Hampel Oil Company:

An Expanding Family Enterprise

The following article appeared in The Wichita Eagle-Beacon on Monday, June 3, 1985.  It was written by Forrest S. Gossett, Staff Writer.

FAMILY BUSINESS; DIVERSIFICATION IS KEY FOR GROWING HAMPEL OIL, SPARKS EXPANSION PLANS

In 1976, Al Hampel's job of 30 years came to a sudden halt when Standard Oil Co. (Indiana)--now known as Amoco Corp.--changed its method of delivering gasoline and other petroleum products to its dealers.

Rather than employing company drivers to get products to the market, Standard wanted to use independent contractors, or jobbers as they are called in the oil industry.

Standard, like many others, was responding at the time to the changing gasoline retailing market.  The Arab oil crisis of 1973 and '74 had forced retail prices up and cut deeply into retailing margins.

COMPANY PROFILE

Using jobbers for product distribution costs the major refiners less money because they employ fewer people.

Hampel, though, didn't like the idea of becoming a jobber.  His 30 years' service, combined with the fact that his job was being eliminated, made Hampel eligible for retirement benefits and severance pay.  He took both.

Then, at the urging of two of his sons, Bob and Ken Hampel, decided to open his own company--Hampel Oil Distributors, Inc.  He signed contracts with Standard and other major oil companies to distribute their products to industrial customers.

"I already had some customers in those areas and they followed me when I opened the business," said Hampel.

Still the business started slowly, with Al, Ed and Bob, along with and Al's wife, Oliva, as the only employees.  There was just one truck delivering oil to industrial clients throughout the Wichita area.

Nine years later, Hampel Oil is a different company.  Al, 62, has stepped back and no longer runs day-to-day operations.  That job has fallen to his oldest son, Bill, 37.  Three other sons, Ken, Ed and Bob, are vice-presidents, and Oliva Hampel is the company secretary.

Hampel Oil distributes oil-related products throughout Kansas and into parts of Oklahoma, and is growing, Bill said, at an annual rate of 15 percent.  Hampel Oil will post nearly $10 million in annual sales this year.  The company operates a fleet of 16 trucks, including large fuel tankers and small oil trucks, and employs 20 people, six of whom are Hampel family members.

Business, the family said, is booming--so much so that the company is doubling warehouse space from 10,000 square feet to 20,000 square feet at its 3727 South West Street headquarters in Wichita.  Hampel Oil also operates warehouse facilities in Garden Plain and in Iola.

FACT SHEET

Company: Hampel Oil Distributors Inc. Business: Distributing refined petroleum products to industrial customers through-out Kansas and in parts of Oklahoma.   Officers: Al Hampel, chair man; Bill Hampel, President Bob, Ken and Ed Hampel Vice presidents; and Oliva Hampel, Secretary.  Employees: 20 Sales: $10 million expected this year. Outlook: "We expect to continue growing at about 15 percent per year as we have been doing in previous years."  --Bill Hampel

The Company specializes in the industrial market--construction equipment operators and manufacturers, providing lubricants, oil products and fuel to run heavy machinery and trucks. The company also supplies two service stations--one in Valley Center and one in Iola with gasoline.

"Over the years, we've acquired two distributors," said Bill Hampel.  "We have picked up various oil company distributorships.  We've picked up Mobil, Chevron, Exxon and others.  We are a multibranded dealership and that's important because we service a diverse industrial base.  That's really what's behind much of our expansion."

The oil products business is a high-overhead venture.  To meet customer demand, a distributor needs warehouse space to house about 2,000 various petroleum-related products.  In Hampel's case, with a variety of product line to carry, storage space is limited, one of the reasons the company is adding on to its present facility.

Hampel Oil manages its product flow with a computerized record keeping system that has now been tailored to the oil distribution business.  The company is installing new hardware and software that Bill Hampel says will help the company keep track of its inventory when orders are placed and shipped.

He said that the inventory control features of his new software will prevent the company from running out of supplies and help the firm keep better track of sales.

One of the areas Hampel hopes to get the company involved is service.  When Hampel Oil's warehouse addition is opened later this month, the company will lease space to a small firm that plans to start an oil analysis lab.

Though the lab will not be directly owned by Hampel Oil, Bill Hampel says much of its service will be dedicated to the company's customers.  For a $4 fee per sample, the lab will test oil samples from machines and engines.

Bill Hampel said that means customers will be able to send oil samples in from their machinery for instant analysis.  By testing oil, it is possible to immediately determine if an engine has serious mechanical wear problems or if it needs major repair.

"With the lab, we'll be able to give them 24-hour service, and for someone running expensive machines, that can be very critical," said Bill Hampel.  "Of course, if there's a major problem, we'll call them immediately."

In addition to service, Bill Hampel said the company plans to concentrate on adding new business.  Hampel Oil employs three full-time salesman who cover territories throughout the state.

"We will focus on oil products in areas outside eastern and south central Kansas," said Hampel.  "Fuel sales outside that area wouldn't pay off, but oil products sales can.  We plan to focus on the farm market and others for new business.

Though he says the petroleum products distribution market is crowded with about six major competitors, Bill Hampel thinks Hampel Oil can continue growing at a brisk pace for many years to come.

"At this point, I don't think the market has nearly reached its saturation point," he said.  "I still view this as a neophyte company in many ways.  There's a lot of business out there that I'm certain we haven't started to touch."

Supplement to Wichita Eagle-Beacon as of May 1, 1988

"In the summer of 1986, Hampel Oil bought out the company that ran the lab service.  A chemist was hired and it now operates the lab as a service for its customers.  It has been used as an effective tool to acquire some significant commercial oil business.

Hampel Oil's warehouse underwent its fourth expansion in late 1986 to accommodate a truck shop.  It now has approximately 22,000 square feet under one roof housing its office, lab, warehouse and truck shop.

Over the past three years the company has emphasized obtaining contracts with service station and convenience store operators.  Today it has contracts to supply fuel with two convenience stores, three service stations and one truck stop.

The company presently employs approximately 27 full-time and 3 part-time employees.

A general downturn in our area's big three industries of agriculture, oil production and light aircraft manufacturing has dampened growth somewhat from 1986 through the present, but agriculture seems to be gaining strength, and the general aviation industry has bottomed out and is on the way upwards again.  We are still expecting to grow in the 15 percent per year range."