Small catalogs, big decisions

Dan Vaccaro is president of Printers Shopper, a Chula Vista, CA-based catalog of tools for the printing and desktop publishing industry. Annual sales, less than $5 million; annual circulation, 250,000.

My best decision was to buy out all the company’s partners 18 months ago and bring my wife in as a partner.I had been working for the company for a while, and I decided that I wanted to have more control of the business. The only real way to achieve that was by acquiring the business outright.

It was the best thing I could have done, because it put complete control in our hands. When you have a good marriage, whom can you trust more than your spouse? My wife and I have been married 25 years, and we think and act alike. My wife is excellent with the inside organization of the business, and my strength is in outside sales.

So far, it has worked well. When we first became business partners, we drew up guidelines to establish what our responsibilities would be. Because we each know those guidelines, there is a balance to what we do. We respect each other’s area of responsibility, and we each understand where the other is coming from.

Amy Hicks is vice president/ director of operations for Virginia Co., a Warrenton, VA-based cataloger/retailer of locally made furniture, jewelry, and home accessories. Annual catalog sales, less than $10 million; annual circulation, 250,000-500,000.

We have two decisions that we consider to be the best that we’ve made for the company. The first is our decision to try national prospecting. We had previously mailed only within Virginia, and we wanted to test our catalog outside the state. We sent about 30% of our last mailing to prospects nationwide. While I can’t disclose the specific numbers, I can say that we had an excellent response rate. National customers seem to have a favorable reaction to Virginia’s products, history, and heritage. The response from national customers also nicely increased the size of our house file.

The other decision that we are really happy with is our product selection and development for the catalog. We’ve tested some of our product in our stores before putting them in our catalog, since we have found that customers’ reactions to products are often the same, regardless of the medium through which they buy. And when we test products at retail, we evaluate more than whether customers buy the new products. We look to see how they handle the items, if they have questions, how they perceive the value, and so on. The in-store testing has been a good indicator of how well an item will do in the catalog.

We’ve also introduced and tested some private-label food products, specifically peanuts. Peanuts are something our customers tend to be finicky about. They know the brands that they like, and they stick with them.

When we tested the private-label line of peanuts, we weren’t sure what to expect, but it has done really well. Customers like our Virginia Co. logo on the label of the peanut containers. And they purchase our private-label peanuts over the well-known brands they are usually loyal to.

Jim Zimmerman is president of Cottura, a Los Angeles-based cataloger/retailer of imported ceramics. Annual catalog sales, $1.5 million; annual circulation, 250,000.

Our best business decision was to not lower our catalog production standards. Some catalogs are decreasing their paper weight and book size to lower overall production costs. We’ve instead chosen to invest in the production, which has made our catalog a keepsake. Our catalog is more like a coffee-table book, and it has an 18-month shelf life. Our customers use it as a reference book, and they place multiple orders from it.

So rather than cut back on production costs, we pulled all of our advertising in 1998. We used to be listed in the Publishers Inquiry and Shop at Home [directories of catalogs], which collected the $5 cost of our catalog in addition to a $2 fee per catalog sold, and we’d advertise in five to 10 consumer magazines a year. Those advertisements can cost anywhere from $2,000 to $6,000 for a 1/6-page ad. And it didn’t always pay off. Once we had only five responses from such an ad. So we pulled our advertising and relied on word of mouth to get our name out there.

In addition to pulling our advertising, we strengthened our alliance with [co-op database] Abacus. Doing these things hasn’t hurt us-quite the contrary. We saved approximately $45,000 on advertising in 1998 without our sales suffering. In fact, our response rate increased from less than 1% to 3%-5%, and our average order size increased to $225 from less than $200. We also rely on our public relations efforts, including a nightly feature on PBS’s Cucina Amore series.

Bruce Green is the director of finance and marketing at Lady Grace Stores, a Malden, MA-based cataloger/retailer of women’s intimate apparel. Annual catalog sales, less than $3 million; annual circulation, 1 million.

Our best business decision was simply to enter the catalog business. Though our store has been open for 60 years, we launched our catalog in 1996, and the catalog business has opened a new avenue of growth for us.

We are a specialty resource. We sell a number of unique products and large sizes that many people do not have access to, even at some of the big department stores. By entering the catalog business, we’ve learned that our customers are out there. We have also had to identify good lists for prospecting so that we can turn prospects into customers-a process that we are constantly fine-tuning.

Most important, the catalog has allowed us to reach customers all over the country. With the catalog, we can get our product to a customer in Wisconsin just as easily as selling to a woman in our New England store.

Cynthia Harriman is the director of new products and communications for Philadelphia-based Computer Expressions, a manufacturer/wholesaler/cataloger of computer accessories such as mousepads, wrist rests, and CD holders. Annual catalog sales, $5 million; annual circulation, 30,000.

Our best decision was to change from making custom-imprinted promotional products for businesses to creating and manufacturing new lines of promotional products, using licensed images, for retailers.

The most important part of the change is that we’ve been able to introduce products and get repeat customers. Before, for example, we would get an order from a company to imprint a certain number of mousepads with the company’s logo. Once the job was done, the company might order another imprinted product from us, but it probably wouldn’t order mousepads again. Now, when we create a mousepad using a licensed image, the retailer that purchases the product from us will order more of the product if it is successful.

Prior to the change, we manufactured products more than we developed them. Now we have real opportunities to have fun with the images we use and to create new products or designs. And the name brands of some of our licensed images get the attention of potential customers, who then hire us to create products for their unlicensed images.

We had to change the catalog creative when we shifted the focus of our business. Before, our catalog had provided minimal information and a few pictures of products we had created for some of our clients. The new book has detailed information about all the services that we offer, as well as more photos of the products we’ve created.

Margaret Quenemoen is CEO of Jagged Edge Mountain Gear, a Telluride, CO-based wholesaler/cataloger/retailer of outerwear. Total annual sales, $2 million; annual circulation, 200,000.

Our best decision was to hire Eric Gilmore, a designer who had worked for retail competitor Eastern Mountain Sports. We used to design all the clothes ourselves before we hired him. Our company was moving forward in every area, and we realized that we could no longer design our product by the seat of our pants. Eric’s work has really brought up the product quality. The clothing is more cutting-edge overall. As a climber, biker, and skier, Eric also understands and uses outdoor apparel and has improved many of our items and created a number of new ones.

Our goal is to keep things affordable for our customers, and Eric understands that. So when he came on board, he reworked our entire product line with that in mind. We didn’t have to raise prices much with the new items. Prior to hiring Eric, our margin was 40%. After incorporating his designs into our line, our margin has increased to about 50%.

Ron Butler is CEO of Three Dog Bakery, a Kansas City, MO-based manufacturer/cataloger of merchandise for dogs. Annual sales, less than $10 million; annual circulation, 100,000.

The best decision we’ve made is to sell cookbooks written and autographed by the Three Dog Bakery’s founders, Dan Dye and Mark Backloff. The first book, Short Tails and Treats, was included in the catalog in 1996 and was our number-one item for a year.

Last year we introduced a second cookbook by Dan and Mark, simply titled The Three Dog Bakery Cookbook. Right now, it’s our number-one seller for the catalog. Our plans are to play off the cookbook’s advantages by bundling it with an apron and cookie cutter, and wrapping it all in a gift box.

What was your best business decision? Nearly all of the small catalogers we talked to this month feel that their best decisions pertained to product development. One cataloger created a successful private-label line, another mailer saw high sales of books authored by the company’s founders, and yet another cataloger hired a designer to revamp the company’s product line. One cataloger even switched its focus from manufacturing customized promotional products to creating product for licensed designs. And while one cataloger says that his best decision was to buy out the company and bring his wife on board as his only partner, another says that simply entering the catalog business was the best decision his company ever made.

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