Case Studies

Basic Components Inc.

A Texas-based leader in component parts for the manufactured housing industry

Since May 1986 Basic Components Inc. (BCI) has provided a range of specialty products for customers in the factory-built modular housing market across the country. Based in Mansfield, Texas, BCI is in constant search of innovative products ranging from adhesives to caulking and sealant, faucets, flooring, roofing and more. The family-owned and -operated company, which is now transitioning to second-generation ownership, helps customers maintain the competitive edge needed to be market leaders.

Since inception BCI has ramped up its size and scope to distribute leading products across a network of distribution affiliates and warehouses nationwide. Oregon to Idaho, Minnesota to Indiana and on, the company’s national distribution network includes seven affiliate warehouses supplying materials to manufactures and contractors in the factory-built housing sector. BCI distributes products from top national vendors such as Daltile Corporation, Westpac Materials, NorthStar Chemical and Henkel.

Seizing the opportunity

Russ Chappell, founder and owner of BCI, alongside with his wife, Patricia “Peachy” Chappell, has more than 40 years of industry experience. “I’ve been in the business since the late ’60s,” says Chappell. “Previously, I worked for United Sales doing the same thing for 17 years. I loved the business model and how everything came together.”

In the early ’80s Chappell was employed by Cast Products.  The company was based in Indiana, but maintained a location in Waco, Texas. “When the economy slowed down Cast Products made a decision to close the Waco location,” recounts Chappell.

As a contract employee for Cast Products, Chappell heard the news and knew it was an opportunity he couldn’t miss. He approached the owner of Cast Products and expressed his interested in purchasing the Waco location. Much to his surprise the owner not only agreed to the proposition, but also put Chappell in touch with a local bank to obtain startup financing.

With a business loan and some help from what Chappell calls “angel investors,” he took the reins and renamed the company BCI. “It was my dream come true; I had always dreamed of being in control of my own destiny,” says Chappell. “I had the experience with the existing business model and was able to seize the opportunity.  We officially purchased the company in May 1986. In 1990, my wife and I purchased the remaining stock from my partner.”

Even with the established business model, getting BCI off the ground wasn’t easy for Chappell and his family. “When we first took over, my wife and I were commuting 140 miles a day while raising two boys,” he says. But for Chappell, failure was not an option.

Fortunately, Chappell had one of the best business partners he could ask for. “I wouldn’t have been able to pull it off without my wife,” he says. “She’s been the balance; the one who makes the nuts and bolts of everything come together.”

A unique business model

Together, the pair has built BCI into the nationwide leader it is today, supplying specialty products to the manufactured housing industry. “In 1995 we moved the operation to Mansfield, Texas, where we now have 80,000 square feet of warehousing,” says Chappell. “In 2001, we established a satellite location in Phoenix, opening 35,000 square feet to serve more southwest markets.”

BCI’s business model is unique in the sense that it’s really two business models in one. “We’re a wholesale distributor and we’re also a stocking manufacturer’s rep,” explains Chappell. “As a wholesale distributor, BCI buys a product from a component manufacturer, such as ceramic tile, then bring it to our warehouse, mark it up to a profitable level and go out and sell it to the manufactured homebuilders in our area and beyond through distribution affiliates.”

BCI completes the process in a rapid fashion. “When we receive an order, the manufacturer gets it the next day, but we go beyond just-in-time turnarounds,” says Chappell. “We also do in-plant inspections weekly to ensure and train proper product application on products we sell and deliver. We do a great deal of in-house research and development to find new products for the industry as well.”

A generational transition

Now, as Chappell and his wife approach retirement age, it’s up to the next generation and core group of tenured employees to carry on the company’s unique business model. “The company is not our greatest asset; our greatest asset is our associates,” says Chappell. “This is why, in 1995, we launched a profit-sharing program. Every year BCI gives 17 percent of pre-tax profits back to its employees because they are the backbone of the company.”

Chappell says BCI’s company culture is unlike most. “We have many long-term employees with more than a 65 percent retention rate,” he says. “There are many individuals who have been here for more than half of the company’s life span.”

With a strong team and two sons to carry on the family business, BCI is in the midst of a major transition, but it’s one Chappell feels confident will be carried out with relative success. “Our sons Cory and Todd Chappell are both involved in the business,” he says. “They’ve been hard workers from the beginning, starting their own lawn mowing business in the seventh grade. They helped out at BCI throughout the summers and part time through high school and college. Now they both have business administration degrees with 15 years of experience and are ready to take the reins.”

“As operations manager, Todd is the oversight and Cory handles sales and marketing,” adds Chappell. “The boys are decision makers in their respective roles and it’s likely that by 2017 they will be majority owners. We’ve been in a succession plan process for about five years.”

As the company begins to change hands, Basic Components Inc. is proven that the second-generation can carry on a strong name and business model based on quality, innovative products for the modular housing market.

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Spring 2018



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