Thursday, February 23, 2012

To The Mattresses!

"No, no, no! No more! Not this time, consiglieri. No more meetings, no more discussions, no more Sollozzo tricks.  You give them one message:  I want Sollozzo. 
If not, it's all out war: we go to the mattresses."  ~ Sonny Corleone

Big bidness men, when confronted with external marketing problems do what bidness men are trained to do, form a committee and schedule a meeting with telling charts galore, standard deviations, stochastics, demographics, psychographics, slide shows and the key, lunch. The usual results, new sub-committees are formed and all are encouraged to share ideas and recommendations via emails and tweets, and then schedule another lunch. (1)

With wise guys, when divisions within the company arise, wise guys do what all business men do, schedule a meeting - although wise guys call them sit-downs and the only externals might be an abundance of cigar smoke. They cut to the chase and  close ranks for the good of the company - it's never personal, it's business, just good business.  From a sit-down the usual results are that a sub-committee of one is selected and assigned  for that thing, you know, that thing.   No emails, no tweets, just a simple phone call , "You know that thing, it's fixed."(2)

Big corporate bidness has its way of solving problems. Wise guys have another way.  Now let's take a look at how small businesses struggle with externals.  For the heck of it, we will use independent fly shops for demonstration purposes.

The good news is that most fly shops are located fairly close to good fly fishing waters,  therefore the demographics are usually good.  Top notch employees are easy to find - young students are always eager for a few part-time dollars and equipment discounts.  Then there is the retired bidness executive (resume available upon request) whose spouse evicts him daily when As The World Turns is about to come on the television - plus, old timers work cheap.  Other benefits, work is indoors with no real heavy lifting,  location is not such that exorbitant rents must be paid, and the events in Greece shouldn't affect the afternoon hatch.

The difficulties begin with the fact that owning a fly shop is retailing  and with that goes another poor man's parable, "The only thing more overrated than natural childbirth is the joy of owning your own store."(3)  Fly shops open the door each morning with a store full of inventory waiting to be turned. They scratch and claw to provide the best product lines with advance commitments  and spending.   When low in inventory,  a Ford dealer calls Ford and says send me some more Fords.  When low in  products,  a fly shop owner has to make many different calls and here lies the rub - some might say, you know,  that thing - they call to order say, waders from a company that is selling said waders directly to buyers via a website, or maybe to a rod company that is selling the same rod on page 42,  of their fly fishing catalog.   Ten years ago the fly shop owner competed with the other fly shop across the river.  Then that fly shop was gone and the main competition became a 40,000 square foot store, if lucky, fifty miles away - then came eBay, then Amazon,  then a friend he used to share a beer with at the Denver show started catalog sales,  and if those events are not stressful,  more and more these days  a fly shop owner is confronted with coopetition, you know, that thing, go along to get along.    

When is enough, enough? What is the diminution of value?  Is there a strategery? 

I'll tell you what I would do - but first let me confess;

"Bless me Lefty for I have sinned. I have purchased fly fishing equipment on eBay, and yes Amazon too and I have even ordered from a catalog."  ... a gentle voice responds, "Say three Hail Whitlocks and and four Our Gierachs,  go forth and sin no more."  

With that cleansing absolution and no skin in the game, here is a Turnip Truck solution for the fly shop owner: 

Form a equity based cooperative made up of as many independent fly shop owners as possible.
  • Create a brand name - shops can still be the Foggy Bottom Fly Shop, but the brand name must dominate.
  • Create a top to bottom branded rod line, a top to bottom branded reel line, an adult to junior branded wader line, a branded fly line (cough, cough) line and a branded apparel line and ensure that all accessory lines are packaged under the brand name. Huge economies of scale and margins.
  • Create a company brand buyers club - annual fee gets the customer annual discounts - steps so far, branding and pricing to attract and keep customers - the annual buyers club fee will provide marketing seed funds, will bring credit vendors knocking on the door and assure competitive pricing.
  • Create an internet store featuring all of the above - remember this is an equity entity, if an order is placed in Manhattan, profits can still flow to Foggy Bottom.
  • Create a percentage of gross, national advertising program..."who are those guys? - I dunno, but they're gaining on us."
  • Create at each store a youth fly fishing team (patterned after the PGA's First Tee). Empower parents not near a store to create a youth team of their own.
  • Create a Guides Program unequaled in value (guidespeak for almost free gear) plus enlist approved guides as commissioned sales reps.
  • Create a 5% of sales habitat environment contribution in conjunction with TU, BFTT, and Federation chapters.
  • Create a Destination Travel Vendor program to be fed clients via the branded shops and/or the internet.
  • Hire a top of the CEO suit type to herd this operation - low starting pay with generous stock options.
  • Retain the law firm of Dewey, Cheetam and Howe to keep notes on that fair trade thing.
  • Finally, when the marketing coffers are at a surplus, fund a Hollywood movie about fly fishing... I'm kidding, I'm kidding! ... I think.
Having confessed my buying sins,  I want the future  to ensure that when the Turnip Truck drives into Foggy Bottom there will be a first class fly shop waiting there for me ... and my branded buyers club membership.

For each bullet point above there are ten pages of whys, wherefores and how to's, and if I coulda, woulda, shoulda scenarios.  I'm sure many(one can hope) readers will chuckle and say, no way could this happen.  Maybe not, but consider that it may just be time for fly shops to become the squeezor and not the squeezee.  You know, fix that, you know, that thing called coopetition ... level the pool ... smooth out the rapids.

Oh, and those extra ten pages per bullet point - available but it'll  cost a cold beer, some hoppers, and umm,  lunch.  

(1) I used to be a bidnessman - a banker, an investment banker and a small bidness owner.
(2) The only real knowledge I have about wise guys;  I learned from movies and television.
(3) Got this quote from my wife - what do men know, right?

For additional reading, look over to the right - Better Blogs - try the links to Trout Underground and MidCurrent.


  1. I have some questions:

    Are you suggesting that all the indy fly shops essentially become another big ole Orvis, but without the home decor, "lifestyle" clothing, and other non-hook-n-bullet oriented stuff Orvis sells? That's what this looks like in my mind's eye when you say uniform branding of a vertically integrated line of profit-shared fly fishing products, a federated or "parent" corporate structure under a single CEO (and board) with volume based revenue-sharing or buying discounts (penny saved is penny earned), and co-branded networking. Where rubber meets the road at the the owner-operator and consumer...this will look just like an Orvis fly shop.

    What sort of authority structure would you envision for this umbrella company's CEO and board of directors in relation to the shops? Would it be top-down or a loosely federated co-op?

    How do you structure the "buy-in" for indy shops? Most are cash-poor and in debt already, carrying high inventory, leases, vehicle and boat payments, insurance, etc.

    What legal business entity structure do you use to prevent hostile takeover? How do you establish and maintain long-term supply chain security in such a micro-industry? You would have to own that, too. Thus, the vertical integration reference above.

    How do you handle the 2-3 fly shops within a few miles of each other? Do we only want ONE to survive? If so, do we want that to be our neo-Orvis store?

    A wise man in the fly fishing mfg industry said to me in 2003, "Ken, the world needs another line of fly fishing equipment like I need another hole in my head. The key to success in this industry is to be clearly outstanding in quality, customer service, and warranty. Treat your customers like gold and stand behind your products no matter what. The reputation of your brand is all that matters in this industry."

    He was very successful! He was bought out by the largest and most successful company in the history of the fishing industry after launching the brand less than 10 years prior. That wasn't good news to ME, but it was to him. And it makes a good counter-point about surviving...even a fly shop owner in today's business climate.

    1. Ken,

      Great questions! The answers however are longer than the bullet points, and I'm headed out the door for Louisiana ... New Orleans cuisine and Port Sulphur redfish.
      I'll update you upon my return. Thanks for your interest in my wacky idea.


  2. It's great fodder for stimulating fish-talk. Have a good trip!

  3. The other model might be something like the Grass Roots Outdoor alliance I think it could work as a better option than neo orvis sameness. after all we seem to have an abundance of sage/simms/umpqua shops although I here simms is not making any new friends in the industry.....