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Thriving in a Down Market: Re-inventing Yourself

While there are lots of sources on self-reinvention, many lack actual case data, real-world examples of exactly how one might do that. Generalities of "become your own customer" and other catch phrases may sound erudite, but in the end, one has the feeling of a pit in the stomach despite an aesthetically enjoyable, sometimes rather lengthy read.The purpose of this article is to give a real-world example of self-reinvention.

In the Beginning

Russell Rhodes began his career in a swimming pool overlooking the Caribbean. He'd just finished a turn-around stint in his parents' company. It was a 90-year-old, 9MM dry cleaning chain that included 3 production plants, 22 stores, and 11 pick-up and delivery routes. To be brief, the turn-around turned into an asset sale. The dry cleaning chain catered to the high end, with lots of hand-pleated skirts, wedding gowns, and 20-feet-long linen tablecloths. This was no 3-pants-for-$5 dry cleaner. It thrived in the 80s, and whimpered down-scale until it closed in 1997.Back to our story. The asset sale was complete and Russell was on his honeymoon. A man without a job, newly married, enjoying the sun wondering what he was going to do with his life. He asked himself what he'd most like to do, ignoring all barriers, real or imagined. The answer was, "design". The next question was, "What will a million people pay a dollar for, or 100,000 people pay ten thousand dollars for?" Looking at the question, he realized that it would probably be easier to find the million $1 customers than the one hundred thousand $10,000 customers. Not liking the $1 sale, he settled on $10-$15 as the target range, something 95%+ of the populace could afford. To make any money, he realized he'd need to find an existing market that showed sales in high volumes.He started off in ceramics. He knew nothing about ceramics. He bought some paint brushes, some clay and starting painting. He took his work to be fired in a kiln at a local ceramics shop. After a few months of trial and error, he painted a group of table and dinnerware reminiscent of Monet's water lily paintings. He painted some angelic figurines. He painted a family Christmas scene on a 20" plate. All in, he had about 90 pieces he was proud of. He rented a booth at the local wholesale market that catered to retail stores, the kind of neighborhood stores you'd go to if you wanted something of quality that you couldn't find at a Walmart or Hobby Lobby.Since nobody needed any of these products to survive, he realized he was courting discretionary income. He used the wholesale trade market as his research. As the artist he liked everything he'd produced; as a businessman, he wanted to know what the market would buy. He had no inventory, only samples, and he accepted a few thousand dollars worth of orders for the family fireplace plate. He sold some Monet, and a few random pieces, but the trend of sales was firmly focused on that fireplace plate.

Life as a Wholesaler

Russell went to work learning how to make master case molds for pouring ceramic slip. He learned how to dry the clay as "greenware", clean it, paint it, fire it, glaze it, and fire it again. For five years he sold through a growing number of retail outlets. Uninterested in funding large amounts of inventory, each plate was made to order. As the business grew, area artists were hired to help out. After the Christmas season of year 5, there was a clear fork in the road. He either had to hire a Hiring Manager, one well-versed in all the legal requirements of social security, green cards, and other legislation for which he had no time nor interest; or, he had to go to China. In some ways, China bypassed all the headaches, paperwork, and employee challenges brought on by growing a business in the US. He needed the sourcing to be scalable, so he could concentrate on sales, not on how many people weren't going to show up this week to paint plates. With some lament, he closed the ceramics shop. Life would now not be the same.

Life as an Importer

Russell used the internet to find a Trade Group in Taiwan that owned a factory in China. He's spoken with importers in the gift industry and everyone was tight lipped. Nobody wanted to tell which factories did their work. Chinese factories produce at different quality standards, depending upon the demand of the market. He knew he was going to have to find a very special factory - stray paint lines just wouldn't do for a Christmas plate that retailed around $250.00.The first factory did a horrible job. They wouldn't allow him on the production floor to teach the personnel how the plate was to be done. They simply announced one day that the production was done, and that he could pay and leave. They'd violated the agreement that he would inspect every plate. When they declined inspection, he did leave, but not with any of those plates. In the end, after several bad production relationships, he found a great factory and the containers came over the ocean loaded with beautiful work. The challenge now was sales. In 2001, the Trade Center bombing marked the beginning of what would become the down-slide of the high-end of the gift market. For several years, Russell remarked that he'd lose 10% of his clients but add 30% in revenue from new clients. Then lose 15% and add only 20%. The trend was obvious. He knew he'd be out of business within 2-3 years.

Life as a Retailer

So, he threw up a website, no marketing, no anything. Just bought the url and put up a cheap shopping cart site. About this same time, a client backed out legally but contrary to verbal promise, of a $25,000 wholesale order of personalized ornaments. Stuck with the ornaments, he put them on the website. The first year, the website grossed $11,000. The site literally could not be found unless you typed Russell Rhodes into google. You had to be looking for it. The next year, he added ornaments from another artist, grossed around $35K, and the wholesale business tanked to half its usual income. It was clear that the retail website was the next sales channel. By year 3, the gross was well into the 6 figures, and the wholesale business tanked by 2009.

Life as an Importer - Retailer

Today, Russell still designs ornaments. They're made overseas by wonderful people who produce to his quality standard. Christmas Ornaments also represents the work of 47 other ornament designers from which he buys wholesale and sells at retail. Business-wise, he's come full circle back to what he wanted to do in the beginning -- design -- but now has the business structure to support a full company. One of the lessons here is flexibility. He followed his primary passion through changing market demands, following the flow of sales. The products varied by material, but the product theme matched the Christmas market demand. The interesting thing here is the re-invention by sales channel.




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