Ion Lighting Distribution Succeeds Against Significant Odds
Sean Callahan and James Jaron didn’t expect the level of competition — make that outright opposition — they faced when they decided to enter the field of lighting distribution, which is dominated by a handful of huge, national players. But through patience, persistence, and adherence to a customer-first philosophy, they broke through, and gradually expanded their locally owned firm into a major regional player. And they’re not done lighting the way to further growth.
Opening a business — and keeping it going — isn’t an easy proposition. Still, Sean Callahan and James Jaron had no idea what obstacles lay before them when they decided to open Ion Lighting Distribution Inc. in 2016.
Jaron owned Zap Electric in Chicopee, and Callahan worked for Needham Electric Supply. “One day, we decided we needed to perfect one area of the distribution business, and that was the lighting,” Jaron said, noting that, in the large, corporate-owned stores, “the guy across the counter knows nothing about lighting, so he has to call somebody to call somebody to get some rep to talk to you” — and that adds layers of cost.
“So we established a distribution company from scratch, against all odds,” he said.
Those odds included a full-court press by those aforementioned large companies, he recalled. “They made a big effort to make sure we failed by cutting off our supply houses and manufacturers, telling them, ‘we’re multi-million-dollar companies; don’t sell to these guys, or we’re going to cut you off.”
Callahan remembers it well. “The day we started the company, I reached out to people I’d known for 15 or 18 years. All the manufacturers’ reps, literally 100%, across the board, all of them said ‘no.’ I was leaving a perfectly good job, I had customers ready to buy, and when I started reaching out to our manufacturers, it was ‘no,’ across the board — because our competition was trying to squeeze us out.”
He went so far as to e-mail the CEOs of those companies, saying, “‘I’ve been selling your products for 15 years.’ And they would look into it and say, ‘we’re not taking on new distribution at this time.’ It was very difficult to get started, but it’s nice to have people coming to us now saying, ‘hey, we screwed up. We didn’t think it was possible you guys would last. We want to do business.’”
Today, the Chicopee-based firm covers the state of Connecticut and Western and Central Mass., and extends into Rhode Island and New York City as well — and is looking to move into its fifth different facility in four years, all to accommodate Ion’s growth. How Callahan, the company’s president and CEO, and Jaron, principal and treasurer, managed that feat is a lesson in persistence.
Early on, Callahan said, “we flew to Hong Kong and China and met with manufacturers. Through that process, we found most major companies were buying overseas. So we got set up with container companies there and here and opened our business. As we got traction, more vendors started jumping on board because they saw we weren’t giving up. But it took a little while.”
Today, Ion purchases only in the U.S., he noted. “But it was tough getting started, and that was our only option at that point. It took a little more capital getting started than we would have liked, but eventually, we got our first vendor here — a small company we never would have thought about.”
Electricians are busy this summer installing 14,000 LED lights in the Du Bois Library building at UMass Amherst, one example of a large project for which Ion distributed products. But it deals with small businesses, too.
“Little by little,” Callahan said, we started picking up more and more work, and now we can sell top-of-the-line lighting on a big UMass project or commercial job, but we also have affordable lights for someone with a machine shop or small business who doesn’t want to pay top dollar when they can buy a fixture for $50.”
Green from Green
Ion is not an installer, Jaron emphasized; rather, it sells lighting to businesses, municipalities, and schools, as well as contractors, which is the ideal client.
Today, the company is a top-five distributor for Mass Save, a rebate program for using energy-efficient products; all the states Ion distributes in have similar initiatives. But the pitch isn’t just about cost savings.
“Think about the impact we have on the environment — it’s mind-boggling,” he told BusinessWest. “When we think about LEDs, we think about rebates and electric bills, but really, it’s an environmentally conscious thing to do.”
At the same time, the goal is to give customers the best solutions for the best price. “Our products are tested. If it doesn’t pass my scrutiny as an electrician, we don’t put it out,” he said, noting that Energy Star-rated products automatically imply that the fixture has a five-year warranty and has been through a rigorous quality-assessment process.
Jaron also noted that some of the large distributors won’t always explain the Mass Save rebate to customers and pocket the savings themselves.
“We put that savings in your pocket. We’re not doing anything hocus-pocus; we’re just being fair and giving customers what they need. We take care of our customers and talk to them like human beings,” he said. “Companies out there don’t want people to know. They’re gouging the end users. We said, ‘no. Make your margins, make money, but play fair, be a human being.’ You’ve got to do the right thing, and that’s what we’re doing, and that’s why our competition hates us. We’ve disrupted their little game. And our customers are very happy.”
A lot of people don’t understand the Mass Save incentives, Callahan said, so Ion makes a point of helping people maximize them. Jaron added that Ion has no commitment to any manufacturer’s rep, which makes it fairly unique in the upper tier of the industry — and allows for more cost savings.
“When the big supply houses have a commitment, they have to use their product. So when you come in buy a fixture, they’re obligated to use these certain brands for $120 or $130, where we have the same fixture, with the same manufacturer — apples to apples — and we can sell it to you for $80. Then add the Mass Save rebate, and it goes down to $40. Think about that for a second. No wonder they were terrified — because we’re not handcuffed to use certain brands.”
In many cases at corporate-owned distributors, Callahan said, the end user saw the inflated price and often decided not to buy because they didn’t have all the facts and options, and that was frustrating.
“But we found all these little offshoot manufacturers’ reps, all these other companies that we can work with, and can offer good, solid products that I would put up against any mainline manufacturers, and we were able to have stuff people could afford.”
Take auto garages, for instance, which use big, 400-watt fixtures that stay on for long hours. Many shop owners have seen the long-term savings of LED lighting — typically knocking off two-thirds to three-quarters of the old cost — and were willing to make the shift. But Mass Save also, in many cases, brought the initial cost of the new fixtures down to nearly nothing.
“And the maintenance is almost none; you can go 10 to 15 years without changing a bulb,” Jaron said. “With the price, the maintenance, and the environment, it’s just a win-win-win.”
Seeing the Light
When Callahan and Jaron went into electrical distribution, they decided early on it would be in everyone’s benefit — theirs and customers’ — to focus on lighting. “That was our niche, that’s what I had a passion for, and it’s what I gravitated toward throughout my career,” Callahan said. “We decided we could do lighting better than anyone else. So that’s all we do.”
It’s a model that has worked. Counting outside salespeople, Ion’s team numbers about 15, and sales have grown significantly every year. After opening in an office above Main Street in Northampton, the firm has relocated three times in the mill district of downtown Chicopee, and is looking to expand again, in order to consolidate all its operations, including its additional warehouses currently located in Palmer and Springfield.
Callahan isn’t worried demand for LED lighting will dry up anytime soon, with so many businesses and municipalities still in need of a changeover. “You can drive down any street anywhere, and you’ll find opportunities.”
Meanwhile, he noted, Ion is getting ready to launch an e-commerce website. “We’re excited to bring it to a national level and start selling to everyone in that way as well.”
He and Jaron are gratified by stories like a big job they supplied lights for in Worcester. They later received letters from the thankful customer, noting that electricity costs had dropped from almost $120,000 a month to around $68,000 — with the savings essentially paying for the project cost in year one.
“Three years ago, it was tough. We’re one of the only privately owned companies like this, because every other supply company is owned by a multi-million-dollar corporation somewhere,” Jaron said. “Now, these reps that didn’t want to talk to us, they’re coming through the doors, apologizing.”
Joseph Bednar can be reached at [email protected]