Valley Industries Triples Revenue to $80M+ with SPS Commerce Fulfillment
Valley Industries manufactures and distributes thousands of products, across several categories and brands, that continue to set the bar in performance and quality. Founded in 1960, the company is based in Paynesville, Minnesota. It sells five major brands, including Master Manufacturing sprayers, Everflo 12V Pumps, A1 Mist Sprayers, Comet Diaphragm & Industrial Pumps, and Bestway Ag agricultural equipment. Their products reach wholesale, retail, ecommerce, and direct-to-consumer channels.
Since Darrin Larson joined as CFO 11 years ago, Valley Industries has tripled in size, growing from 41 employees and $24 million in annual sales to more than 170 employees and over $80 million today. Its retail relationships have grown alongside it, from a single trading partner to 29 trading partners today, including Amazon and Mattoon Rural King.
The challenge:
A single dedicated EDI specialist had to keep pace as revenues tripled and dropship transactions took over.
The solution:
SPS ran EDI and recently completed a Microsoft Dynamics 365 Business Central SAAS implementation without slowing down Valley’s orders.
The result:
Revenue tripled to $80M+ while EDI support staff headcount stayed flat at one dedicated person.
The Challenge
Valley Industries built its EDI operation around a single trading partner and a mostly distributor-based shipping model: containers and truckloads moving to warehouses, not individual orders moving to individual doorsteps. Over the past decade, that model has reversed. Roughly 85 percent of the company’s business is now dropship, small parcels shipped directly to end consumers, each carrying its own labeling, packing, and compliance rules set by the receiving retailer.
The company grew to match: more than 29 trading partners, including Amazon and Mattoon Rural King, and a workforce and revenue base that both roughly doubled. Through all of it, Valley Industries kept the same level of support staff handling EDI day to day. Adding headcount every time volume or complexity increased was never part of the plan.
The Solution
Valley Industries runs its EDI through SPS Commerce. One dedicated specialist checks the SPS dashboard daily to keep transactions moving across more than 29 trading partners, with larger, high-volume partners running on full automation.
That flexibility, combined with direct access to SPS support rather than a do-it-yourself connector, is why Valley Industries stays with SPS.
“One of SPS’s strengths is being able to shift and meet customer needs. Things are changing so quickly, and that’s something I’ve been impressed with.”
– Darrin Larson, CFO, Valley Industries
When Valley Industries needed to move its accounting system from an on-premise deployment of Microsoft Dynamics 365 Business Central to the cloud SaaS version, SPS built a test database so the team could run a wide range of transactions before going live and then provided a dedicated staff member on Monday morning cutover to double-check that orders were flowing correctly into the new system.
The results
When Darrin Larson stepped into the CFO role 11 years ago and took on the task of overseeing EDI, Valley Industries was a 41-person operation generating $24 million in revenue. Today, the company has grown to more than 170 employees and surpassed $80 million in annual revenue. Its trading partner network grew alongside it, from a single retailer to 29, including Amazon and Mattoon Rural King, and its business model shifted from distributor shipments to roughly 90 percent dropship. Through all that change, Valley Industries never added a second dedicated EDI employee.
Larson estimates that without SPS automating those transactions, Amazon’s order volume alone would have required two to three additional hires, or close to $180,000 a year in labor and fringe cost.
The Microsoft Dynamics 365 Business Central migration also came ahead of schedule. Valley Industries targeted an August go-live and finished in July, with SPS fully supporting the connection through cutover, so orders kept moving without disruption.
“The biggest thing from an SPS standpoint is having that knowledge base and group of experts. When things get sticky, you can lean on them to get you through it. That’s been the biggest takeaway from my standpoint.”
– Darrin Larson, CFO, Valley Industries
Lessons Learned
Darrin Larson’s decade running EDI at Valley Industries points to two lessons for other finance leaders.
- Get the API-based connection right first. Once it’s established, everything else runs through it. That architecture is also what made a full ERP migration far less painful than it would have been under the old model, where every trading partner connection lived inside the accounting software itself and had to be extensively tested and modified with every upgrade.
- Test every transaction type before going live, not just the common ones. Lay out every scenario, including dropship, truckload, and shipment acknowledgments, and run all of them before cutover. Larson credits Valley Industries’ tech-savvy warehouse manager, who understands retailer-specific shipping label and packing requirements, as essential to getting that testing right.
To learn more about SPS Commerce solutions, request a demo today.
One of SPS’s strengths is being able to shift and meet customer needs. Things are changing so quickly, and that’s something I’ve been impressed with.
— Darrin Larson, CFO, Valley Industries