Small Company Secrets: The milk car incident |
| By Paul Burri Well, maybe it wasn’t so much an “incident” as a lesson to be learned. (By the way, many of life’s problems, mistakes and misfortunes can and should be considered in the light of “what can I learn from this experience” — but that’s another future column.) Many years ago when I was just a kid, I worked for a bicycle store in New York City. One day, the owner of the store — I’ll call him Ben — decided that he wanted to become a Lionel model train dealer. (If anyone still remembers Lionel trains.) At the time, getting a dealership was not easy because there were already numerous dealerships around the city. So Ben flew out to the factory and wangled himself a dealership. It was in late October or early November and the Christmas rush — especially for toys — was just starting. And it was also just when Lionel introduced a special milk car for its freight train line. Today this would be a ho-hum product; in those days it was revolutionary. You would stop your model train at a special section of track and then when you pushed a button, a little man would pop out of the car and unload a milk can. It was hotter than a worm in a frying pan and every dealer in the city wanted as many of the milk cars as he could lay his hands on. But, of course, they were being rationed by the factory so the dealers could only get what the factory shipped them rather than what they ordered. As it happened, Ben’s bicycle store had two bicycle servicemen on the road five days a week. Ben gave each of the drivers about $50 and instructed them to stop in to every Lionel dealer on their route and buy however many milk cars the dealer would sell them. Now here’s the interesting part. Ben was paying full price (and sometimes a little more) for these milk cars, which he immediately turned around and sold at list price. It took me many years to figure out what sort of sense it made to buy an item at a certain price and then sell it for the same price. Here’s the answer. At the end of the Christmas season that year, Ben’s dealership was known throughout the city as the place to go when you wanted any Lionel train products. Within two to three months, Ben had become the largest, highest-volume Lionel distributor in New York City. You can bet that Ben was not bashful about letting the factory know about that. And from then on, when Ben called the factory for anything special, he usually got what he wanted. By “trading dollars” — buying and selling at the exact same price — Ben cornered the New York City Lionel train market. There’s a lesson to be learned. It’s also an excellent example of what is called guerilla marketing. or as I sometimes call it, “milk car marketing.” Paul Burri recently sold BrandNew Industries in Goleta. Send your questions, comments, criticisms and snide remarks to vvoice@goletavalleyvoice.com.
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