Be nice and tell the truth.

Marty Lott attributes his nearly 50-year career and the massive growth of Top 40 supplier SanMar (asi/84863) to those two kindergarten lessons. They’re also going on his gravestone – not that the universally respected leader plans on going anywhere anytime soon. Even as he handed the reins of the company to his son Jeremy (current president of SanMar), the 71-year-old refused to ease into retirement. Jeremy actually created a position for his dad – managing the manager of the company’s distribution centers.

“I’m an entrepreneur,” the elder Lott says when broached about the idea of retiring. “Everybody we supply is family-owned, independent companies. I just like working with them.”

“When your employees are happy, your customers are going to be happy and then you’ll be happy.” Marty Lott, SanMar

As part of a college project, Lott founded SanMar in the basement of his parents’ Seattle home in 1971. A one-man operation, he handled purchasing, marketing and sales of T-shirts. Three years later, he hired his first employee and soon moved into a 4,000-square-foot rental location. By the end of the decade, the company grew to 20 employees, moved into a 10,000-square-foot facility, launched its first catalog and by his account, became the first industry supplier to hire a group of outside sales reps.

Now, SanMar is the largest supplier in the industry, with $2.4 billion in revenue. And the Issaquah, WA-based company, which was named Counselor’s Supplier of the Year in 2007, certainly has the accolades to match: an 18-year winning streak for shirts in Counselor’s Distributor Choice Awards; five-star supplier ratings in ESP; and numerous appearances on Counselor’s Best Places to Work list. Lott himself earned Counselor’s Person of the Year award in 2011.

All those accolades trace back to the quietly assured founder’s two golden rules. “We will actually fire people for either lying or not being nice,” Lott says. “I can train people how to do functions, but if you’re not a nice person, it’s almost impossible for you to last in the company. Our people have to enjoy working with each other. You don’t do your best when you’re not happy.”

Promo Insiders: In this podcast with senior writer John Corrigan, Marty Lott reflects on growing SanMar from his parents’ basement to becoming the largest company in the promotional products industry. Lott also discusses how the industry’s top supplier has endured the COVID-19 crisis.

Known for its extensive employee training program, SanMar weeds out applicants through a multilevel interview process and then flies them into Seattle for a two-week class. New hires are put up in a hotel, fed three daily meals and even entertained on the weekend. However, what happens after class is just as important. Lott recalls a trainee being rude to a bartender at the hotel, as well as a store manager. She was sent home before the two weeks were up, he says.

“We invest so much time and resources into training people to make good decisions on their own because it’s less expensive and far more efficient in the long run,” Lott says.

Here’s one of his favorite stories to tell: Many years ago, SanMar’s computer system went down around 11 a.m. on a Monday and wasn’t back up until noon on Thursday. The software issue was so severe that the company sent emails to customers informing them that if they placed an order, SanMar didn’t know about it because the system was down. On Wednesday, a customer called and claimed that their credit card had been charged by SanMar and was now maxed out, leaving them unable to check out of a hotel. Lott says that a SanMar employee picked up the phone and went to the manager to use a company credit card to bail out the customer.

“We had no idea if we even had that person’s money,” Lott laughs. “But somebody used initiative of telling the truth and being nice. That’s the attitude we’re looking for from people. I guarantee that customer kept buying from us.”

An industry pioneer regarding workplace culture, SanMar offered telecommuting long before working from home was trendy and government mandated. At one point, the office was 22 miles from downtown Seattle and five miles away from the last suburb. A beautiful but long drive, Lott says it was the number-one reason for turnover. A proud problem solver, he aimed to change that. “We realized we could get you to stay at the company by leaving you at home,” Lott says. “It made life better for everybody and we had almost zero turnover as a result. When your employees are happy, your customers are going to be happy and then you’ll be happy.”

“Be nice” isn’t lip service – Lott practices what he preaches. His family runs the Lott Foundation, which gives to causes they believe in. He also encourages SanMar employees to pick a charity every year that the company will donate to. Additionally, the company organizes a disaster relief fund, in which products from leftover inventory are given to the homeless or flood and hurricane victims.

Always envisioning that Jeremy would take over the family business, Lott made sure to instill those lifelong lessons in his son before stepping aside. “I’ve had the privilege to work with my dad for the last 20 years,” Jeremy says. “There’s no better mentor I could’ve had. He taught me the value of hard work, that we had to wake up every day and earn the business we had. He also taught me to treat other people with dignity and kindness, to care on a personal level about our customers, employees and vendors. I’m the leader I am today because of him, but more importantly, I’m the husband and father because of the example he set.”