Discuss the business case studies "A Wholesaler Finds Himself in CompetitionWith Retail Clients"
Based in Miami, Source Outdoor is a five-year-old importer and wholesaler of patio and deck furniture owned by Gerald Shvartsman. From humble beginnings, in which he tried to sell his first containers of goods himself, Mr. Shvartsman, 35, has expanded his one-man start-up to encompass more than 50 employees and sales in 2012 of $7 million.
Although Mr. Shvartsman ships to hotels and resorts beyond his home state, he does the bulk of his business in South Florida, where he strives to deliver exceptional customer service, more in keeping with a small retail shop than a wholesaler.
The Challenge having established five channels of distribution, Mr. Shvartsman found he worrying that he might have to forgo his most profitable channel a direct-to-consumers approach that was starting to offend his wholesale clients.
The Background A Toronto native, Mr. Shvartsman learned his first sales lessons at the age of 7, helping his parents sell jewelry at a Sunday flea market. He was smart, but he struggled in school because of an undiagnosed attention deficit disorder.
Passing on college, he went into business with his older brother in a 36,000-square-foot nightclub with 150 employees. Next, the brothers sold mall advertising on food court tabletops and ran a company that erected walls bearing "Coming Soon" announcements for obscure mall shops under renovation.
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On the lookout for opportunities, Mr. Shvartsman had an aha! Moment when he was went to buy deck furniture for the patio of his family's Miami condo.
"A sectional to seat four or five? Fifteen thousand dollars," he recalled. "Chaise longues? One thousand dollars apiece. I was flabbergasted. I looked in store after store, but I couldn't afford to buy what I like."
Knowing nothing about the furniture industry, Mr. Shvartsman assumed he could jump in at a lower price and win buyers.
"My mother raised me to think there was no such thing as barriers to entry for me," he said.
He disregarded the rumblings of the looming recession, as well as the industry's old-school way of selling to retail stores through representatives. When his first four containers of outdoor furniture arrived from China, Mr. Shvartsman became a one-man sales force. He personally called and visited every furniture retailer in a 60-mile radius.
"I started attacking them," he said. "In a short time, all had some of my furniture in their store or were selling off my catalog, which at the time was terrible."
Then he opened several other South Florida distribution channels. He struck deals with local decorators and designers, and also with condos that needed half a dozen sectionals and dozens of chairs for each ground-level pool. Starting with one enterprising online furniture seller, Mr. Shvartsman also began fulfilling orders taken over the Internet by other businesses. Retail stores and online sellers paid him 60 percent off full price. Decorators, designers and condos got his goods for 50 percent off.
Write a summary of the case study that is about one page. Research and describe at least 3 technologies that could be used to support or enhance the business in the case study.