Small World

May 1, 2007 12:00 PM , BY BETH Negus VIVEIROS

What does it take for a small cataloger to stand up to the likes of Pottery Barn Kids, Harry & David or Barnes & Noble? Start-up capital, guts, and a willingness to ride the waves of trial and error.

We recently talked to the folks at three catalogs in the David position to those Goliaths: KooKoo Bear Kids, Ruma's Fruit & Gift Basket World, and Firefighters Bookstore. They shared their perspectives on the joys and road bumps of operating a small catalog.

CHALLENGES

Roswell, GA-based KooKoo Bear Kids, which mailed its first catalog in July 2003, found a niche in marketing high-end children's furniture, bedding and gifts, says CEO Joe Mediate. The target customer is a style-conscious mom who might not blink at spending $30,000 to decorate her child's bedroom.

To be a contender in that space, a company needs to have product that sets it apart from mall stores and big-box retailers. This means sourcing goods from a variety of small vendors, who are more accustomed to working with little boutiques.

“For a vendor, we're a great place for them to sell to, because we give them a national presence,” Mediate says. “But many of these small vendors are used to dealing with retail stores, and they know how to sell to them. There's no real planning — they bring an item into the store and it gets sold. For us, there's a lot of planning. There's 90 days before it gets into the catalog. Some can't keep their delivery schedules and that's not good for us.”

Firefighters Bookstore was launched in 1983, as a last-ditch effort by owner Peggy Glenn to make a living in the publishing industry. She used her last $55 to print up a flier offering 25 titles for firefighting professionals. By 1986, the Huntington Beach, CA-based company had moved up to producing a 16-page catalog. Today the catalog is distributed via CD-ROM in a PDF format, and offers more than 3,000 titles.

Glenn's major woe is aggressive direct marketing and discount programs by the publishers themselves. In some cases, publishers give the same reduction to the fire departments and call it a training-site discount at lower quantities than are necessary for Glenn to obtain the same incentive. “And that's predatory,” Glenn says. “In fire services, that doesn't happen anywhere except the book segment.”
Ruma's Fruit & Gift Basket World has its roots in a wholesale produce company started in 1900 by president Jim Ruma's grandfather. “We used to sell to hotels, restaurants, colleges and other institutions, and did some foreign exports to Bermuda and Iceland.”

In the late 1990s, the Everett, MA-based company sold off the wholesale business to concentrate on its fruit and gift basket operation. The first catalog was mailed about 10 years ago.

Current catalog circulation is about 180,000, mostly mailed in the fourth quarter. Ruma estimates that about 95% of the books go to business-to-business customers and prospects; only existing customers receive business-to-consumer copies.

The biggest test Ruma's faces is one all B-to-B catalogers run up against constantly: finding new prospects. “We're trying to get more customers and more sales, either by the catalog or the Web site.”

MAIL PLANS

Not surprisingly, the looming postal rate increases are prompting Ruma's to consider different paper weights and lower page counts.

Mediate says he doesn't see the hikes leading KooKoo Bear to cut its annual circulation, now in the 2 million to 2.5 million range.

“We're going to mail smarter, make sure we co-mail on each drop, shop our paper, printing and prepress work, and take some of the weight out of the book,” he adds.

Glenn says the higher postal costs won't force her to change her mailing plan, because, well…she doesn't have one. “I know that's sacrilege to some in this business,” she says.

But that's not to say she doesn't strategize. The economies of witching the catalog to a CD-ROM format two years ago (the CDs are burned in-house) allowed Glenn to greatly increase her prospecting efforts. Rather than mail to the entire customer base on a regular schedule, it makes more sense for her to selectively test different segments of her list. She also distributes many catalogs at industry events, such as training seminars.

OUT OF THE BOX

Not having 1,000 retail stores or the budget for a national television campaign to promote business makes creative thinking essential for small catalogers.

Firefighters Bookstore relies heavily on what Glenn calls the firefighters' “grapevine” to get the word out about her catalog. She puts extra CDs into every shipment for customers to pass on to colleagues. Whenever she travels, she schedules appointments to meet with fire companies to help them update their station libraries.

“The grapevine is the No. 1 marketing vehicle I have,” she says. “I value it, and I don't discount it for a minute.”

KooKoo Bear Kids plans to triple the size of its one existing retail location in Georgia, and plans to slowly open other retail stores in strategic spots around the country. But for now, the Internet plays a large role in the brand's promotion.

KooKoo Bear Kids' Web site hosts a blog where Mediate says the company connects with consumers. There, updates are posted about new products and promotions, such as a sweepstakes tie-in with the Nickelodeon movie “Are We Done Yet?” The winner receives a $2,000 gift certificate for a room makeover.

The site has a number of celebrity customers, Mediate says. While dropping names would be a sure way to get attention, he would never infringe on the stars' privacy. “We don't want to kiss and tell,” he laughs.