Why do companies need another middle man?
Mark Erickson: The term ‘middle man’ sort of implies a person who collects a fee for not doing much. Maybe he’s got a Rolodex and can connect a buyer and a seller, but he’s not really adding any tangible value to the product.
Tom Mann: Yeah, and he often can’t be found if anything goes wrong…
Mark Erickson: That’s why you hear so many direct sellers say in their ads “go factory direct — eliminate the middle man”…
Tom Mann: I can’t say as I blame them…
Mark Erickson: Yeah. It all depends on what the so-called middle man does. In our case, if a client already has an organization that includes the services that we provide, then I would have difficulty convincing them that they need us. On the other hand, if they don’t have all that, or if they want to, say, extend their brand into an area where they lack expertise, Well, they can either build an organization person by person, office by office, or they can outsource it as a package. One way or the other, he’s got to get that stuff done. And that’s where we fit in. We can handle everything; the development, the quality control, the manufacturing, the delivery, customs, logistics.
Tom Mann: The point is, we’re actually adding value to the product; we’re not just collecting a fee because we happen to know some people. Here’s the thing: whether you call us ‘middle man’, ‘facilitator’ or whatever, we have to be competitive with a client’s in-house costs if they took on the process themselves. That’s the factor that ought to determine whether a client hires us or not. In fact, our costs actually have to be better than the in-house costs because, without mark up, we couldn’t stay in business. So we constantly must find better resources, more streamlined processes, and more careful quality control so we’ll survive another year.
Who is your typical customer?
Tom Mann: All sorts of interesting people come through our doors, from retailers and wholesalers more interested in outsourcing than building a huge overhead structure, to entrepreneurs who have ideas for new businesses. The entrepreneurs are really fun because they’re the hope for the future. You can see it in their eyes. They’ve got the greatest idea and they’re all full of enthusiasm. We keep an open mind to these guys, even though they’re usually small. Sometimes they have ideas that actually turn into a viable business.
Mark Erickson: One thing that’s typical of all of our customers — big or small — is that they’re all looking for the most efficient ways to operate their business.
It must be difficult to start an apparel company from scratch?
What role does Erickson play?
Tom Mann: Many times people will come in the door with more enthusiasm than capital, business acumen, or an appreciation for downsides of the business. They may not know that bad forecasting that can result in a warehouse full of unwanted inventory. They often don’t appreciate how difficult it is to compete against established brands.
Mark Erickson: So we keep a bucket of cold water right by the front door, as a ‘reality checker’! We’ve lost a few jobs that way…
Tom Mann: Well, you have to have more than a good idea. An outdoor industry guy named Bill Moss once made a comment that I’ll always remember. He said “An idea is the lowest form of life”. He meant that you also have to have patience, money, and marketing sense. You have to combine all these things and also get lucky. A lot of these brands are built through word of mouth so you need to get your products into the hands of people who other people listen to. And that’s not easy to manage from afar. Some people are good at it; some people aren’t.
Mark Erickson: Entrepreneurs are often shocked to see how much time they’re having to spend on things they didn’t realize they had to do, or don’t like to do, or don’t know how to do. They can ‘burn out’ before they even get started. Our business: For them, Erickson Outdoors can take a big set of headaches off their shoulders. We can handle all the issues having to do with product development, pattern making, sample making, locating the right kind of factory to sew their product, managing the manufacturing process, packaging the product, and so on. Now the entrepreneur has a little more time to focus on the things they do best, which is usually design and marketing, or sales and distribution.
