Larry Cohen and David Blackshear talk about what it took – and still takes today – to succeed in a competitive marketplace
In business, ever wonder what separates the survivors from the others, that is, the companies that fall away, get acquired or go broke? Books are written and lectures delivered on the topic, and consultants are paid generously for their insights.
Beneath it all, survivors seem to share these traits: The ability to think strategically, a healthy sense of self-preservation, a lot of true grit, quickness, paranoia and – probably most of all – hard work.
If you’re talking about dental distribution, you’re probably talking about Larry Cohen, chief customer advocate and former president of Benco Dental; and David Blackshear, former owner of Atlanta Dental.
Both grew up in the business when independent dental distributors thrived, fought and co-existed with each other. Both endured their share of national rollup plays, as well as some skullduggery and strong-arm tactics, and lived to tell the tale.
“We all must learn from our history, and it’s out there, as long as Larry and I are around,” jokes Blackshear, 90, who, with Cohen (78 years old), visited with First Impressions recently to talk about the past, present and future of dental distribution. “If you don’t know where you’ve been, it’s tough to know where you’re going.”
In the blood
Both Cohen and Blackshear grew up in the business. In that sense, they weren’t different from many other local distributors of decades past.
Atlanta Dental was founded shortly after the Civil War in 1868 by a young dentist named Samuel Hape. Decades later, when David Blackshear was contemplating his future, his father, P.L. Blackshear, and Milton Goolsby were co-owners of the business.
“It was 1949,” recalls Blackshear. “Atlanta Dental at the time – like many companies – was reeling from lack of talent; the war had taken a lot of good people.” Blackshear himself wasn’t sure his future lay in dental distribution. “I had been accepted into the University of Miami’s school of music, and I was excited by the thought of a career in music.” Love intervened, however, and he realized that a career in music could possibly lead to starvation. “I got some good advice to stick with the business,” he says. “Over my career, I used music as a hobby.”
Of Atlanta Dental’s 26 employees at the time, seven were in sales, 19 in support. The company operated out of the seventh floor of a Downtown Atlanta office building. “The freight elevator didn’t work too well,” recalls Blackshear. The good news was that the building was loaded with dentists. “Good profits, no transportation costs,” he says.
At the time, Atlanta Dental was part of the Southern Dealers of the American Dental Trade Association (ADTA, now the Dental Trade Alliance). “This was before mail order, before charge cards, before gasoline was more than 20 cents a gallon,” says Blackshear. “Communication was strictly via U.S. mail and the telephone.” There was plenty of competition, though.
It wouldn’t be much of an overstatement to say that in each of the Southern states, distribution was controlled by a different family. LM Anderson was in Tampa, Fla. In Alabama, there was the Crutcher family; the Hills came later. There was Davidson in New Orleans, Keener in Tennessee, Thompson in the Carolinas. In Atlanta, the competition included Nixon-Holcombe Dental and SS White, (at the time, a distributor as well as manufacturer), which had a branch in Georgia.
“Atlanta Dental is still around, after 146 years; employee-owned,” he says. “Nashville Dental is still going great as a family-owned business. And I understand Benco is doing pretty good,” he jokes. But the others have long since gone away.
Born to sell
Benco was founded in 1922 by a 19-year-old Russian immigrant, Benjamin Cohen (Larry’s father). “He was the oldest of eight brothers and sisters,” says Cohen. He quit school in the sixth grade and went to work. “He felt it was his responsibility to bring home money to help support the family,” says Cohen. “He worked in a shoe store, delivered packages – all menial work.” In his early 20s, the elder Cohen borrowed $300, bought some dental instruments from Premier, and started selling them door to door. Then he traveled by train all over the Northeast, even into Ohio, selling instruments. “He was an itinerant peddler until 1930,” when he decided to settle down in Wilkes-Barre, Pa.
Larry worked in the business from youth, and started attending dental meetings with his father in his mid-teens. “I understood the business long before I was actually in there full time,” which occurred after he was discharged from the Army and completed graduate school.
As was the case in the South, independent dental distributors – family-run businesses – dotted the New England and mid-Atlantic states, recalls Cohen, rattling off names such as JJ Crimmings, Hood Dental, Washburn Dental, Smith Holden, Easton Dental, Kays-Durgin, Dauphin Dental, Philadelphia Dental, Heinsheimer, Gates Dental, and many others. “There was a dental supply company in every town, at least in my part of the world,” he says. But such was the economic ecosystem at the time. “Just to go back, when I was a kid, there were no chain supermarkets, no shopping centers; there was a grocery store on every corner. And most of the time, you called them up and they delivered. The butcher delivered, the milkman delivered.”
Dentists would walk into Benco’s office – located on the 5th floor of a Wilkes-Barre office building – and buy two or three copper bands. “It’s unbelievable to think of that now,” he says.
Another sign of the times: Artificial teeth was a key component of the independent’s business. “If you did $100,000 a year, you could bet 20 percent were teeth,” says Cohen. Blackshear confirmed the same was true in the South. What’s more, many of the trade houses had their own labs. For some of them, lab was much more profitable than selling dental supplies and equipment.
The plethora of distributors resulted in some hard-knuckled competition.
Cohen describes the two-tiered distribution system that existed in decades past. On one hand, there were the dealers in the trade association, who usually got the best lines, such as Ritter, Kerr, SS White. “These were all the premium lines, which the dentists knew from dental school,” he says. Then there was a “ragtag bunch of independents, second-tier dealers, I would call them,” of which Benco was one, he says. They generally represented second-tier merchandise and equipment manufacturers.
“Dentsply had giant market share [in artificial teeth], but we were not a Dentsply dealer,” explains Cohen. “We were a Universal dealer, which was the No. 2 line at the time. My father had a good run with Universal, and years later, in 1972, we got Dentsply. At the time, they told us their smallest market share in the United States was the Wilkes-Barre/Scranton area, because we had been so successful selling teeth.”
It was because of the tough competitive environment that Benco got started in equipment sales, recalls Cohen.
“The most important dentist in Wilkes-Barre – Danny Gordon – bought all his supplies from my father, but he bought all his equipment from Leventhal [a competitive distributor], and got all the service work done by Leventhal,” he recalls. One day, Leventhal decided to press its advantage. “They had this bright idea, so the salesman said to Danny, ‘If you don’t buy your supplies from us, we will stop servicing your equipment,’” says Cohen. “Danny Gordon – who was about 5 feet tall – threw the salesman out and called my father and told him, ‘I just threw out the Leventhal rep; you’d better hire yourself a serviceman.’ I was in high school at the time.”
Shortly after the mid-century mark, the landscape started to change, due, in large part, to one man – Meyer Cyker.
Born into a Jewish family in Poland in 1928, Meyer and his family faced tough times during World War II. In October 1942, the family managed to escape into the forest in modern-day Ukraine. They escaped detection by the Nazis, and, in 1947, immigrated to Boston. Young Meyer tried to pursue an education in engineering, which he had begun in Europe, but was unable to because of the language barrier. So he went to work for two brothers, Ben and Harry Rower, at a Boston dental supply company called Rower Dental Supply. Ultimately, he gained control of the company.
Unable to get the top-tier lines, Cyker aggressively sold secondary lines. Soon he began acquiring competitive distributors, with the goal of becoming a national distributor. He also acquired dental labs and even some nursing homes, and started a medical supply company as well. At its peak, Cyker’s company – Healthco – employed about 600 sales reps in about 100 locations.
“What he did was change the face of the industry,” says Cohen. “He was able to gain the best lines – all the ones that the independents did not have. And when he would buy an independent, he’d throw in those lines and the business would grow exponentially, because they had the good stuff to sell. And everybody was selling their business to Meyer.
“The code word among us independents was, ‘Are you joining up?’” recalls Cohen. By “joining up,” the distributors meant selling their business to Cyker. The owner of one competing distributor asked Cohen, “Are you joining up? You had better, or else they will crush you like a bug.” The comment gave Cohen pause.
There were a few who were able to laugh off Cyker’s bid. “I remember being in an elevator at a Greater New York meeting with a distributor from New York City,” recalls Cohen, speaking of Walter Tiegen of Certified Dental. “I said to him, ‘Are you joining up?’ He said no. I asked him, how come? He said, ‘Because I know what I pay myself, and I’m not worth it.”
But Healthco had a few chinks in the armor. One was the difficulty Cyker had in managing what turned out to be more than 100 separate inventories – not an easy task at the time, given the fact that the telephone and the U.S. mail were the most reliable forms of communication and information-gathering. But Healthco had another flaw as well, Cohen says.
“I really think we were better businessmen than they were,” says Cohen. “Healthco was terrible on delivery. Dentists who used them always had a backorder list. Later, when we got bigger, our approach was to go to the Healthco account and ask them to give us their backorder list. And we could fill it, because we had the inventory. I always believed in having enough inventory on hand.
“Today, you’d better not have too many backorders – that’s the ticket to admission. But then, Healthco did not.”
Healthco’s presence was felt in the South as well, says Blackshear, who drew a parallel between Cyker’s acquisitions of company after company with Union General William T. Sherman’s “march to the sea” in Georgia in the waning months of the U.S. Civil War. Even so, Blackshear found a way to co-exist with Cyker.
‘A modest amount of success’
“I was at the New Orleans dental meeting, the first one Meyer came to when he joined the ADTA,” recalls Blackshear. “Nobody would talk to him. So I went over and introduced myself and said, ‘I understand you just bought my competitor, Nixon-Holcombe; I would like to wish you a modest amount of success.’” Cyker smiled and said, “David, I’ll never forget this; no one has ever said anything like that to me before,” he says. “We became friends.”
Meyer Cyker wasn’t the only one focused on consolidation. A couple of distributors – Buddy Myers of Climax Dental in Philadelphia, and Billy Anderson of LM Anderson in Florida – organized a firm called CODESCO, which stands for Consolidated Dental Supply Company. They approached Blackshear about selling his company, but he declined. “I can’t remember how long CODESCO was in existence, but I think an investment group finally bought it, and it soon liquidated,” he says. It was similar to the fate that Cyker’s company met a few years after it was acquired by an investment firm in 1990. (Cyker died in October 2012.)
Consolidation meant the death of many independent distributors, but it only strengthened the resolve of others.
“I just enjoyed being independent,” says Blackshear. “We probably lost a few people who wanted to leave, but at the same time, we were acquiring a lot of folks who still wanted to be part of a family business.”
Even so, aware of the critical mass and negotiating power that Cyker was amassing, Blackshear and the principals of several other independents from Tennessee, Kansas, Iowa, Arizona and Georgia formed an unofficial co-op. “We agreed that if we needed to pool our buying power between the five of us, we could create enough for manufacturers to be competitive,” he says.
“During those years when family-owned distributors were selling out to national chains, we felt we could better serve our customers, our employees, our manufacturers and our communities by continuing to do those things that we were taught to do by our founders in 1868,” says Blackshear. “We had already earned the reputation for reliability and trust, and we were growing into a regional company. And we enjoyed our work. Now, after almost 150 years of refining that concept, we continue to grow by making room for those that share our values, be they employees, customers or manufacturers.”
Independents can enjoy success today, though they will experience challenges that differ from those of their predecessors, says Cohen.
“It costs a lot of money to get going today,” he says. Customers expect accurate, prompt and complete deliveries, and to do that, distributors must stock lots of inventory. And that’s expensive, he says. What’s more, supplies are getting to be commodities. “Now that Amazon is getting into the supply business, things are getting even more hairy.” Entrepreneurs might find more opportunity in equipment sales, he adds.
Today’s sales reps must borrow from lessons learned in the past, but they must add new skills as well, Cohen continues. As salespeople have in the past, today’s reps must be likeable, honest and dependable. “In a relationship, your customer needs to like you, because if they don’t, you don’t have a prayer,” he says. But more than ever, reps must add value to the relationship. And that requires a new set of skills.
“When I was a salesman, one of the main ways I added value was showing new products, explaining what was out there, things they didn’t know about,” says Cohen. Today’s dental professionals already know what’s out there even before the sales rep shows up. “They go to the lectures, they know about new products and new ways to do things.” That being said, today’s reps must show value in new ways.
Blackshear tells of a salesman – Arthur Holtz – who came to Atlanta years ago. “He did a great job of selling; he established a business.” Ultimately, he came to work for Atlanta Dental Supply.
“He became our No.1 producer,” recalls Blackshear. “He left this impression with every doctor: ‘We don’t ever want to leave you with an unsolved problem. If you find anything wrong with our company, you let me know.’
“We are in the relationship business, relationships that have, for generations, helped Atlanta Dental Supply remain independent and grow,” he adds.
Holtz won a trip to Europe, and sent Blackshear a photograph of a sign in England that read, “Salesman Wanted. Must Look Honest.”
Honesty is one of the values that has helped Atlanta Dental remain independent, he says. The employee-owned company has 34 stockholders today. “We really enjoy what we do, and it spills over to our relationships with our customers. They’re all looking for a kind of comfort in this world of discomfort.
“If I left a legacy, it would be that I kept the ownership and management of Atlanta Dental in the hands of those that keep it successful.”
The full service supplier
Competition makes us stronger, says David Blackshear, former owner of Atlanta Dental. He tells this story to demonstrate his point.
In years past, every February, the Dealers Section of the American Dental Trade Association (now the Dental Trade Alliance) would meet for a couple of days at the old Edgewater Beach Hotel in Chicago, explains Blackshear. The agenda included speakers from academia, manufacturing and politics; motivational and celebrity speakers; and member panels. “It was all aimed at how we could improve our businesses,” he says.
It was during one such meeting in the late 1950s that the members discussed a new and unexpected competitor. “It was a simple page of a few products offered at discounts and mailed to the profession,” he says. “It was the beginning of the mail order business in our industry.
“For a while we just watched and resented any customer who would buy from mail order ‘after all we had done for them,’” he says. “There was the answer. We had never taken the time to show the customer the many, value-added benefits we deliver.”
The association’s operations committee was tasked with doing just that. They listed the services that dental dealers offered, including:
“A logo was designed, and we named it “Full Service Supplier.”
“Distributors who embraced and delivered ‘Full Service’ survived.
“The moral of the story? Competition makes us stronger.”