Small Business Alliances?

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Emibub

Emibub

PFG, Picture Framing God
Joined
Nov 2, 2001
Posts
9,246
Loc
Centennial, CO, USA
Since we are all so concerned about the big box stores buying power I am curious if anybody has considered forming an alliance of small frameshops. I won't pretend to understand how that works, but it seems if you team up you have more buying power. I think small shops still are the dominant force in the framing industry. Seems to me we could demand better prices. I'm sure this has already been discussed, I'm new so I'm just curious.

Kathy
Out on a Whim Custom Framing
 
This may be like tossing out a grenade, . . . but, . . . have you hear about the PPFA. It is an organization of framers.

Now if you think PPFA is not what you describe, you may be correct. I want PPFA to be more of wht you deascribe. Imagine the Professional replaced by the word Independent. The mechanisim is structure is there. Be a member, and effect change within the org. Be an agent of change. Overthrow the status quo. Make PPFA the kick-ass org you are looking for.
 
Marc:

that's exactly what the "new" PPFA is trying to do in my opinion.

We had a PPFA -sponsored regional meeting here n Knoxville Mon nite with Vivian Kistler and Brian Wolf. There ere about 35 people present from eastern Tennessee. After the meeting I, as VP of the KY/TN chapter, suggested we get together in a few months to discuss common issues/problems.

Later, it was decided that we get these people to meet at their local levels--like Knoxville folk meet, Chattanooga folk meet, etc--and discuss their "neighborhood" type issues.

So, this meeting served as a catalyst to get us all together and get some new PPFA members. Now down the road, we're holding "townhall"type meetings to be sure the local flavor and commonality stays there and we address issues that affect us all locally.
 
Alliances of framers take many forms. I guess many small, ongoing or single-occasion alliances exist at any given time.

Example of a single-occasion alliance: Via the Hitchhikers forum, I once organized a buy of Mylar-D for 43 framers from all over the country. Each of us saved about 60% ($45.00) off the price we would have otherwise paid per roll. (I spent roughly 30 hours doing it, and everyone said "thanks, Jim", but nobody offered to send me extra money.)

Example of an ongoing alliance: Other framers across town and I have been talking about group advertising in local print and radio media. It hasn't materialized yet, but there's a strong possibility that it will. Such alliances are working in other locales.

New opportunity? Right now I'm thinking about organizing a buy of polyflute (generic term for Coroplast). That's the product some of us like to use instead of foam center board -- it has better structural integrity, is chemically cleaner (suitable for maximum preservation), easier to cut and handle, and always less expensive than foam center board. However, it has a wavy surface, so it can't be used for direct mounting. And most of us can't find it locally at a decent price.

One manufacturer has offered a price of $4.50 per sheet, including freight to one destination, for opaque white, 48"x96"x4mm if we buy 250 sheets (one pallet). That's 14 cents per square foot, friends. If you pay $2.50 for a sheet of 32"x40"x3/16" foam center board, it's a savings of about half -- and it's a better framing board!

If 5 of us each took 50 sheets, the investment would be $225.00, plus transportation from the central shipping point (my shop?) Anybody want
in?

PPFA is potentially the ultimate alliance for framers. Too bad so many framers don't realize it.
 
I am a member of PPFA. I obviously understand they are an alliance of Framers. What i am talking about is to form a group big enough to bring us the purchasing power of the bigger companies.
I have just opened my frameshop. I've been doing a lot of reading and observing things said right here. Everybody is so concerned about the big box stores. There are many concerns about companies like Larson who buy out their competition. I've read more than once that Larson is cutting out the little guy more and more. I am just using Larson as an example. I've dealt with them for 15 years and have nothing but good experiences with them.

So many frameshops are considered "Mom and Pop" establishments. My concern is being cannibalized by the bigger companies. There used to be mom and pop video stores. I can't think of one around here that doesn't say Blockbuster on it now. Does anybody still have a mom and pop hardware store they frequent anymore? I actually was reading an article about hardware stores and they refered to TruValue and Ace as the "Little Guys". A few years ago here in Denver there were 4 big box hardware stores in one big intersection. Well now there are 2. Builders Square is gone, Home Base has folded. Lowes bought Eagle. Now sooner or later Lowes or Home Depot falls. Michaels has done the same thing. They have no competition left, they don't have to care. A few years ago bagels were huge here in Denver. We had so many mom and pop bagel shops. Einstein Brothers came along and ran all of them off. I actually knew one person who owned 9 locations. He was told he could keep one of them. He was forced to sell the others or to lose everything.

It seems to me that we are sitting ducks ourselves. I would think that some sort of alliance would give us more leverage. I do realize we are doing more than selling bagels. But I wonder how far good service and quality work will get you when the public is constantly inundated with some sort of perceived value.

I've always gone against the norm. I seek out different because I don't want to be like everybody else. But I do shop at Home Depot, I can't afford to pay extra to the little guys. I have eaten Einstein bagels. To this day I don't have a Blockbuster movie rental card, something's just aren't right no matter what.

It seems to me that a big group of framers would qualify for some sort of group health insurance. I know many people who are losing their health insurance because the companies they work for don't have enough people. For the first time in my life I don't have health care. I can't afford it yet. I have decided to go without right now. There is something seriously wrong when little companies can't thrive. The big companies get all the breaks.

What the heck do I know, I have only had my shop for 4 months. Any one of you guys are better informed and more knowledgeable than I am. Just food for thought.

Kathy
Out on a Whim Custom Framing
 
To me the biggest problem that we face is on our supplier end and the nature of the products we provide. We offer hundreds of different mats and the same number of frames. Sure group buying power helps with items like foam core or coroplast, but who here is ready to stock 50 sheets of any given colour mat or even 50 feet of any given moulding to save a couple of bucks per sheet or foot. I would even doubt that the "big guys" would do the same.

I agree that any aliance of small business that get together to advertise their collective service and bring awareness to the piblic is a good thing. To get together on a forum like this also provides us with a place to "grumble" and to find valuable information, but other than these issue, I can't see how any aliance will prevent us from being as competitive as we can...to beat the "big boys" and to survive as an industry.
 
Not that I would be likely to benefit from a US program in Ireland, could the PPFA get an extra discount or better payment terms for their members, if they can do it for insurances and healthcare surely the could do it for framing supplies, now that would really show they are supporting their members after all any good broker or business association will get you a discount on your insurances in fact if you shop around yourself you can improve your insurance package without to much trouble, I think a buyers program would be a super added value service which the PPFA could organise and it would enhance their service to members.
 
An alliance doesn't need to correlate with multiple or large combined purchases.

We are a member of Merchant Shippers. By paying a one time entry fee (I think it was $150 or so) we are guranteed 50 - 55% off published rates for several freight carriers. Normally, because of our volume, we would only qualify for around 30-35% off.

Of course, there is no advantage to a vendor who already has a customer to give them a bigger discount for nothing, but to gain new customers it may be worth it. A sale at 5% profit is better than no sale at all.

FWIW

<dnw>
smiley.gif
 
Kathy,

You're off to a great start......as a member of PPFA, you are eligible to participate on the <u>PPFA Online Exchange</u> as well as this forum.....sounds like you've been digging through the archives. In doing so, I hope you've garnished a couple of "keys of success"!
  • Don't worry about the big guys (big boxes) gobbling up the little guys.....create your own identity and move on! Customers will come to you for many reasons....(you already know this after 15 years experience!)
  • Small increases in your retail pricing has a GREATER impact on your profit margins than the same amount of decrease in your buying costs! Jim Miller already exampled the futility of "joint buying power" in his posting. Simply buy smart, learn to use inventory properly (Stock items that turn!)
  • Get a good accountant that prepares your information in a timely manner, AND can assist you in interrpreting that data. Look at the Cost of Goods and Net profit......AT LEAST EVERY 3 MONTHS! Not making any money? Decrease overhead, and/or raise your prices.
  • DEMAND better prices from your vendors, by limiting the number you buy from......You become more of a customer to them, and receive the "perks" associated with a relationship.

As to "Alliances", I'd take Art Lady's suggestion, and examine <u>FramerSelect</u> At 130+ members and growing, it's NOT just a dot.com site. It's really a marketing and branding "Alliance".

John
 
John Ranes is so correct. It's not the big that beat out the small. It's the smart that beats outs the not so smart; the fast out do the slow. It's as old as time itself.

You don't get beat by being outframed, you get beat by being outretailed. And I don't mean by the big boxes, I mean by every other merchant that does a better job at taking the same dollars you compete for.

We're fortunate in that we have been pretty successful. It's not because we cut a v-groove any better, or design any better. The truth is we are all about the same. I know, I know your customers love you because of you superior attention to detail and unparalled design. But almost every guy up and down the street thinks the same thing. But if you truly are that great, why do 80% do less than $250k annually. It ain't the big boys keeping you down at that level. And all the buying alliances in the world won't change that. If you want to ally yourself with a group, take John's advice and look at FramerSelect. Align yourself with people that are really successful. People like Marc Bluestone, Jay Goltz, Rob Markoff. People that have taken their business to a higher level. And as a throw in you get guys like John Ranes and Derek Vandenburg-skilled technicians. And many more. These are the people that will help teach you how to do business. We assume you already know how to frame, and how far has that got you?

Railing against big boxes and boycotting vendors might make you feel good, but it won't do any good. And if it doesn't do good, why bother. Focus on the things that can truly make a difference.

Alliance? That's a no brainer. Align with people that are better at what they do than you do. Learn from association. It might be PPFA, it might be FramerSelect (we belong to both). But it probably isn't going to get better until you do something to get better. And the first thing, like Mr Guthrie suggested, is to do a personal inventory.
 
<blockquote>quote:</font><hr>Originally posted by Bob Carter:
Align with people that are better at what they do than you do.<hr></blockquote>

Sounds like the SCUBA diving rules I used to teach:

  • It isn't the sharks that'll kill ya. Usually it's your own mistakes.
  • Never dive alone.
  • Always pick a diving buddy who's a better diver than you are.
 
Well Bob, you make some fine points and I have always believed in and strived for excellance in my work. But, I gotta wonder if you have a realistic viewpoint of the overall economy of this country?

I am living in an area where the unemployment rate is currently 10.6% and has been above 8% for the past 2 years. We don't have any large metropolitan concentrations anywhere near us let alone be graced with the option to live in a large metro complex.

Now that just might be a contributing factor to that 80% under $250,000/year figure. The fact that we have a much smaller ratio of people who are even educated about or interested in the fine arts may be another factor.

We have to draw our business from many miles further away from our shop than a metro based shop. I have regular repeat customers from St. Louis, MO, 90 miles to the west, Chicago 250 miles to the north and Indianapolis, 145 miles to the east and the majority of my local data base comes from a 40 mile RADIUS around my town. I work damned hard to keep these clients on my active list because each one of them means much more to my overall annual gross income than a comparable client means to a metro based shop where drop in traffic may be 25-50 people per day. I am thankful to see some of these customers once every 6 or 8 months! I am wondering how many other framers out there are in the same position as I and too embarrassed to admit that they are hacking away, on a daily basis, a meager income to keep food on the table and kids in school. It is disheartening sometimes to read about the $10,000 corporate jobs that are talked about by some framers as "just another day at the mill". I would love to be in an area where I could simply BID on a job like that just to say to my fellow local framers, "Hey, I put a bid in on that one!" I wouldn't mind if I were "beat out" on a bid like that if it was based on competency and I at least got a chance to "get up to bat". If I got outbid then I must do better next time.

Don't get me wrong, I absolutely LOVE what I do. I quit a very good paying college teaching job with all the security of tenure, retirement, etc. to venture out on my own with no guarantees other than the fact that I would be forming my own destiny and choosing how I succeed or fail. And I am working on a solution to all of these problems I cited earlier. But, I wonder if some of you, in your postings of stick-toitiveness and make it happen attitudes, stop to consider that there areas in this country where the raw materials that make up a customer database are simply not there. It has nothing to do with competence or advertising or treating your customer gratiously. I don't know of ANY marketing strategy ANYWHERE that condones being rude to customers or forget advertising as a method of getting the word out. What I am saying is that some areas just don't have the population to produce those numbers of customers that are normal fare for the metro shops.

I am a happy framer and I wait for the day when I can move on and become a happy bill free framer. But it ain't gonna happen in Southern Illinois.

Framerguy
 
I’m convinced and you guys are right, the suggestion about the PPFA was just a suggestion I did not really think it had legs, I think my brain went a bit soft early today, I do accept the argument on retailing or a very good sales program the one question I keep asking myself is where the split for a framing shop comes, between retailing and the manufacturing part of the business or can it really be separated or should it be separated, my own feelings are that it should be separated though my thoughts are not greatly formulated on this yet.

The cost of materials for framing is so low that the discounts that the Big Box guys get is of very little significant, what you need to watch is labour and overheads and the lack of a sales program, the one thing that does cause me concern are the annual price increases which are generally above inflation or that what is happening in this part of the world, I have no problem with needed price increases.

The more I read about the Big Box guys I think I would love a few of them in Ireland, I think it could shake things up quite bit over here.

Just yesterday I happened to meet up with a few other framers and one of the suppliers, we happened to go to the same coffee house it was not a planed meeting, as the conversation went around we realised that Dublin a city of one million+ people heading for 1.5 million and now one of the wealthiest cities in Europe and about # 10 in the world has NO FRAMER in any of the main high streets, there are few galleries (all in second street locations) who will have framing done for clients, all the other framers are home based or in third street or back lane/industrial locations.

The supplier pointed out that in Ireland and the UK 75%+ of framers are home based, I had thought this figure was only about 50%, the one question I over looked to ask was how much of the business the 75% have, I will follow that up, I suspect that quite a big slice of the framing business is going to the home based framers and that the business is very profitable, I saw examples of what was being achieved when I had the glass supply business.

There is an opportunity in Dublin for someone to go high street, regretfully it won’t be me I just would not have the management skills or retail background to take on such a big venture, unfortunately Jean who has the required skills is not that turned on by framing the big international corporate world attracts her more, my main business background was in distribution/sales of test and laboratory equipment prior to my career change to framing, if there are any takers for Dublin I would be only to happy to give my input on what I know of the business in Ireland/Dublin.......now if I had only come to framing twenty years ago.
 
I am going to check out Framerselect. I haven't been able to determine if there is a local chapter of the PPFA here in Denver. There used to be 7 years ago before I started framing in the big black void. I am so out of touch with anything new. I am thrilled to death to have access to any one of you. I plan on using this forum and the Hitchhikers to my advantage. I plan on picking everybodies brain. I have so much to learn about business. I can frame til the cows come home but I simply don't have a grip on the financial and business end of all this. If you people knew my financial condition you would choke. **** , just thinking about it makes me choke. Look for my next thread in the coming days, "Help, I'm Drowning". Thanks for all your input.

Kathy
Out on a Whim Custom Framing
 
Kathy,

You are correct, in that the Colorado area has had a history of an active PPFA Chapter, but the Rocky Moutain Chapter has been gone for a number of years. Last June however, PPFA held it's Chapter Leaders Conference out at the Denver Airport Marriott. In conjunction a meeting and program was held on Sunday night, 24 June to restimulate a chapter in the area
..........About 20 framers attended including Verlys Crocett (Colorado Moulding) who rejoined PPFA.

With the PMA Merger on the horizon, I'm not sure if this "new group" got things going or not, but you're involvement would probably help. I would recommend contacting Kerry Wilson at Windrushgallery@aol.com for further information. Kerry is a retailer from Fairfax, VA and is chairperson of the Chapter Relations Committee. (Tel 703-385-4888)

Regards,

John
 
John, Thanks for the info. I just might become involved in a local chapter. I liked attending meetings before. Since my little venture here, I have met a couple of framers who have been more than helpful. i don't think they are members though. I'll have to find out why. I still think some sort of official alliance of all of us little guys has merit, not just for buying power. I think Jim mentioned advertising with his local framers. What a great idea. We are not competitors, we do need to get our info out there. I think we are sitting here and letting the big boys steal our thunder. Of course i have to get this place up and running first so i have some thunder to steal.

Kathy
Out on a Whim custom Framing
 
I teach basic framing classes in Denver on a regular basis and there are lots of framers in the area now who would like a local chapter. Laura Covey at PMA or as John suggested, Kerry can give you lots of info on getting a chapter going.

In San Diego, I was one of three frame shops buying together on a regular basis. It lowered my COG a lot. I bought from one company, one shop bought from another and the third bought from another. We regularly picked up from each other and kept track of paying the company we were in charge of and billing the other two people. We qualified for all of the best discounts from everyone. Some companies would even deliver to us individually, some would not.

I talked the other two shops into branching out into gifts, which they did very successfully, and we bought those together. A gift show can suck up $5,000 real fast, but with three shops spending $5,000 each, we could really increase what and how much of what we carried. If something didn't sell at my shop, it might at one of the others.

We were going to advertise together, place one ad with the three shop names and locations under the ad, but one of the shops was within a mile of me so it would not work as well. If she had been further away, advertising together would have worked very well.

We met through our association at PPFA meetings. We got to know each other, trust each other and managed to save a lot of money over the years we worked together besides being very good friends and all that intails.

Nona powers, CPF, GCF
www.nonapowers.com
 
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