The global recession that officially began late in 2007, the worst since the Great Depression, is finally loosening its ugly grip on the economy. In recent interviews with key wholesalers, the overwhelming verdict was that 2010 looks strong for independent retailers, wholesalers, distributors and closeout buyers. Although most of those interviewed were uncertain if Washington, D.C. policymakers had the wherewithal to fix the wounded economy, what they were absolutely certain of was the direction of their own companies and the outlook for their customers.
Lisa Sperow, company founder and president, Overstock Avenue, Charlotte, NC, explained that 2009 was a great year for her company, and 2010 looks good as well. “We are in a big growth phase right now, and have seen a lot of businesses shift models. Basically, we have gained many customers who were not previously buying off-price. They have had to shift their models to survive this market. These companies will layer in off-price so that they can continue to offer quality brand name merchandise. But they need to be able to buy and sell it for a lower cost than they were used to.”
Sperow is quite aware of a positive turn in the economy, but her optimism for 2010 centers on what her company has done to position itself for the year ahead: “We are optimistic for our growth,” said the president, “because we are adding new product lines, we have added a new website, and new programs for our customers.” Sperow’s greatest concern is about her customers and their buying habits. Although buyers are weary of this recession like everyone else, she said that they need to begin buying earlier in the cycle. “Many customers wait to a more in-season point to buy, rather than stocking up at the beginning of the season. We will see merchandise tighter this year than it has been in the past, so we on the wholesale side will stock up now. We would encourage our retail customers to do the same. Get merchandise early.”
Sperow suggested that the key to success in retail is to continually add new product to the mix, and do not let old merchandise sit there by itself. Retailers must keep adding and layering new merchandise to excite their customers when they come into the store. “Each time the customer comes into your store, they must see new merchandise, rather than stale inventory,” Sperow advised. Overstock Avenue has rebranded itself completely. For the past seven years, it has been known as Madison Avenue Closeouts. Along with a new name, it is offering a new, extremely user-friendly website to help buyers find what they need. It now posts inventory that Overstock Avenue has in its warehouse, and inventories on hand, at its suppliers’ warehouses. This way, Overstock Avenue customers can shop multiple warehouses to get just what they need; a customer service that saves time.
A great new service of Overstock Avenue is to allow customers to visit its warehouse personally. Sperow explained, “We have launched a new program in our warehouse called our ‘Pick and Choose’ program, which gives people another option to buy. In the past, they could select product off of the website. Now, we are opening the warehouse for retailers to come in and pick and choose their own merchandise. This has been an extremely popular program.” There are more programs coming as 2010 progresses. “During the course of the year, we will add several new suppliers. We will not only be offering new categories, but will offer several more price points. In the past, we have offered higher end products. Now we will offer more budget friendly merchandise. We have always been strong on quality and we will continue to be. But what we will bring in are high quality products at a more budget friendly price.”
Awesome Wholesale, Vincennes, IN, is enthusiastic about its prospects in 2010, according to Roy William Robertson, importing/marketing director. He said that 2009 was a year of change in an uncertain and unstable market. “We were able to weather the storm and come out even stronger,” he asserted. “During this time of economic uncertainty, we focused on what makes our company best: our customer service and our unique product designs. By refocusing our efforts back on ourselves, we strengthened our existing customer base,” he said. “We also branched outside of our traditional market into more specialized markets. We brought our unique product designs, and over nine years experience as industry leaders in the scale market, to new customers who were still using mechanical scales or other methods of weighing. By targeting these segments, we were able to grow our customer base by nearly 20 percent in 2009.”
Awesome Wholesale introduced several new scale designs in 2009 that more specifically meet the needs of these new markets. It introduced the new industrial shipping scale, the US-BIG SHIP, to fill the gap for small Internet businesses that require a shipping scale that is not only accurate but also inexpensive. The US-BIG SHIP weighs shipments up to 400 lbs, with an accuracy of 0.1 lb. The scale also has a 14″x16″ platform and a new patented way of calibration called AnyCal. AnyCal allows a user to place any weight on the platform and calibrate the scale, saving the user from having to use a calibration service, or have several expensive calibration weights.
In 2009, Awesome Wholesale began including Spanish instruction manuals with all of its scales. This has allowed it to break into the growing Latino market. Said Robertson, “The economic environment which we are currently in, demands that we change and grow with it, or risk being left behind. 2008 taught all of us an important lesson; there is no such thing as the status quo in business. Marketing now consists of designing a product that fits a specific segment of the population. We focus exclusively on the needs of each market that we enter.”
In 2010, Awesome Wholesale will enter several new markets that had in the past been the exclusive territories of larger, older companies. It has built its brand to include a wide range of digital scales, from the small pocket balances, to table top counting scales, to large industrial scales. It has the advantage of being completely involved in every step of the production process. The company designs all of its products in-house, builds the prototypes and then works directly with its factory to ensure success of the final product. “I come to work every morning excited to know that today is a new day, a new opportunity to take our business to the next level,” said Robertson. “The most important thing to remember in a challenging economy is to focus internally, and to build upon what makes your company unique. This is the challenge for every small business: you must find or create your niche market in order to succeed and grow in 2010.”
Joel Orr, owner of Continental Wholesale LLC, Hampton, IA, is highly optimistic about 2010 business prospects, and expects to see a good increase in volume. “The last quarter of 2009 has gone extremely well for us,” he explained. “During this time of tremendous unemployment, what we have noticed is that a lot of people are going into business for themselves. A lot of people are saying, ‘Hey, I lost my job and my unemployment is running out. I have always wanted to own my own business, so now I am going to do it’.”
Orr agreed that what will help the recovery is an improved jobs outlook. But barring that, people are simply being proactive in creating jobs for themselves by starting new businesses. “I see it as a good sign. The economic recovery will ultimately depend on the small business person. The small business person will grow the economy, and that, ultimately, is where jobs will be created. “Being in the Midwest, we are usually the last to go into a recession and the last to come out of it. This recession did not hit us nearly as hard as it hit other sections of the country. We rely on farmers in this area, and they are having a pretty good year with decent crops and decent crop prices, so that does help us a great deal here in the Midwest.”
“We had an extremely good year in 2009 and are well ahead of our 2008 totals. For 2010, we are very optimistic.” That’s the way Ron Messer, owner, Grey Eagle Trader, Inc., summed up business prospects. “We will naturally add new items to our line. We actually add new items every week and we will keep doing that. I do not know of any new markets we will go after. One of the big markets we do go after is dropshipping. We are a very good dropship company, and currently we carry just over 3,000 items.”
Dropshipping is a growing part of the market for Grey Eagle because it allows people to get into business and sell items like they are a big company, without owning anything. One of its customers has a huge website but it does not stock anything. That company dropships everything. It is a big business. There are websites out there that will list all of Grey Eagle’s merchandise. Messer likes the idea of people being able to get into business at a very low cost and make it big, just the way he did: “I took $200 and turned it into a million dollar business in pretty short order. I had two little shelves of knives that I sold on eBay, and now I have a 7,000 square foot warehouse. I don’t sell on eBay anymore because it would compete with my customers. This is a wide open market, and there is always new stuff coming in.”
Grey Eagle Trader sells knives and swords, Native American items, and survival gear, which is particularly big now. Its LED flashlights are also a strong market. It handles air guns and now has a good line of crossbows for hunting and play. “There are people out there with money who are willing to spend it,” Messer contended. “One thing that has helped us is that we are continually growing. I don’t think anyone in the industry actually carries more items than we do. We carry a huge line because I buy from several different sources, so we have a little bit of everything from everywhere.” Messer cites pocket knives as one example. If buyers check out Grey Eagle’s spring-assist pocket knives, they will discover over 300 styles for that subcategory alone.
A growing area for Grey Eagle is stun guns and other self protection devices. The firm has quite a few different models, and they move quickly. Another big item is rescue knives. Rescue knives are pocket knives with a built-in seatbelt cutter and window break on them. Messer urged everyone to have one in his or her car. In fact, when he deals with a uniformed police officer, he gives them a rescue knife for free.
Dan Mottsman, owner, Western Express, Inc. in Bridgeville, PA, is optimistic about the upcoming year. Like others interviewed, he said that the weak economy and the economic contraction has made his firm more disciplined. “We are going to come out with new products. The Internet really helps us, because we can test new products on it, rather than putting products in a print catalog. We are optimistic that things will be improving in 2010.”
Mottsman said that people are buying more. His company had a terrific October 2009, and he attributes that to work the firm has done to get a higher ranking by more of the search engines on the Internet, to bring shoppers to his website. “Magazine advertising has done well for us also,” he added. “Trade shows are less of a factor than they were. We are relying less on them, because of the money and time spent at trade shows doesn’t seem to have the return that the Internet and magazine advertising have. In our advertising, we try to mention the Internet and our website as much as possible.”
Western Express tends to avoid trendy merchandise, and sticks with long term sellers. It has established itself in a great niche market. “By staying with our western theme, it works for us. So we tend to be long term in our outlook with things that sell.”
Wayne Peckham, owner, A & W Surplus, Fresno, CA, is growing his business through online auctions and is quite enthusiastic about the prospects for 2010. “We are growing online, and the ability to go to an auction live, online, is beneficial to a lot of people. The great thing about online auctions is that you bid in real time, just as though you were here. Ever since we have run online auctions, our business has continued to grow; not really fast, but consistently, month in and month out. What is helping our business is the bad economic times. People look for other ways to make money than just a job. So whether it is selling on eBay, doing yard sales or other ways, they come to people like me and other surplus sellers, so it is a good time for our types of business.”
According to Peckham, the strongest area of the auctions business is electronics. Not just GPSs or digital cameras, but all electronics. “Whether it is a digital camera, camcorder, or GPS system, people sell them on eBay. People can buy a product from me for $100 and make a sale on eBay for $150. They can make quick money, and the end users can get it cheaper. If the end user can get a digital camera worth $200 or $250 for $150, that benefits them too.”
The following were interviewed for this article:
Wayne Peckham, Owner
A & W Surplus
3330 N Duke Ave.
Fresno, CA 93727-7803
Roy William Robertson, Importing/Marketing Director
1098 East Beckes Lane
Beckes Industrial Park
Vincennes, IN 47591
Toll Free: 888-293-7661
Joel Orr, Owner
Continental Wholesale LLC
15 5th Ave. S.E.
Hampton, IA 50441
Toll Free: 1-800-869-7203
Ron Messer, Owner
Grey Eagle Trader, Inc
319 Garlington Road, Suite A-4
Greenville, SC 29615
Lisa Sperow, Company Founder and President
5400 West WT Harris Blvd., Suite R
Charlotte, NC 28269
Toll Free: 866-795-7990 (Option 1 for sales)
Western Express, Inc.
300 Villani Dr.
Bridgeville, PA 15017
Toll Free: 800-245-1380