Learning from Leaders

Setting Sights on 75

Mid-State Distributing is preparing to mark a major milestone, with Jeff Hedden as the leader of this family-owned business.

WORDS BY JAMIE SORCHER

Due to an entrepreneurial lineage in his family, Jeff Hedden was a lock as the next leader of his family’s business: Des Moines-based Mid-State Distributing. Founded in 1948 as a distributor of consumer electronics and associated service parts, it was purchased in 1987 by the Hedden family and today provides its independent dealer network with constantly evolving consumer electronics and appliances.

“My grandfather and my great-grandfather had dry cleaning plants they started on their own,” Hedden said. “My grandfather on the other side of the family ran his own trucking dealership. Everyone has been entrepreneurial. It’s definitely part of who we are as a family. I couldn’t see myself working for a Wells Fargo in a cubicle. I’m not the kind of person who likes to sit still very long.”

After graduating from Iowa State with a double major in graphic design and marketing, Hedden could have pursued a number of career opportunities, but the timing was right to step into a role at Mid-State that began with negotiating the acquisition of RTI.

“I always helped out with acquisitions,” Hedden said, adding that when the opportunity arose to bring in RTI in 2005, he was the only one of his family members associated with Mid-State who had a background in mobile electronics. Because of his knowledge in car audio, and his past experiences helping with other company acquisitions, he helped complete the deal. “It was going to be a temporary, but I absolutely love the business so I stayed.”

Hedden started the mobile audio division with the RTI acquisition, but it wasn’t the first time 12-volt was part of the offerings at Mid-State. “We were in mobile long before 2005,” he explained. “At one point, we were doing mobile audio and we were also a warranty service station for GM and Chrysler-Ford, but when that business closed down, we exited mobile in the late 90s.”

Expansion Creates Room for Continued Growth

Three years ago, Mid-State made another key acquisition with the purchase of AM Distributors based in Chicago. A total renovation of the facility was recently completed, and Hedden said the office is officially open.

“The acquisition came about because the owner, George McGoldrick, was looking to retire,” he said. “We were looking to expand into that market anyway. so it worked well for both of us. We were in their facility renting 9,700 square feet

from them. We moved around the corner so we’re just a block away now in a facility that we purchased and it’s 21,000 square feet.”

The entire front office was renovated, which Hedden said was a three-monthlong undertaking. The building, he added, is a great place for the company to grow, as there’s additional space available if the offices need to be expanded.

Mid-State also has multiple stocking warehouse locations to support its dealer partners in the Des Moines, Iowa headquarters: Fargo, North Dakota; Omaha, Nebraska; and Menomonee Falls, Wisconsin.

The multiple locations have proven invaluable during the pandemic. “The biggest thing we relied on is having enough space in enough places,” Hedden said. “We have five offices to cover our territory. Plenty of people think we could do it with two or three, but we found that having the additional space and different places has been essential for keeping a decent amount of inventory on hand and then maybe stocking or ordering heavier when we can.”

There’s always a place to put product, he added, though anything 12-volt related that’s stocked is often going right back out again. Which, Hedden said, “is the same for many other industries.”

Clear Communication Even More Essential During Shipping Delays

The company’s territory—spanning as far west as Utah and as far east as Indiana—is a wide swath to manage. It’s a big footprint, Hedden said, adding that they cover the mountain states, MINK states, the Dakotas, Minnesota and Wisconsin as well.

“We try to do the best we can on shipping, which is the big struggle these days,” he said, adding that it’s most important to keep dealers updated. If they find out about shipping delays via UPS, for example, Hedden said they spend a lot of time communicating the details to dealers, which helps them with planning.

“If one of our dealers is working on a car and waiting on a product from Mid-State and they know it’s going to take three days instead of one, they at least have an idea of how to schedule so they the product when they need it,” he explained.

Effective communication is how Mid-State managed throughout the difficulties of the past two years. “We spent a ton of time during the beginning of COVID-19 to get things figured out,” he added. This involved a conference call every Sunday to figure out the rules in each state for each week, he said. “We had to persevere through it. Thankfully, we’ve had some great partners who have come through for us—getting us product when we need it.”

Like many companies that relied largely on in-person sales calls, Mid-State had to fall back on phone calls to connect with dealers. Now, the company’s salespeople are in the field once again. “Typically, they were on the road four days a week, but as we ramp up, they’re getting out two to three days a week,” he said. “Overnights in hotel rooms are up to each salesperson depending on their comfort level. As we come out of COVID, we’ll go back to four days on the road and one day in the office.”

Most of the team, especially those in the car audio division, have owned their own stores, run the bay or managed an individual location, according to Hedden.

“Every one of our salespeople has experience in the industry,” he said. “We’re not hiring a new sales guy and teaching him car audio: We’re taking a car audio specialist and making them more of a salesperson than they already were.”

Building Quality Relationships Ensures Longevity

Hedden said that product quality and exclusivity are two of the most important considerations when choosing to work with a vendor. “We want a line where we can somewhat control our destiny, at least in our territory,” he said. “And we want to be sure that it isn’t going to get destroyed online so that our retailers can actually make a profit on it.”

Having the right mix of vendors is the backbone for getting business done. The company has a long-standing relationship with DB Research, for example, which Hedden said has been one of the most consistent partners over the years. MidState will be doing some expansions with them. Their family of brands includes Euphoria, Quantum Audio, Hypnotic, DB Link and Lighting Solutions.

“Things like that really help us,” Hedden added. “I would rather be more important to fewer people than an addon, or a run-along, to a lot of people.”

Hedden recalled some very product meetings at the recent SEMA show. He hasn’t decided whether or not he’ll be at CES in Las Vegas in January.

Looking ahead, Mid-State is tentatively putting plans in place for its first post-COVID dealer show next spring, which Hedden hopes will bring people back into the company’s buildings again. “We like to invite all our manufacturers, and everyone has a booth,” he said. “It’s like a mini-tradeshow we set up in our warehouse.”

In past years, the show has received great feedback from retailers, who enjoy face-to-face interactions with vendors. Hedden said local businesses get to come and learn about new products without closing their stores and budgeting for time and travel. “It’s an add-on we’ve always done,” he said, adding, “The dealers seem to appreciate it.”

Planning a Year of Celebration in Honor of the 75th Anniversary

Hedden has always felt the industry feels like a family. “One of the things I’ve always loved about the car audio industry, and one of the reasons I’ve stayed in it so long, is that it’s kind of the same group of people,” he said, adding that while some of them move around to different manufacturers or distributors, he’s built relationships with people who’ve been in the industry for many years.

“I bumped into Robin McNeal at SEMA, who is national sales manager at Nakamichi Mobile Audio Systems now,” he said. “I knew him at Clarion back in the day because we were a Clarion distributor. It’s a close-knit group. It’s a big family.” And it’s a big reason why COVID hit Hedden particularly hard.

“I’m used to traveling two to three weeks of every month and all of sudden I’m home for two years straight,” he said, adding that it was a struggle for him, and also for a lot of the company’s salespeople. “We had our own built-in support network because we were on those conference calls every week saying how much we didn’t like it.”

Perseverance brought him through— and it’s also a key ingredient for being successful in business, he said. When the company first expanded and acquired RTI, Hedden noted that he and Tom Kolar, vice president of sales, were doing a presentation every year for Pioneer Car Audio.

“It’s proven to be a great partnership. We did the same thing with Sony,” he said. “We were very persistent. Persistence has been the biggest driving force for us. If there’s something I want to do, I exhaust every option before giving up.”

Mid-State Distributing will be ramping up during 2022 to celebrate its 75th year in business in 2023. Hedden said they plan to have a lot of fun with it.

Right now, they’re trying to pin down the exact date the company incorporated: “Then we can have a true birthday party,” he added.