Two young men from Brooklyn who become lifelong friends and business partners crossed paths because their wives shared the same obstetrician. They can remember exactly when they started in business together, much to the chagrin of their 40-year-old children.
For Alan Elkin and Arthur Wagner, those milestones are happy reminders of their fast friendship and the company the two built together when both were working in Manhattan: Wagner for a broadcasting company and Elkins an outside sales representative who came to work with Wagner at Manhattan”™s long-defunct Kaiser Broadcasting.
“When our company was sold twice, I started seriously thinking about starting my own business,” said Wagner. “It became evident to both of us we were never going to make our fortune at what we were doing.”
Wagner”™s business plan may not have succeeded in today”™s marketplace ”“ “A checking-plus line of credit and working in my brother-in-law”™s recording studio” ”“ but when he and Elkin began in to attract clients interested in bartering underperforming assets to a third party to get more bang for their buck, Wagner found Rockland County”™s New City, and he and Elkin moved their Manhattan business to the west side of the Hudson, where they have grown and prospered since 1984.
Active International has grown from its small Manhattan office space to more than four floors in Orangeburg”™s Blue Hill Plaza. It employs more than 600 people worldwide. Despite the recession, the ESOP (employee-owned company) showed $1.4 billion in sales in 2009. “Our new fiscal year began on July 1,” said Elkin, “and our indicators show 2011 will be a better year than the last.”
The company buys underperforming assets ”“ with cash or (mostly) with credit ”“ and turns them into profits that can be used by the former owners of those assets to buy media, for other purchases or to bolster other facets of their organizations. The plan has won the partners the respect of Advertising Age, which ranks them eighth globally among media purchasers.
Active works with companies with real estate, capital equipment, receivables and bad debt, becoming the owner of the underperforming assets for “trade credits, which they then bring to our company and can use them for media, goods or services,” said Elkin. “They receive 100 percent of the wholesale value, and we own the inventory. For example, Kroger supermarkets may have a store that has gone ”˜dark”™ ”“ a highway may go through or the store doesn”™t get any traffic. We acquire the real estate property for the full book value in the form of a trade credit. They bring their credit to us for advertising in newspapers, local radio, spot TV and brand awareness to build sales.”
Elkin said the partners “dreamed big, but never imagined we would become the size we are. We created a better package and have become the largest trade company on a global basis because we have the ability to retire those trade credits.”
Establishing themselves ethically was essential, added Wagner: “We knew when we started we were entering an industry that didn”™t have a very good reputation. Most had ”˜one shot deals.”™ We joined the International Reciprocal Trade Association and formed a trade council. We wrote a code of ethics and stick to it. It”™s those methods and our desire to make sure we fulfill our promises that makes us a success.”
Like everyone other business, Elkin says Active got hit by the Crash of 2008. “Advertising went down close to 20 percent in 2008 and 2009; advertisers chose to hold on to dollars. Most smart businesses know they have to advertise to stay in business ”“ there”™s a need to stay in the public eye ”“ so we have seen it pick up again.”
The two men formed Active Cares 10 years ago as the company”™s charitable arm and have donated millions through it.
“Today, with the economy in the shape it”™s in, there is even more need,” said Wagner. “Many companies have scaled back and some have stopped entirely. It”™s important to us to support organizations that give back to the community.” Active International will be honored by the Rockland Economic Development Corp. at its annual luncheon in November.
“We rolled the dice, and we won,” said Wagner, who says his forte is outside sales, while Elkins is the point man when it comes to corporate administration. “Our families are very close, and when we go away on vacation, it”™s usually together. And yes, we talk business. This is our passion ”“ it”™s more than just a business. When you are surrounded by people you enjoy being with and working with, it doesn”™t get better than that.”
