Closeouts With Class�
An Interview with CWC Industries Mark Ginsberg
By Robert Nordstrom
CWC equals Closeouts
with Class.
In 1993, when
the Ginsberg family divested their interests in a large publicly traded
company with whom their earlier jobbing company had merged in 1986, they
agreed to reincorporate under a name that reflected who they were and always
had been as a family business. Although the CWC in CWC Inventories may be an
acronym that not everyone knows the meaning of, brothers Mark and Bruce
Ginsberg, brother-in-law Tom Diedrich, and father Frank Ginsberg view their
family company�s name as an ideal that they must live up to in each and
every business transaction.
Founded in 1973
under the name Frank Ginsberg Enterprises, St. Louis, Missouri-based CWC
Inventories today services over 2000 accounts ranging from mom and pop
stores to multi-store chains with a broad array of hardlines, grocery, and
apparel goods. For small retail operations that want a single case to
experiment with new product, CWC is there to service them. And if a chain
operation needs to feed 2000 stores, CWC will deliver container loads to
meet their needs.
As Mark
Ginsberg says, �We believe in providing impeccable customer service. It�s
not just about price; it�s about value. Without value in your method of
doing business, you become nothing but a commodity.�
From a Regional to
National Operation
In 1973, when
Frank Ginsberg opened Frank Ginsberg Enterprises after a 35-year stint in
the discount retail business, Frank leveraged his relationships with the
brand name manufacturers that had supplied his 49-store chain to help them
move problem inventories quietly, efficiently and without threat to their
main distribution channels. Many of these relationships continue to this
day.
At that time,
there was an emerging class of closeout retail stores hungry for brand name
merchandise. In the beginning, the business was primarily regional, as was
the case for most jobbers at that time. Then in 1975, with son Mark Ginsberg
out of college and working the business, they were introduced to a West
Coast retailer who suggested they take exhibit space at the TransWorld Show
in Chicago.
�That was great
advice,� says Mark. �Attending trade shows is the most successful strategic
move we ever made.�
The move turned
the company from a regional into a national operation. The Ginsbergs
augmented their sales staff based in St. Louis with a network of sales reps
throughout the country and the company was off and running.
You Need It�We�ve Got It
Until the
1990s, the company focused strictly on brand name closeouts in the hardlines
area, with a broad selection of gifware, housewares, hardware, and lighting.
When Mark�s brother Bruce joined the company in the early �90s, he convinced
management to move into grocery, sporting goods, and team apparel.
According to
Mark, �this is when we really started to grow.� The company doubled its
sales volume from $11 million to $21 million from 1993 to 1995. And with
product diversification, the company�s customer base expanded dramatically;
CWC became a one-stop shop for its retail customers.
�We�re a
closeout jobber,� says Mark. �We�re buying opportunities all the time.
Possession of goods in our warehouse is critical. We research the
merchandise, purchase it, inspect it when it comes in, so when our
salespeople are out there selling it, they and our customers know that we
are representing our goods accurately.�
The company
carries approximately 3,500 skus at all times. In terms of dollars, 40% is
in hardlines, 40% in grocery and health and beauty, 10% in sporting goods,
and 10% in team apparel.
Impeccable Customer
Service
In today�s
competitive retail environment, vendors must focus on impeccable customer
service to survive. CWC offers open credit terms and takes credit cards if
necessary. The company will take a $300 order for a few cases or will
deliver a container load, depending on what the customer wants and needs.
With freight rates skyrocketing, the company offers a prepaid freight plan
to ease the burden on the customer. For the larger chains, CWC is EDI
capable and prepared to handle special packaging and labeling requirements.
�If you want to
continually grow your customer base,� says Mark, �you must do what the
customer requires and do it well. We�re a one-stop shop. Small, medium, or
large retailers can buy a little bit of everything from us. From the
beginning we�ve focused on better goods as opposed to strictly on price.
We�ll sell a $375 brand name telescope for $75, Timex clock radios,
Tramontina cookwear, Rival appliances, Paul Mitchell shampoo and
conditioner, authentic Cadre sports jerseys.
CWC prides
itself in finding new and exciting inventory as well as making merchandising
and promotional suggestions for its customers. For example, Mark says, �If a
team apparel retailer is buying Yankees jackets, he might take a look at a
headphone set. He can retail it at 50% off for the customer who wants to
listen to the game while he�s at the game. Or maybe the customer will pick
up a cocktail table, a folding chair and a 24-pack cooler with the Yankees
logo on it to use at a barbeque because he can�t make it to the game that
day. That�s our niche. That�s what we�re good at.�
Staying on Top of
Technology
To manage its
broad product categories, CWC has always invested in state-of-the-art
technologies. Inventory control is a critical issue and must be updated in
real time to allow the sales staff to serve their customers knowledgeably
and efficiently. Two years ago, the company began using sales order scanning
system at the tradeshows.
�At the ASD
Show,� Mark says, �we bring all 3500 items in our inventory. It can take a
retailer two hours to start at one end and go to the other end of our booth.
If the salesperson is hand writing product descriptions and prices, he isn�t
able to speak with the customer. Now, the salesperson can scan the UPC code
on any item and it automatically brings the item up on the order entry
screen in a fraction of the time it took to write an order by hand. It gives
the customer the product description, pricing, weight�everything he needs
while automatically updating the inventory for the next salesperson walking
through with a customer. Now there is very little variance between what we
sell and what we ship.�
Trade Shows versus
Showrooms�Striking a Balance
CWC�s main
showroom and 225,000 square foot warehouse is in St. Louis, but the company
also maintains permanent showrooms in Chicago, New York, Boston, and Miami.
The company did not always maintain so many showrooms. In the 1970s and 80s,
CWC�s primary means of face-to-face contact was through its tradeshow
business, to the point where the company was attending 12-15 shows a year.
As the quality of some of the tradeshows declined, however, the company
opened up showrooms in strategic cities in order to maintain face-to-face
contact with customers.
According to
Mark, �Showrooms are nice�they give you the ability to meet with customers
in a relaxed, private setting. In hindsight, however, they do not generate
new customers the way tradeshows can. We�ve learned that we can�t rely
solely on tradeshows for growth. We also know that while showrooms have
value, you can�t grow your business on showroom business with established
customers only. You have to have balance. You need tradeshows run by
professionals who know how to bring retailers to the market where you can
meet new customers and generate new business.�
Today, CWC
shows its product at five shows per year: two ASD Shows and three Off-Price
Specialist Shows�both Apparel and Home & Gift. The company joined the
apparel show in 1997, when they moved into team apparel, and has been with
the home and gift show since its launch in May 2004.
When CWC first
attended the Off-Price Apparel Shows, they brought only team apparel
product. Over the years, however, they found that many attendees were
interested in other product as well.
Mark says,
�What would happen is small independent retailers would stop by our booth
and say �I see in your brochure that you have other product. Call me if you
get something exciting.� Even the larger, more structured companies will
sometimes refer other category buyers to us. The shows have been a home run
for us�and we love that the Home & Gift Show is joining the Apparel Show in
August. For the past three May Home & Gift Shows, we�ve doubled our volume
every show.�
Retailers, Vendors and
Employees�They�re All CWC�s Customers
CWC views
quality customer service broadly as a three-prong approach involving
retailers, vendors, and employees. While it goes without saying that a
company must always be there for its paying customers, vendor relationships
are just as critical. Successful jobbers are the first telephone number
vendors look up on their rolodex when they have goods to move. Because
jobbers are paying less for the goods than a retailer, they must also assume
more risk. They must pick up the goods faster, buy entire inventories, and
pay quicker. They must avoid petty claims against vendors and always
maintain a high level of integrity in their business dealings.
�Nurturing our
vendor relationships is one of the most critical issues for us,� says Mark.
�We�ve been dealing with some of our vendors since 1973, and a few of our
vendors deal with us exclusively when they have closeout goods.�
Employees, the
third factor in CWC�s three-prong approach to customer service, are key to
the company�s long-term success. Of a staff of approximately 50 employees,
CWC boasts several who have been with the company 15 years and several
around 20 years. Ron Gravemann, vice president of sales, has been with the
company 24 years, and Henry Hoeynck has been with CWC for 32 years. �It�s
all about loyalty and we�re pretty proud of our commitment to our
employees,� says Mark.
It�s All About Class
The Ginsberg
family prides itself on its history and reputation as a jobbing operation
with �class� that will never sacrifice integrity for profit. From the very
beginning CWC�s patriarch Frank Ginsberg understood that over the long term
business goes up�business goes down, but a �classy� operation always
transcends the vagaries of economies. Back in the 70s, Mark remembers, Frank
Ginsberg exemplified that philosophy not only with the merchandise he sold
and the business practices he followed�but in the clothes he and his staff
wore.
�My dad always
believed in the closeouts with class idea. To the point where he had all of
us dress in tuxedos when we exhibited at the old TransWorld Shows. Tuxedos
in the closeout industry!�the second generation all hated the idea. But it
was a brilliant idea and absolutely solidified our brand. To this day, when
I run into one of our longstanding customers, they inevitably smile and say,
�where�s the tuxedo?�
