Nine Decades … Four Generations … One Mission
At Shaffer Distributing, That Means Keeping Relationships at the Core
This is the fourth time RePlay has saluted the venerable Ohio-headquartered distributing company known as Shaffer Distributing. This time, the majority of the focus is on the company today, the key people they’ve put in place, and the culture that has been carefully strengthened since the beginning.
Shaffer’s story is one of evolution. Early on, from its headquarters in the Midwest, Shaffer was regarded as a major distributor of full-line vending equipment, amusement games, commercial microwave ovens and jukeboxes. Those years and beyond were times when distributorship had assigned geographic territories, so Shaffer stayed strictly within their bounds (which was all of Ohio, plus portions of Kentucky and West Virginia).
Business continued to evolve and in more recent years, the emphasis on traditional “territories” faded away. Today, Shaffer has emerged as one of the largest and most respected nationwide distributors of a wide range of products, providing a multitude of services to traditional street routes and to the thriving family entertainment center business. The team sells product in every state, as well as Canada.
But, before we delve more into the 90-year-old company today and where they’re headed, it is only fitting to pay the proper attention and respect to Shaffer Distributing’s storied past.
Shaffer Distributing got its start back in 1929 when Columbus, Ohio, pharmacist Estel “Pop” Shaffer, became intrigued with a penny-operated, countertop target game built by ABT being operated in his West Broad Street drug store. (This very game remains on display in the Shaffer showroom and graces our front cover.)
The idea was to keep customers amused while they waited for their prescriptions to be filled. After a few months, Estel, noticing the number of pennies going into the machine, decided to buy games of his own to put in other shops around town. He subsequently gave up the pharmacy business and became an upstart operator at the dawn of the Depression.
Fiscal responsibility was the order of the day and despite the dire economic times, Estel was able to grow his company. His core philosophy of taking care of the customer was in place back then as well.
Estel’s son Ed got his start early in the company, helping his dad part time to run and grow the route while he was a student in high school and college (Ohio State). He serviced equipment, made collections and delivered new machines to locations. In 1932, he joined Pop full time in the business and they eventually added jukeboxes to the mix, and they changed the name of the company to Shaffer Music Company around 1935.
With about 500 machines on location, business was booming and competition didn’t really heat up until the late 1930s. In 1937, they entered the distribution business when they were awarded the Seeburg jukebox line, adding other factories and growing their territory as time marched on.
In 1954, Estel retired and sold his interest in the company to his son and partner Ed. “Under his second-generation leadership,” said Bill Kraft, current vice chairman and former president, “Shaffer became one of the largest jukebox distributors in the world with numerous U.S. offices, as well as one in Japan.” Ed changed the name to Shaffer Distributing in 1962 and it was about a year later that his own son, Steve, followed in his part-time-during-school-years employment at the company.
Ed passed away unexpectedly in the fall of 1981, and Steve Shaffer, at the young age of 38 –– and while grieving the loss of his father –– jumped in. More than ready to lead the company, the third generation Shaffer was determined to make sure Shaffer Distributing not only survived, but thrived.
Bill Kraft remembers the times quite well. “Steve went right to work and was extraordinary in his vision. He immediately made the decision to visit all our key suppliers to ensure their confidence going forward.
“Steve quickly surrounded himself with a team of people he trusted to help run the company and wasn’t afraid to let them grow with the company,” Kraft continued. “In those days, which coincided with the enormous video game boom, Steve remained focused and was determined for the company to be the very best it could be, not necessarily the largest.
“‘Shaff’ was very proactive in seeking new opportunities for growth,” Kraft continued. “Accordingly, the company bought J&J Distributors in Indianapolis in 1998 and Cleveland Coin Machine Exchange in 2005. But arguably the boldest move Steve made came in 1988 when he made the decision to get back into the operating business.”
Buying three routes, Steve founded Shaffer Services, which coincidentally is celebrating its 30th anniversary, and now flies under the banner of “Shaffer Entertainment.”
A decision born out of business conditions in order to provide diversification and an additional revenue stream, Steve explained, “Re-entering the operating side of our business was a result of the street operators here in Columbus not purchasing new and superior products for several years. Their contentment with running older and outdated equipment obviously affected our distributing business.
“Frankly, I wasn’t certain at that time what other businesses we could connect with this company,” Steve recalled. “I had a vision of janitorial supplies, coffee and confectionery products associated with the locations we were operating in at the time.”
Steve Shaffer remains chairman and still actively involved with the company, but not so much with the day-to-day operations. And because of the culture he helped perpetuate, he doesn’t need to be. Said Bill Kraft, “It is a well-known fact that Shaffer Distributing has experienced very low turnover among key employees.”
Steve keeps the team focused on the core values. Bill added that one of Steve’s key philosophies has always been: “Obviously, our many loyal customers mean everything to us, however, it all starts with people and
good employees. They are our number-one asset. Keep the team together and we shall succeed.”
Among those key members of that team today are Steve’s sons, Andy and Scott.
“When someone asks me how long I’ve been in the business, I always like to smile and say, ‘Well pretty much since June 9, 1967, the day my mom, Mary Jo, gave birth to me,’” Andy laughed.
“The good news is, too,” he said, “that I’m old enough to actually remember my great grandfather, Estel. I remember playing baseball in the yard with him and of course, I remember my dad’s father, Ed, who sadly didn’t last that long on this planet. I think he passed about the time I was in about seventh or eighth grade. I feel incredibly lucky, just as a family member, to rub elbows with those guys at some point.”
Andy, President of Shaffer Entertainment and former President of AMOA, has totally embraced the culture of “family,” especially in regard to employees. Andy has heard dozens of times from his team members who worked elsewhere and for other types of companies that “I wish I had been here earlier. My family and I have never been treated like this before.”
Bill Kraft added, “Andy is, of course, a superb operator.” Steve Shaffer estimates that the company runs about 4,000 pieces of equipment and it’s still growing, through organic growth and continual evaluation of acquisitions and partnerships with other operators. Andy and his crew have built well upon the original three-route combination in Ohio and Indiana. Equipment on locations extends beyond the traditional pool tables and music and includes darts ATMs and more. Dart and pool leagues also factor into their success on the street.
When it came to Steve’s other son Scott’s choice to go into the family business, it was very intentional. “I took it for granted when I was young because I just knew it’s what I wanted to do. Whether it was here or somewhere else, it was going to look very similar.
“When I was in college, I’d come in during the summer and work in parts, but my dad was very specific about making us get out and do other things in the summer when we were in high school. He was intentional about that,” Scott stated.
“Dad told me that first of all, working for Shaffer Distributing wasn’t a ‘gimme’ and secondly, that I wasn’t going to come in and out of it,” Scott continued. “He said, ‘If you come in but then choose to leave to follow a passion or something, I’m 100 percent behind you, but don’t think this is a consolation prize. We’re not just sitting here so you can come back to it.’”
Today, Scott Shaffer is President of Shaffer Distributing and has brought considerable skills and talent to the organization, said Kraft. “He has added additional structure and fresh new vision to the company as it continues to move forward.”
A driven individual, Scott says, “I couldn’t wait to join the company 26 years ago! It was, and remains, my fervent passion. I’ve tried to immerse myself beyond just sales with every aspect of the company while Dad and Bill concentrated more time on strictly the sales side of the business.
“My desire is, of course, to continue our sales growth, profitability and great tradition. I am passionate about goal setting and accountability. It is extremely important for us to create and maintain strong relationships, a pleasant work environment and an adherence to our core values. There still are plenty of areas for us to improve and get better,” he continued.
One message you will consistently hear from Scott concerns the value industry products provide FEC owners and operators. “We’re selling return on investment devices. It saddens me that many view our products as commodities. Bill and I have talked about it for years. We want our customers to buy from us not because our prices might be the lowest, but because they trust we will help them best to maximize their earnings over five to 10 years. Let’s be clear, the annualized return on these games over the course of their lifetime would astonish your everyday stockbroker. We also place huge emphasis on service support.”
Aside from the “Shaffer boys,” the company has assembled quite a mighty group of other individuals.
At the top, serving as confidant and friend to both of the current generations of Shaffers, is Vice Chairman Bill Kraft. His many years of active sales efforts and company leadership makes him the effective “big picture” guy. He still makes calls on behalf of Shaffer Distributing, and loves it, but today his salesmanship doesn’t pertain to pieces of equipment but the company as a whole. His title could just as easily be “Goodwill Ambassador.”
Bill says he is proud to meet with current and potential customers to talk about the culture of Shaffer Distributing and the service the team provides before, during and after the sale. But, he’s also extremely happy to be building new friendships. After all, it’s those relationships that build a richer personal life as well as a stronger company future.
He’s the first to admit that they’re not perfect, margins are tight and competition is tough, but “what I try to express is that if you give us the opportunity, we will truly earn your business.”
Then there’s Chief Operating Officer Chuck Ropke. Bill said, “In many ways, Chuck is the engine that makes Shaffer Distributing run. His skill set is off the charts: technical support (games, music and vending), customer service, parts, transportation logistics, computer skills, real estate, writing skills, construction, management, etc. He is a true gem and one of the most multi-talented individuals in the industry!”
Kelly Norton, Chief Financial Officer, replaced Paul Westbrock, the man who Bill called “one of the truly finest financial executives in the industry.” Paul retired at age 73, but well before his exit, he hand-picked Kelly, who came aboard in 2016 and was promoted to CFO in 2018.
Scott Shaffer said, “Kelly is wisely talented and adds tremendous value to the management team and not just with numbers. He is bright, personable, sharp and fits in perfectly with the organization. We are thrilled to have him on the team.”
George Speakman, Vice President of Sales, came to Shaffer as their FEC Specialist in 2014 from Enterprise Rent-A-Car. One might be curious how the skill set required in car rentals applies to helping fun centers: it’s more of the relationship building emphasized at the agency than anything else. He’s been a quick study and is a skilled salesman, but brings so much more to the team, adept at doing layouts and understanding FEC customer needs.
“Already well known within FEC circles,” Scott said, “George has progressed in his career with Shaffer faster than anyone in recent history. George flat out knows his stuff. Watch out for him.”
Bob Muniak is one of the talented sales representatives at Shaffer and a real standout. With the company for about 20 years, Scott said of Bob: “He is easily one of the very best music and game salesman in the industry.” Added Kraft, “His degree of product knowledge, passion for customer service and ‘bloodhound’ instincts set him apart and make him truly extraordinary!”
There’s also the all-important FEC installation team, in which Bill Kraft says they take “enormous pride.” As good as they are, he said the company constantly reviews the process with each project with “the sole objective of being the best in the industry.”
Kraft continued, “We sell hard on our service support and always have. To new customers, we stress that the decision isn’t just about who has the lowest price. Sure, we have to be competitive, even though distributor margins are tight. It’s more about supporting the customer after the sale. The question becomes who will be there on a continuous manner to help ensure the customer’s stream of revenue. Follow up is everything.”
He added, “We’re not perfect and there is always room for improvement. That said, I believe our COO Chuck Ropke is the best in the industry. Of course, I am biased, but Chuck sees the world through the eyes of the customers and knows exactly what to with the smallest of details. He constantly strives for perfection in the execution of an installation.
“Our crews, on more than one occasion, have worked in the middle of the night to accommodate our customers,” Kraft continued. “Our team consists of wonderful employees and they are our greatest assists. Shaffer is and never has been a ‘dump and run’ company as it pertains to our installations…and never will be.”
We know you want to know – and we did too – so we asked both Andy and Scott if there are inklings that a fifth generation of Shaffer is interested in picking up where their fathers leave off. The answer from both is that it’s just too early to tell.
Andy has two sons, Drew (24) and David (18), and when asked if either seem inclined toward the business, he laughs, “That’s the million-dollar question! Every single day, I think about it. How do I get this business to the fifth generation?
“Drew is in the film production/editing industry and incorporated his own Shaffer Productions company in Ohio when he was still in college,” Andy said. “David is just getting ready to graduate from high school and attend Eastern Michigan, and his passion is theater.
“One of my biggest goals for the near future, in order to get it to the fifth generation, would be for Shaffer Entertainment to evolve or morph into some sort of an entertainment company that incorporates my son’s video production talents somehow,” he added.
As for Scott, he has two daughters: Macy (age 15) and Edie (12). “My brother and I always say that we’re fourth generation and we don’t want it to end here,” said Scott “Our goal is to get this to the fifth in a healthy and growing manner, so I haven’t given up on his boys and we still have hope in my girls.”
“Throughout its long history, Shaffer has taken great pride in providing the best in professional sales advice and unparalleled service support,” said Bill Kraft. Prudent financial oversight has been a key component to Shaffer’s success from its founding in the Depression Era, through troughs in the industry and equipment buying. Kraft noted that the company, “which represents virtually every video, redemption and arcade game manufacturer in the industry, has consistently maintained one of the highest credit ratings in the industry.”
No matter who you talk to at Shaffer, there are several recurring themes about why they’ve survived this long when statistics show only 3 to 5 percent of family businesses make it to their fourth generation. They are commitment to people, building relationships, integrity, class, humility and fiscal responsibility. When you hear customers identify and laud those same traits, you know they’ve been successful in cementing those philosophies into the very core of the organization.
Steve remembered some key lessons his father Ed preached continually: “Don’t buy more than you can sell quickly and pay for within the terms of your suppliers,” “Confront accounts receivable daily,” and “When possible, share annually the profits with those that have contributed to the success of your company.” No doubt, those have been passed along to employees and his sons.
“I am very proud of our company reaching its 90th year in business and, frankly, because my father passed away when I was 38 years old, I didn’t think I would live this long,” Steve added. “I don’t believe my father –– or grandfather –– ever envisioned 90 years. Business then was day-to-day and year-to-year without any long-range planning. Meetings just didn’t happen very often.
“After rounding third base and heading home, my sons have done a great job of allowing me to sit in the dugout and voice opinions regarding things I may not agree with that are business related,” Steve remarked. “The teammates they have brought into our business in the past couple of years are excellent and have been a central factor towards our success. In my 55 years in this business, I’ve been blessed with terrific people starting with my mentor Bernie Flynn, who’s still remembered fondly by some business veterans out here today.”
He concluded, “As for me, I’d like to be remembered by all of the great friends I’ve been associated with in our industry and the tremendous times we have shared together through many years of joy. It is a tremendous industry we all enjoy.”
Congratulations, Steve, Bill, Scott, Andy and the rest of the “family” at Shaffer.
[Editor’s note: To download the full section, which includes profiles of several members of the Shaffer team and remarks from some customers, click here.]