Thursday, November 12, 2009
Speedboats and Freighters
During the course of my business career, I previously co-founded a company which became a fairly large national company before opening E.E. Robbins, a relatively small company.
The company I co-founded, Robbins Bros., became the world’s biggest Engagement Ring Store chain with stores around the country. Along the way, I learned that both big and small companies each have their advantages. However, for me there is no question which I prefer being a part of.
I knew when I first founded E.E. Robbins that I would have no desire whatsoever to expand outside of Western Washington. We are that rare company that has no desire to become a national chain. I like knowing all of our associates and being able to visit each of our stores in a single day’s time. I learned that I not only like the flexibility of being able to make changes quickly; I have found it essential to my impatience as an entrepreneur. In times like these, where technology seems to be moving at the speed of light, it definitely helps to be able to make changes within days or weeks rather than months or years.
I liken owning a small company to being at the steering wheel of a speed boat zipping along at 40 mph versus being in a humongous sized freighter moving at a snail’s pace. In the speedboat, we say, “hey, let’s go that way” and all it takes is a sharp turn of the wheel and we’re instantly on our way in a whole different direction.
Whereas on the freighter, the Captain issues the order to change directions and the order goes down the rank from one station to another until many moments later, the big ship turns a barely noticeable ten degrees. By the way, isn’t that why the Titanic hit an iceberg and sunk?
One major example of rapid changes that we at E.E. Robbins have made is in our product lines. Over the past year or so, we have almost completely revamped our merchandising model. We have gone from carrying mostly high end national brand Designer lines that sold well in the pre-recession “gravy” years to designing and manufacturing the majority of our rings.
Why did we make this change? Mostly because our customers voted for it by wanting more value. Most national Designers lines do a huge amount of national advertising in order to promote their brand to the public and have their brand name known. The more advertising they do, the more they have to charge for their product. So these Designer rings often end up costing anywhere from twenty to fifty percent more than they would if we manufactured these same rings ourselves. The more well known a Designer line is, chances are the more it costs.
In times like this, most people refuse to pay more for a product than is necessary, and rightly so. Therefore we decided to cut out the middleman mark-up and design and manufacture many, if not most of our own rings. We still very much value our relationship with some of our smaller boutique Designers who still offer both exclusivity as well as competitive pricing. However, we no longer wanted to be associated with the huge national designers that believe that the prestige of their brand entitles them to charge excessive prices for their rings.
In addition, we wanted to take advantage of one of our greatest strengths, which is our own creativity and the understanding of what our engagement and wedding ring customers want. A national Designer or manufacture has to design styles that work in every city and state in the country, thus many compromises in styling have to be made. While we as a local family owned company can design and manufacture for our own Western Washington customers.
Not only has it been a blast designing and manufacturing these unique rings, our customers very much appreciate both the exclusive styling of our rings and the better values that we can now offer. As a small company, we have been able to respond at lightning speed to this new economy. Were we a big chain, this transition may have taken many years. The end result is lower prices for our customers, faster delivery and a much more exclusive product. Not to mention that we have more control over the product since we handle these rings from their inception to their final creation.
There are numerous changes that we have made just this past year alone and in every facet of our business. We have been able to make these changes quickly because we aren’t some huge company that has to first work everything out in endless and lengthy committee meetings or have changes approved by a Board of Directors before moving forward at a snail’s pace. Being a small local company, I can and do personally answer customer e-mails or address a problem within hours of hearing about it so that our clients can receive the most responsive and attentive service possible. If you’re still not convinced, try reaching the CEO of one of our national competitors either on the phone or by e-mail and then send me an e-mail at emerson@eerobbins.com. You’ll very quickly see the difference for yourself.
There are so many advantages to being small. While it’s true I’ll never have the coin of a Howard Schultz or Warren Buffett owning a small company, that suits me just fine. Maybe you’ll agree that being at the wheel of the nimble speedboat versus trying to captain a huge lumbering ship definitely has its advantages.
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