Perma-Vault Finds Its Niche Developing And Selling Cash Drop Safes

Dec. 1, 2007

About 30 years ago Perma-Vault developed the PRO-30 Under Counter Drop Box, a familiar item to many in our industry. The company has grown substantially since then and has managed to be profitable and continue to manufacture products that are relatively unique. My contact with Perma-Vault has typically been Norman Bartwink, Perma-Vault's sales manager. We see each other at trade shows as well as other functions and they happen to be located in my neck of the woods, just outside of Philadelphia . Norm let me know that Tina Williams would be the better person to conduct an interview with because she's been with the company much longer and had a much better perspective on where they were, where they are now and all that happened between now and then.

Norm mentioned a part of Perma-Vault's future is vested in the lodging industry. He also talked about how they've managed so far to successfully fend off the import market and felt good about still being in business.

“As we see competitors not being able to ship in eight weeks when they thought they'd be able to ship in two weeks because the container's not in, we feel good about what we do here. We're here to service at the point of the order. You give us four to six weeks for a custom order and we're there. We never know where that next phone call will come from, which is why it's so important to keep our name out there constantly,” Bartwink says.

“Our niche is interim security. We're here to protect people's cash, products and personal property from what I call ‘unauthorized borrowing'. We don't want to wander into the backyards of the other safe companies. If a customer wants to buy a larger safe after doing business with us, that's fine, but our mission here is to provide interim security, which is not a place the others seem to want to go.”

Following are Ledger's questions and Tina Williams' answers.

How long have you been with Perma-Vault and what did you do when you started?

I've been here 22 years and I was actually hired then as a part time bookkeeper. I spent about two years doing that. We only had four people working in the building then and I can remember billing out as little as five invoices per day. Our standard product at the time was the PRO-30 and within a few years we brought in the PRO-20 and the wall safe became an item that moved. Most of the items we made back then were customized for corporations with certain needs.

What corporations and what were their needs then?

Builder's Square was a big one. They were looking for something that didn't yet exist and we offered to make it. I think we've proven that putting the cash box near the cash registers was a good idea. It didn't take care of your back room problems, but it helped prevent stealing large sums from the register itself. So most of the items we offered originally were the result of what these stores were telling us they needed. Our Twice-as-Safe model (PRO-1200) has an inner and outer compartment. It was developed as a means to transport cash and receipts from the front end to the backroom without exposure.

What were the stores doing before?

We've seen grocery stores that would take money out of the cash register and stick it in a notebook and walk through the store that way or just a plain envelope. We designed carry carts for the Clover department stores. Many directors of loss prevention have great ideas on how they would like their cash protection to work; we tailor our products to fit their needs.

So you would come up with a solution to a customer's problem and in many cases the solution would become part of your regular offering. As someone who began as a part-time bookkeeper, you're very involved in the business; did you see this happening from the beginning?

No, I actually spent the first few years just bookkeeping and eventually we needed to hire people to keep up with the assembly work. I'd go back and see how things were made which was important since I was on the phone with the customers all day. I wanted to know what I was talking about instead of asking them to hold while I got the answers from someone else. I learned a lot about the product and moved into doing customer service, keeping track of all the key records, etc.

What else changed during this busy time?

We eventually got to the point where we were doing in-house fabrication and everything got done in one building. Before that we outsourced the welding and then we'd send it out to a paint shop. We always looked for the most cost-effective means to manufacture our products without jeopardizing the quality.

Until we got a decent computer system, production projections and tracking was a difficult task. Most of our market then consisted of distributors and a few corporate accounts and product demands were not easily determined at any given time.

How did you grow? Did the company do much marketing or was it more the result of referrals and companies contacting you?

When I first started, most of it was done by word of mouth. By the time I was dealing with customers all day and was familiar with their needs, we were set up with about a handful of distributors and didn't yet have any kind of advertising plan. I was not fully involved in marketing at that time but I do recall preparing for trade shows regularly. It was important to get word to the locksmiths since they were the ones who would be selling it for us.

Back in those days, our distributors would order stock consistently. These days, we find almost everyone relies on just in time inventory, which can play havoc on any kind of projection level. When we see our own lock suppliers running eight weeks delivery and our customer's expectations are same-day shipping, it takes some constant inventory evaluation to keep our customers satisfied.

I see a difference between how distributors were 22 years ago and now. I don't think distributors focus on drop boxes or safes for that matter so much as standard locksmithing supplies such as locks and door hardware. This is somewhat distressing as I feel they lose out on quite of bit of sales opportunities as a result of them limiting their promotion of our products.

Do you think there's less of a market for your product or has the focus of suppliers shifted?

Our product is so versatile and used in so many markets and the increase in sales over the last few years leads me to believe that there certainly is a demand. I do think, however, that when many manufacturers started selling direct, it resulted in distributors dropping safe lines. Most haven't dropped our line and we feel we work well with suppliers. The next major market for us is hotels and colleges and it's a tougher market to enter because of the competition coming from overseas.

I'm not sure that distributors today are able to sell our product the way we need it to be sold. Many of the imported items are cookie cutter safes where as Perma-Vault does everything customized to the customer's needs. We can't emphasize enough how important it is that we play an active role in introducing the product to prospective clients. Our greatest asset is service, knowledge and the clear understanding of just what our client's needs are. I can't tell you how many phone calls we receive with customers who currently have an imported safe that needs new locks or even keys and cannot find anyone to replace them.

Few distributors actually sell what they make. Typically a distributor is representing many, many manufacturers and isn't in a position to promote one product more than another. Most distributors would rather sell items that are made in the USA and contribute less to eight year olds being paid $1 a day to make these items. How can the distributors do a better job here?

While we do participate in many locksmith-associated trade shows annually, we've gotten away from a real connection where we talk to our distributors and get a firm idea of how we can assist them in promoting our product or even the direction they are going. There are a few distributors that I hear from quite regularly and feel very comfortable with our direction on a sales lead. I feel that the locksmith drives the sale; they are in direct contact with the decision maker many times and we would want them to know that no job is too small for us; we like custom work.

Right now our Through the Wall safe is a very hot item and can't be found anywhere else. It's like a night depository item; we originally developed the PRO- 2225 model for internal drop offs for schools, utility companies, etc. These are for situations where you don't need high security on the box all day. The actual chute is 2 ½” wide which is typically way too big for any type of real security. They needed a means to drop off large documents along with large cash bag deposits. They were going into a central office but didn't want them to have to enter the office. People started to realize they could use these for other applications but the opening and the unit was too big. We scaled it down and now offer the PRO-903 model, used for dropping small envelope cash deposits. We narrowed the opening to 3/8” but it's still interim security.

Where is the security lacking in these safes?

Any time there's an opening in a safe, you run the risk of fishing. Once again, I stress that our units are drop boxes. Even with an anti-fish baffle, with enough time and energy, they can be compromised. This is only a means to keep large bills out of the register and keeping the cash register exposure to a minimum.

Many people underestimate their revenue losses from mere cash discrepancies or the large bill exchange scams. Many of our corporate accounts have spent time reviewing their cash handling losses before and after the installation of our drop boxes. We have shown to have a proven track record and have gotten great feedback.

With higher risk situations, we suggest our semi-custom PRO-2225GN. It works similar to a standard night depository where the customer can be confident that his or her deposits are made securely. Again, there was a demand out there for this type of product that was affordable and we were there to fulfill the supply.

What changes have you noticed most in the time you've been associated with Perma-Vault?

I'm kind of overwhelmed by the demand for our product. When I began, I saw it as a simple drop box, no big deal. After years of learning and understanding the product and its uses, I can't believe how many different places and applications there are for it. I was on vacation at Montezuma's Castle and saw our Perma-Vault PRO-30 mounted for donations. Whenever I go into a store, I look to see if there is one and how it's being used. We have a lot of pride in what we do. Of course, we can't just walk into a store and ask to see their drop box. I am sure we would be kindly escorted from the premises, but I always try to take notice of whether they have a drop box on site. If I can see the box, then it's probably in the wrong place. It always amazes me now on how much more perceptive I am about security and cash handling issues when I shop.

How do you begin to solve the problem of plain sight safe installation?

I have personally visited a store where they have the box in plain view to anyone. Not that it can be picked easily, but it shouldn't be visible that way. We brought this to their attention and they built their counters around our suggestions.

How could owners of locksmith businesses work with Perma-Vault and help their customers benefit?

We do run ads each month in your magazine. Very often I call locksmiths to help us service a Perma-Vault somewhere and I find out that after more than 25 years there are still locksmiths who don't know what a Perma-Vault is. Again, this is interim security; there are people who can't afford the big handlers and back room safes that need something to keep their money in.

Are the large end users we mentioned buying these products directly from you?

Yes, we do have direct clients. The competition often makes it tough to work through a distributor and still be competitive. We also find that we need to do the sell on the item because it's hard to convey the right information to the supplier and then get it to the locksmiths. We have worked closely with many clients to design the right product for their requirements. We do have locksmiths who have brought jobs to us and we compensate them for that.

Has the import market contributed to you having to cut out the middleman?

Yes, economically we couldn't get our foot through certain doors because the focus was on price. We realized the distributor is not out there pushing our product the way we would so we've had to do it ourselves. We do contract out the installation of the product to locksmiths and they are well compensated since there's lots of time involved in the jobs with hotels or universities, for example.

Do you encourage locksmiths to contact you about applications they see in the field and want to sell your product?

I probably do 10 or 15 custom quotes a day for people who call in with certain needs. In many cases we just have to modify something we already make with minor adjustments. Since we do it all in-house, it doesn't take six weeks and doesn't cost 95 percent more for a simple add-on or upgrade.

What are some of the basic variables with regard to Perma-Vault's offering? Types of locks, etc?

Typically we use Medeco locks, but it isn't always economically feasible so we use other locks then. We have also worked around a customer's lock request like ASSA or Star lock. We designed the PRO-1206 model to go through the counter when that need was brought to us. When we needed a dual compartment safe, we designed the PRO-1200 and PRO-1150 models. Our PV-1217 rotary hopper safe is very popular and after doing a little research we realized that some don't have room for it so we developed the front-load version. It's the PVFL-1217 and will be available in the next couple of weeks. We also have the PV1414, a standard security chest that could work nicely in a residential situation.

What else has Perma-Vault come up with to keep up with the ever-changing world we live in?

The PV-1414 model is being used for the storage of high-end mobile phones and GPS units. Lots of mobile phone sales are done out of kiosks so there isn't much room to work with. There are times when people will ask us to make something that simply can't be done and I'll be honest with them about that.

So Perma-Vault is a successful company that expects to be around for a while?

Yes, as Norman said earlier, we've weathered the years of bad economics. We've always pulled through tough times and have customers who are true to us and we're always here for them when they need us.

I'd like locksmiths reading this to come away with another way to increase their bottom line and have something else to offer their customers. Do you see opportunities that the locksmith could take advantage of aside from the large end-users you work with directly?

It would depend on the locksmith's focus, whether it's commercial or residential. When I'm looking for someone to help with warranty work, I have to call several before I find one who will work on a safe. Our products don't need service often but it does come up occasionally. There are so many stores out there that aren't part of a chain who would benefit from having a Perma-Vault. Residentially, we have the In Wall Safe and the In Room Safes work well in homes also. Nursing homes are another great opportunity with medications and the theft that we hear about.

What are the list prices of the high and low end of your products?

The PRO-10 is about $125 and then the most expensive would be the PRO-2225 GN, the goose neck safe which is not even on our website yet. With the electronic lock, it will list for about $1900. There's something here for everybody.

When Norm Bartwink came back, we spoke a little about how the Perma-Vault line can be a part of the locksmith's arsenal of ways to sell more.

“Every time a locksmith makes a commercial call, he or she should take a PRO-20 or a PRO-30 and put it on the table and go about their business. The customer will ask about it and you explain that it goes under your cash register to keep your money in. They will ask how much and then ask if you can install it today,” says Bartwink. “We may not make the most under-counter drop boxes but I'll bet we sell more drop boxes to more people than anyone else.”

Why is that?

NB: It's our business.

TW: We don't get into the real big stuff unless we have to.

NB: Again, it's the niche we're staying in without banging our heads against a wall. Why should we make something that people don't want to buy from us in the first place? Everyone is bringing in their own version of the bigger stuff. It's not rocket science and that's why we travel the country coast to coast listening to what people have to say. Niche products and custom business, that's what we're about.

In 2000 Perma-Vault was purchased by a group of investors headed by the managing partner and president of the company, Robert Johnson. In addition to his vast experience in finance and an engineer, he is always available to speak with customers and prospects.

For more information on Perma-Vault, call 800-662-3360 or 215-293-9951, visit the web site or E-mail [email protected].