260 to $280 from local suppliers. Likewise, Nick Fath, plant manager for the material processing division of Galt Alloys Inc. (Canton, Ohio), is pleased with the 5-percent discount he received on a $130,000 36-inch alligator shear—NASCO-OP’s largest sale, Bedard notes. But price isn’t the co-op’s only concern.
NASCO-OP strives to sell the best quality products at the best price, Bedard explains. Though the organization typically carries multiple brands for nearly every item, the emphasis is on offering products that are “proven and accepted by the industry.”
For instance, NASCO-OP sells what Bedard considers a good quality leather glove for about $1 a pair. There are probably cheaper gloves available, he concedes, but the co-op prefers to work with a consistent and reliable distributor rather than a brand new supplier with a flashy price. While NASCO-OP already offers items from more than 300 vendors, it adds about a dozen new products or vendors a year, with most new products suggested by co-op members who’ve already tried them.
In addition to product discounts, NASCO-OP members receive an annual patronage dividend that averages 2 to 3 percent of their purchases for that year. Of each dollar spent, 93 cents go toward buying the product from the vendor, 3 cents go toward the annual dividend, and the remainder pays the co-op’s operating expenses. The dividend, which has been paid every year but one since its inception in 1977, has returned nearly $2.5 million to members.
Last year was the co-op’s second-best year, making some $7 million in sales and returning $177,000 in dividends, with checks ranging from $5 to $14,000.
Spreading the Word
As NASCO-OP enters its fifth decade, Bedard hopes to strengthen the organization’s ability to serve members by increasing its promotions and mailers, expanding its Web page, and refreshing its catalog.
Also key to the co-op’s future is its increased exposure to and use by ReMA members. “NASCO-OP is one of the premier benefits of ReMA membership and is a powerful tool in new member recruitment,” says Bedard. “In many cases, money saved by buying through the co-op can pay a member’s ReMA dues.” Durbano can attest to that. The $1,500 his firm saved by purchasing its lifting magnet through NASCO-OP more than paid its dues.
Though all ReMA members are eligible to buy through NASCO-OP for free, only about two-thirds use it, Bedard notes. The active buyers, however, include some of the scrap industry’s largest companies such as OmniSource Corp., he says, boasting, “To have the big companies buy from us is indicative of our good pricing and service.”
His goal is to spread the word to more small- and medium-sized processors because “it’s the guy at the small yard who runs the scale, repairs the equipment, prepares the scrap, and loads the truck who could benefit the most.”
Whether you’re big, small, or in the middle, the bottom line is you have to call NASCO-OP to benefit. As Durbano advises, “You have to train your employees to use the service.” And if his example is any indication, you’ll be glad you did. •
Fast Facts
- ISRI members can use NASCO-OP free of charge.
- NASCO-OP members not only save on their purchases, but they also receive an annual patronage dividend averaging 2 to 3 percent of their purchases for that year.
- Of each dollar spent, 93 cents go toward buying the product from the vendor, 3 cents go toward the annual dividend, and the remainder pays the co-op’s operating expenses.
- NASCO-OP receives more than 75 calls a day from members in the United States and Canada.
- Last year, NASCO-OP members placed nearly 10,000 orders for discounted items ranging from torch tips to lifting magnets and more.
Editor’s note: You can reach NASCO-OP in three ways—by phone at 800/321-3396; fax at 800/992-6679; and e-mail at nascoop@bright.net. For more information, you can visit its Web site at www.bright.net/~nascoop/.
For 40 years, National Association Supply Cooperative Inc. has been helping scrap processors save money on equipment and supplies.