I want to move or jump my story up until 2007.
The company was blasting, absolutely killing it! We had a great, loyal base business of local shops, small chains, respectable hotels, caterer's, distributor's and the like. A good stable business. We were making money hand over fist, I think our gross margin was running at 63%!! Let's put it this way, there wasn't a lot to worry about.
However there was an elephant in the room, Trader Joe's. Now keep in mind, we started with Trader Joe's as, providing them with one SKU, it was called "Smooth & Mellow" and if you have read any of the blog, it is very much like the old Mister Donut blend(aka Dunkin Donuts Blend) , which is somewhere in this content.
Anyway, Trader Joe's when we first started dealing with them was extremely partner friendly!! amazingly enough, their business model I believe to this day was absolute, genius! They got their supplier's involved, they shared what was working and what wasn't, and more importantly, they expressed what they were looking for! REFRESHING!!! AAAHHH.
They would actually take the time out to call every one of their suppliers, in whatever category we are talking about, mine was coffee obviously, and explain what they were looking for. Then they would ask if you wanted to participate in this new item they were looking at, give you a date to submit, with a detailed description, pricing and the whole nine yards! It was a fantastic business model. Actually one of the best I've seen, because they always got the best product, for the best price for the public, which is after all a retailer's dream right? If anyone says no, please tell me what is better.
Anyway, over the first 3 to 4 years we had several opportunities as did every other supplier to submit their new product, and a panel would assess it and let you know if you won the bid, based on quality and price. It was that simple. Let's just say, we won more than we lost. So, we ended up having six SKU's in Trader Joe's at that time. They were buying full trailer loads of coffee, which is a manufacture's dream weekly, it was like clockwork, 5 or 6 trailer loads of coffee every week to their 5 distribution centers! So much for the 80/20 principle, we were a Trader Joe's facility, and at that time everything was going well. In 4 years we never ever had one call back with quality or anything.
We were deeply invested in that business and who wouldn't be, it was a mythical time.
Overall after analyzing their account we were making anywhere between 40-43% gross margin, but the numbers were so big, although it dragged our overall GM down considerably, the volume more than made up for the decrease, not to mention the real growth in sales dollars!
Be very careful what you wish for, although they were a dream account, things always change, and unfortunately they changed for the worse in the end.
But, this isn't really about that, this is about the life part that ends up getting people in the end. you see at that point in my career, I was making over $1 million dollars a year, I was very generous(don't be, if you are in that position), pick your spots and I had a million friends! I was what you would call rolling! The company was also, although I never took more than 5 days off in a row for 17 years, it was what I lived for.
What a feeling as they say. I have taken an old broken down company, moved it, reinvented it and now we were exceeding $25 million in sales, with NO debt. What could be better! What could go wrong!!
Next post coming tomorrow.........
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