(Note: This story appears in the August 2021 issue of Storerotica Magazine)
*Story by Larry Kaplan
Brothers Steve and Andy Craig have put Nalpac in prime position as it celebrates its 50th year with sights on the next half-century.
When brothers and venture capitalist partners Steve and Andy Craig bought Nalpac Distributing in 2017, the then 46-year-old adult distributorship faced severe challenges.
The Craigs had their work cut out for them, but they were definitely up to the task. The adult products industry was rooted in handshake relationships; your word was your bond. Under the Craigs’ leadership, Nalpac has carried on that philosophy and rebounded as Steve and Andy have proven to customers and vendors that they say what they mean, and are true to what they say they will do.
SE: You bought Nalpac four years ago. What have been your biggest successes and failures since then?
STEVE: Our greatest success is survival, thanks to the continued support of our customers and manufacturers. When we took over in 2017, we moved a 150,000 square foot warehouse in just 60 days. Our suppliers’ willingness to continue working with us provided the opportunity to maintain the business.
SE: What do you see as your most significant improvements?
STEVE: Definitely the technology. We’ve upgraded the software, hardware and developed custom applications to make us highly efficient, facilitating much greater data control to enable us to provide that information to our customers. We’re excited about our new website, which was just rolled out.
SE: If survival was the biggest challenge, what are your greatest successes and failures?
STEVE: Our biggest success has been the opportunity to take an existing business, blend new up-and-coming brands with manufacturers we’ve long represented while continuing to work with numerous longtime customers and add many new vendors and customers.
SE: Of the ideas you’ve tried, what worked and what didn’t work?
STEVE: Coming into this business from the outside, you tend to assume that it’s like any other. To a degree, product is product. But we’ve learned over time how unique the individuals are within the business; the manufacturers and customers. We’ve tried to do different things, which we thought would be novel, exciting, and well-received. We realized very quickly that it’s essential to understand the market and to respect it.
SE: What’s been your biggest surprise with Nalpac?
STEVE: Coming from an outside perspective, it’s everyone’s professionalism. We’ve found the majority of people to be respectful, professional, and wonderful to work with.
SE: The industry started with wholesalers selling dildos out of car trunks and evolved in product mix, distribution, technology, and more. What are the next steps for taking Nalpac into the future?
STEVE: Our mantra and key to success is always to adapt. COVID-19 has changed the world. We’ve invested in technology that’s allowed us to manage it in a much more fluid way. We’ll continue to take strides each year to analyze our customers’ needs and how we can best serve our vendor partners. And we’ll apply that to help those partners and customers become more successful.
SE: What’s it like for each of you, partnering with and interacting daily with your brother? What are the pluses and minuses?
ANDY: The biggest plus is never having to question your partner’s intentions. You always know that you have someone looking out for your best interest, collectively. One challenge is drawing the line. If you’re together socially, how do you maintain both a professional and personal relationship rather than just always talking business?
STEVE: Partnering with my brother is one of my greatest gifts. When we started, I convinced him to join me in the business I loved, venture capital, because I wanted to spend more time together. Time is our most valuable commodity. As much as we work, I want to be with the people that I enjoy most. In addition to my brother, it’s vendors and customers.
SE: You guys grew up in a supportive Jewish home in suburban Detroit. What do you bring to Nalpac from that upbringing that’s helped you achieve success?
ANDY: I would hope that our reputation is that our word rings true. When we initially bought Nalpac, there were many questions and lots of meetings with vendors early on. They asked what we were going to do. We explained what we’d do, and we did what we said. I think that’s why we still have great relationships today.
I would hope that our reputation is that our word rings true. When we initially bought Nalpac, there were many questions and lots of meetings with vendors early on. They asked what we were going to do. We explained what we’d do, and we did what we said. I think that’s why we still have great relationships today. — Andy Craig
SE: Why is now the right time to rebrand?
STEVE: A lot has changed in 50 years. Nalpac’s model hasn’t changed, but the company has changed a lot in the last four years. We want to showcase who we are now, show our culture through branding and messaging. Our many new team members represent that. This rebranding is an excellent opportunity to reintroduce ourselves to customers Nalpac may not have done business with recently. And the rebranding represents who we are today.
There’s a new, modern logo with a technological edge, a new image, font, and colors, all representative of what Nalpac now does. The logo’s lines and colors represent goods flowing in and out. Nalpac’s role is to make it easy to connect manufacturers with retailers. The logo shows that we’re always planning what’s next to help ensure that retailers thrive going forward.
SE: The pandemic shifted how you work with retailers. Will large, in-person distributor shows and b2b events survive or be replaced by cost-efficient Zoom calls?
STEVE: We didn’t have a choice in the shift. Pre- COVID-19, in late 2018-early 2019, we started regularly doing webinar content, probably twice weekly, recognizing the need to manage retailers’ time. We provide them with educational opportunities to hear directly from manufacturer-partners on product and sales techniques and train staff without taking whole days for trade shows. We’ve continued that through COVID-19. We’re also working on improving presentations for people who are sick and tired of Zoom.
We’ll soon start interacting again with retailers in person. Our team is back out on the road this month. Human interaction, in-person, rubbing elbows with people; that can’t be replaced.
“We want to showcase who we are now, show our culture through branding and messaging. Our many new team members represent that. This rebranding is an excellent opportunity to reintroduce ourselves to customers Nalpac may not have done business with recently. And the rebranding represents who we are today.” — Steve Craig
SE: How do you see consumer culture evolving in the future? How should manufacturers respond to that demand?
STEVE: We see more consumer interest in sexual health and wellness and products. I don’t think manufacturers must hyper-focus solely on wellness; they should just watch mainstream trends and apply those as they would if it wasn’t adult. I’m excited that there’s less restriction on advertising, providing opportunities for retailers across all channels to interact better with consumers and manufacturers the ability to support those retailers.
SE: What’s the biggest threat to adult brick-and-mortar retailers today?
STEVE: Their biggest challenge is finding quality teams to staff stores and providing them with long-term careers. As long as the retailers continue to support their customers through education, training, and giving them a complete experience, they’ll always be successful, despite lots of competition.
SE: We hear more and more often that people want to go into stores to see the merchandise rather than buy it online.
STEVE: Absolutely. These are very personal items. You never know what you’ll get online. Because of the limitations in advertising and reviews, consumers can’t necessarily trust a brand right off without knowing about it. Visiting a store provides opportunities to touch it, see it, feel that it’s real — and have a better education from someone knowledgeable about it. A website has 40,000 items. It’s difficult to choose what’s good, bad or what you’ll like. That opportunity is crucial.
Even if a customer trusts a website, it’s difficult to understand what you want. You have to go through a series of questions. No artificial intelligence that’s out there so far compares to a human’s ability to facilitate that.
SE: Nalpac has been in business for 50 years and is still standing. What does that say about the company?
STEVE: Nalpac has been around a long time, and that speaks to its credibility; the credibility of our sales team members, some of whom have been here 25-plus years. We’ve done everything possible to invest in people, technology, and process to make it as efficient as we can for retailers and allow manufacturers to get their products into as many stores as possible. We’re doing things a little bit differently, and we hope retailers are receptive to that. Retailers who’ve allowed us to work with them have been pretty pleased. I hope retailers who hadn’t thought about Nalpac recently or have great relationships with other distributors will give us an opportunity to have a conversation with one of our sales team members and see how we can earn some of their business.
Our new website provides tools to search, filter, find and refine exactly what they want. In addition, we offer competitive discounts with shipping, usually next day. Being in the Midwest provides us a competitive advantage for many customers.
ANDY: We’ve been a very good partner to our vendors, and we continue to do so. We have great relationships. That doesn’t happen overnight. We’ve worked in-depth with them for four years to ensure we’re all on the same page about where we want to go, collectively helping to grow the business together.
STEVE: Our role is to provide retailers with the best possible products available and expose them to new items from both established and up-and-coming brands. We showcase what’s out there; retailers ultimately decide which items work for them.
Larry Kaplan has been the Legal Correspondent for ED Publications for 21 years. Mr. Kaplan is a broker in the sale and purchase of adult retail stores and adult nightclubs and the Executive Director of the ACE of Michigan adult business state trade association. Contact Larry Kaplan at 313-815-3311 or e-mail larry@kaplanstoresales.com.
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