Dealer Training Center, an online seller of training materials for HVAC repairs, maintenance and upgrades, was recently acquired by its chief executive officer and has moved from its original Pewaukee location.
James Bunce, Dealer Training Center’s CEO, bought out the share owned by John Markworth, who funded the company’s startup. Markworth is chief operating officer of Connection Strategies Enterprises Inc., in Pewaukee, where Dealer Training Center was formerly housed.
CSEI still owns a small portion of Dealer Training Center, Bunce said.
The business now operates from the homes of its four employees, Bunce said. The company is headquartered from Bunce’s North Prairie home. It contracts with an Internet hosting company for its servers, Bunce said.
“We could be based or located anywhere,” he said.
Dealer Training Center was founded in 2005 when Bunce, Markworth and Geoff Fox, Dealer Training Center’s chief operating officer, were looking for an industry to sell training materials online. Dealer Training Center’s web site allows distributors or HVAC dealers to purchase materials online, have their employees access them for 30, 60 or 90 days, and even take certification tests on its Web site.
The HVAC industry has no standards for certification, Bunce said, but some dealers have increased their testing and certification in recent years because of rising warranty costs. Those costs have been rising because technicians haven’t been certified in maintenance or repair, he said. Those circumstances made Dealer Training Center’s business model make sense.
“We wanted to hit an industry with no certification but had certification standards, strong distribution and a high touch amount with customers,” Bunce said. “And we wanted to have the business climate where we could work out of our homes and limit the amount of employees that we had.”
Dealer Training Center sells all of its products to HVAC dealers through distributors, Bunce said. The company has developed its own proprietary distribution system, which makes the company invisible to the end user.
“It’s a virtual training portal,” Bunce said. “We don’t sell directly to our customers’ customers.”
The company’s training products are now all text-based, created by teachers at vocational schools, Bunce said. Dealer Training Center is creating its own training videos, which it will begin offering in late December or early January.
The videos, showing different steps of the install, maintenance or repair of HVAC systems, will be 90 seconds to five minutes in length, Bunce said.
“The videos will allow (customers) a quick way to access training in an economic way with a short and generic video piece,” he said. “I can see video being, long-term, a large piece to the business.”
The new product might be slow to catch on, but will likely give Dealer Training Center good growth potential in the future, Bunce said.
“It takes a long time to get dealers to understand what you do but a long time for someone to displace you,” he said. “It usually takes 60 to 90 days to sell them on it, 60 to 90 days for them to implement it and 60 to 90 days for them to get it out to the dealers and technicians.”
Dealer Training Center had about $50,000 revenue in 2006, its first year of selling product, Bunce said. It will have about $600,000 in revenues this year, and Bunce believes that amount will triple by 2009.
The company has four employees now, but will be hiring a distribution management supervisor in March.
Dealer Training Center has 40 distributors signed on around the nation, representing 242 total locations.
Bunce is already eyeing other opportunities for Dealer Training Center, including other industries where its training material distribution model might work.
“The model is built to cross trade lines,” he said. “If you look, HVAC, plumbing and electrical have a lot in common. The distributors are already crossing boundaries. The base is there.”
