fbpx

How to Make Money Selling Chemicals

How to Make Money Selling Chemicals

By Diane M. Calabrese / Published March 2021

Photo by iStockphoto.com/Mary981

Money? Selling chemicals? Yes, especially when the seller offers chemicals and expertise.

     “Your primary goal can’t be, how do I sell more chemical?” says Billy Fields, owner and general manager at Cougar Chemical Co. in Memphis, TN. “Your primary goal is, how can I serve my customer?”


  

     Give the customer a boost, explains Fields. “Ask, are we as a company and am I as a consultant an asset to my customer?”

     Understand the customer’s issue. Then, respond with a solution. “Be a cleaning specialist, not a salesman,” says Fields. “We have heard these words before, so this is nothing new.” 

     Fields likens the studied acquisition of precision in problem solving to that in other disciplines. “The higher the skill set, the higher the demand and the pay. To be a true cleaning specialist, you must know the substrate, the soil type, the available dwell time, and the available application and safety requirements.”

     Take a page from medical professionals. “Just like a doctor prescribes medicine and therapy based on specific ailments, make sure your prescription is applicable,” says Fields.

     Start with the target. “The substrate is what is being cleaned,” says Fields. “Heavy equipment, trucks, conveyors, concrete—soft or hard, vertical or horizontal, smooth or textured, porous or non-porous, painted or non-painted—including metal types such as stainless, copper, aluminum, etc.”

     When selling chemicals, keep learning so that value in the form of knowledge can be provided to the customer. Soil types, for instance, vary widely. 

     “On heavy equipment the job usually involves cleaning heavy dirt out of tracks and wheels, as well as oils and grease from hydraulics that coat painted surfaces and interiors,” says Fields. “Trucks are usually covered with road film, diesel, and soot from chrome stacks to the aluminum tanks and polished wheels.”

     That road-acquired soil differs from residues in food processing and beyond. “Conveyors may be coated with food-related fats from poultry-processing plants, or tar and asphalt from paving companies, or grease and oils from manufacturing components before the paint process,” explains Fields.

     And yet, cleaning the soiled concrete under trash receptacles will be quite different from the challenging conveyor. “Concrete may be covered with dirt and oil in a parking garage or foods and gum in a stadium,” says Fields.

     Each substrate and soil combination leads to a unique dwell time. “The available dwell time can vary greatly from one second on an auto scrubber to one hour on a concrete truck and anywhere in between,” says Fields. “Think car wash tunnel or a parts washer conveyor.” 

     Getting a suitable chemical match requires two more big considerations, explains Fields. “The application requirements vary greatly in themselves.” Several other major factors must be considered, such as environs, cost, and waste stream.

     “A food processing plant cannot have fumes from an oil-fired pressure washer, so you may or may not have hot water, depending on available space and utilities,” says Fields. “The chemical would vary depending on water type, heat, surface type, and so on.”

     Take care when estimating cost. “You also need to look at end use cost per unit, not cost per concentrated gallon,” says Fields. 

     Being able to accurately project cost is very much a service. “The customer wants to know what it will cost me to wash ‘X’—that may be cost per truck; cost per minute; cost per unit; or cost per day, month, or year,” explains Fields.

     Cost is not just chemicals plus labor. “You must factor in where the waste stream goes and how it will need to be dealt with as well as local and federal ordinances,” says Fields. 

     Above all, keep safe practices at the fore. “Know your products and all the safety requirements,” says Fields. “Help your customers with safety and compliance consultation. Make sure they know it is their responsibility to be compliant.”

     When talking with customers about compliance issues, stay within the strict space of a seller. “Only advise, do not accept responsibility,” says Fields.

     “To put money in the bank selling chemicals, you must be the specialist,” explains Fields. “Specialists don’t haggle over price because they don’t have to.”

     And keep learning. “Just like a doctor knows what is in his arsenal to prescribe and has extensive knowledge and experience in diagnosing the needs and how each prescription reacts as well as the side effects, you must educate yourself and be ready to meet and help those who seek expert advice,” says Fields.

Companion Selling

     There is upselling, and there is companion selling, which is sometimes overlooked as a revenue stream for a business. 

     Selling pressure washers and ancillaries coupled with offering excellent service can be the basis of a solid distributorship. But selling chemicals can make a business even stronger.

    Mike Turner, president of Etowah Chemicals Sales & Service in Gadsden, AL, suggests looking at the pressure washer as the starting point. “A pressure washer is a chemical dispenser,” says Turner. “You sell a customer on average one pressure washer every five to ten years.”

     By selling chemicals, a distributor can serve the customer in intervening years and expand business. “Chemical sales can be monthly, which can generate large profits after the unit sale,” says Turner.

     “The key to selling chemicals is learning your products and what cleaning applications they perform best at,” says Turner. Building a repository of the kind of ready information that will buoy customers does not have to be a go-it-alone enterprise.

     “If you purchase your cleaners from a manufacturer, the manufacturer should have experts who can give good advice on the product you purchase from them for a particular application.”

     At the same time, don’t hesitate to tap the expertise some customers bring with them. And learn from it.

     “Another way to learn is from your customers,” says Turner. “By quizzing them about what application they used the cleaner for, you can use that to help sell products to other customers.”

     By being attentive to details, a distributor can benefit greatly by offering chemicals for purchase, explains Turner. “Selling chemicals will become the most profitable part of your business if you stay committed to learning your products and all the applications they are used for.” 

Adding With Care

     In a context of local and state regulations that vary from one another, as well as regulations in other states (e.g., California Proposition 65 that applies to any product being sold in California), due diligence is a must prior to making an addition to the product roster. Taking the time to understand the niche eliminates potential problems—and there are many.

     AC Lockyer, the owner of SoftWash Systems in Sanford, FL, tells us there are several points to consider before leaping into chemicals sales. He begins with layered dimensions of regulation.

     “Each state regulates consumer products,” says Lockyer. “Before a person or company begins selling a product—especially a chemical or soap—they should look into the state requirements for the backing of claims.” 

     A label might look catchy with a prominent display of “best ever” or the like. But that will not do. Any claims on advertising or labeling need to be backed and defendable, explains Lockyer. And that is all and any claims.

     “You cannot simply make the claim that something is a surfactant or a detergent,” says Lockyer. “Or even make a claim of longevity. Or even a claim of savings. All claims need to be defendable.”

     Follow the law. Do not be tempted by seeing wiggle room, such as being too small a company to be of interest to those assessing fines. 

     “Most companies never have to deal with regulators on unsupported claims simply because they are not big enough to fine,” explains Lockyer. State regulators waste time when they spend it on companies that cannot afford fines levied against them because there is no (fine) revenue generated.

     Even so, Lockyer emphasizes compliance as the only choice. “Just because the regulators have not showed up at your door doesn’t mean that you are in fact not breaking any laws.”

     Federal regulators—from the DOT to the EPA—have a keen interest in chemicals. Know the rules. Lockyer gives some examples.

     “You must follow OSHA 1910 standards for using a product in accordance with labeled instructions,” says Lockyer. For instance, it’s not legal to use laundry soap to clean a building. 

     “The label on that laundry soap speaks to cleaning clothes,” explains Lockyer. “The mixing and use instructions speak to cleaning clothes. The safety and first-aid instructions speak to situations encountered in cleaning clothes.”

     In theory, a chemical product can serve more than one purpose. Yet it can do so only when labeled for multiple uses. And the labeling must be registered with the EPA.

     “Not all labels have to be registered with the EPA,” says Lockyer, “but anything that is hazardous, any formula that exceeds a pH of 10, or any formula that contains a controlled ingredient must be registered and all labels and SDS [safety data sheet] documents reviewed and approved by the EPA.”

     The relevant (and approved) SDS must be tied to each product. SDSs are also required on each product.

     “SDSs need to conform with the product label as well,” says Lockyer, reminding sellers that it is against federal law not to provide them and make them readily available. Again, know and follow the law.

     Cradle-to-grave responsibility for manufactured products is perhaps most pronounced in the sphere of chemicals. (Think of the abundance of class action lawsuits filed against pharmaceutical makers.)

     “Product liability is also huge” for manufacturers of chemical cleaners, says Lockyer. “You can opt to not have product liability insurance, but you will leave yourself open to possible losses due to liability from injuries or death.”

     Prioritize. Never be so carried away by enthusiasm for a product that foundational work is short-circuited. 

     “When you launch a new product or soap, these [SDSs and all the aforementioned] need to be in place first,” says Lockyer. And assuming that all regulations are met and protections put in place, what’s next?

     Distribution. And there is more than one path. 

     “You can go direct-to-consumer and bypass distribution through stores,” says Lockyer, noting it will increase your profit margin. “However, the quickest way to get your product into the hands of new customers is through established distributors.”

     Strong distributors will want to know that all the boxes are checked on compliance. “Distributors have a moral responsibility and even culpable liability to make sure the products they sell are on the up-and-up,” explains Lockyer. “This means vetting new products to make sure the claims are defendable, the labels and SDS are compliant, and the products are EPA registered (especially anything that ships as hazardous).”

     What about pricing, especially for the first-time inventor? “Price your products with the future in mind,” says Lockyer. 

     “One day you will need an office, insurance, staff, chemists, third-party verification, lawyers, etc.,” explains Lockyer. “Just because you can sell something cheap now doesn’t mean you need to.” 

     Lockyer likens selling too low on initial offering to contractors who sell services low because they skip insurance and work with no overhead out of their house. Everyone else must compete against the low price. “Don’t be that guy in services or when you enter the products arena either.”

     Should a contractor mix services and product sales? Probably not for the long term because focus matters.

     “I feel that contractors bringing soaps to market is a side-hustle.,” says Lockyer, who sees retail sales of more than $200,000 as an indicator of momentum. When that momentum occurs, it is decision time.

    Will it be contractor or supplier? “Contractors need to know when to cut the ties between their cleaning business and their cleaning supply business,” explains Lockyer.

     It takes time to confirm the new business can be fledged. “But it is fundamentally a conflict of interest, in my beliefs, to operate both a contracting business and a cleaning products line at the same time,” says Lockyer. “Certainly, under the same corporation or LLC. The damage to your name and reputation or the exposure to product liability is not worth the risk.”