St. Louis Startup is a Manufacturing Matchmaker

Posted by on Oct 1, 2013 in Featured Stories, Innovation Tuesday | 0 comments

Hear Manufacturers’ Inventory co-founder Brian Kohlberg’s interview with KMOX Radio’s Charlie Brennan aired 10/1/2013 here.  Scroll to appropriate link after clicking. 


In a warehouse at a large manufacturing company in St. Louis, Harry sits at his desk and contemplates how he will dispose of dozens of boxes of new, unused and no longer needed electrical components.

Nearly 2,000 miles away in San Diego, Sally, a purchasing agent for a small west coast manufacturer, is in need of those same electrical parts, but knows her budget won’t allow her to purchase the equipment new.

A St. Louis startup wants to make sure, in a manner of speaking, that Harry meets Sally.

The company is Manufacturers’ Inventory, an online marketplace that connects manufacturing companies that have unused parts and inventory taking up space in warehouses, with buyers around the world who need those specific parts.

Co-founder Brian Kohlberg says his company is meeting a $20 billion demand.  That figure – $20 billion – is the value the U.S. Census Bureau placed on the amount of excess electrical parts inventory that was clogging the shelves of American manufacturing companies in 2010.

Big companies often “overpurchase” such equipment to ensure they have enough stock to replace parts that wear out.   When those companies clean their warehouses to make room for new parts, they often are forced to liquidate millions of dollars of merchandize for cents on the dollar, donate it, or simply throw it away.

Kohlberg says the idea behind Manufacturers’ Inventory came about when co-founder Brandon Twitty was working for a local printing press company, and was frustrated that the company was simply discarding many usable parts.  Twitty later left that company to create a firm called Dead Inventory Management System (DIMS), to attack the problem.

Much of the excess equipment that is piling up across the country comes in the form of electrical components – and that is the area where Manufacturers’ Inventory, Dead Inventory Management System’s first business unit, is concentrating first.  Kohlberg says the company is considering plans to expand the business into areas such as excess commercial tires and chemicals.  But he adds that any part that has a part number could be a potential candidate for the Manufacturers’ Inventory system.

Speaking from a trade show in Las Vegas, Kohlberg noted Manufacturers’ Inventory already has signed 30 customers onto the portal, with another 30 creating lists of products to be marketed on their site.  He notes most of those who’ve signed on are sellers, rather than potential purchasers, although he says ultimately many the portal’s users will be companies that likely will buy, as well as sell, excess inventory.

Manufacturers’ Inventory will make its money via a commission on sales.  Kohlberg says unlike services such as eBay and Amazon, Manufacturers’ Inventory asks sellers to pay nothing upfront to list and market their excess items.

One of the advantages of the system, says Kohlberg, is a feature that allows Manufacturers’ Inventory to collect data that enables it to provide a recommended market price for each item being sold – not unlike a “Kelly Blue Book” suggested price in the used car resale world.  Buyers and sellers are free to choose the suggested price, or work out a price on their own.

A unique tech advantage of the system, says Kohlberg, is its ability to list large amount of items very quickly.   All a seller needs to do is provide a manufacturer part number and quantity on an excel sheet, and Manufacturers’ Inventory can turn it into a listing – with the ability to turn nearly 5000 unique line items into 5000 listings in under an hour.  Sellers no longer have to create and manage listings on sites like eBay or Amazon, a process that typically takes 10-15 minutes per listing.  Manufacturers’ Inventory creates those listings for the seller – a big plus, Kohlberg says, of the Manufacturers’ Inventory system.

Earlier this year, the technology accelerator fund Capital Innovators provided a $50,000 investment in Manufacturers’ Inventory. Since March of 2012 MI has called the T-Rex business incubator building in downtown St. Louis their international headquarters and home.



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