Confessions of a Small Town Retailer

13 Nov

The following is a copy of a letter to the editor, by my husband, David Swedberg, which ran in the Warroad Pioneer on Tuesday, Oct. 27, 2009.

Small Town Retailer, David Swedberg of Warroad, MN A few years back, I decided to own my own business because I loved the community and it was an opportunity to be my own boss. What started as a three month business turnaround project became a three year education. I am learning how little I know about economics.

As for being my own boss, I now realize I work for everyone who enters my store and I have learned to love it. I try to figure out what you will need a year in advance and then order, receive, stock, clean, count and charge you for it when you finally realize it was something you always wanted. On average, my products wait for your purchase for a year (I’m sorry) so I pay our local banks interest on this investment because you will need it. Most of the time I kid people that I really own a museum and sometimes sell some of my exhibits. A portion of the product is dated, so I regularly clearance price it at my expense when I didn’t sell it in time.

When I put a price on the product, I take many things into account. First, I really don’t do the work – I just pay bills, so I need to find, train and pay some of the nicest people I know that would want to help me do this. I don’t pay them much, but it adds 20% to the cost of my product. They help me more because they like you and enjoy seeing you and living in our community together. When I was purchasing the store, a banker asked me why I wanted to spend so much money to buy a $5/hour job – I thought he was kidding me. Anyways, this 20% is the best money I spend, paying my friends to work with me.

The next thing I add to the price of the product is the cost of my building. The mortgage with the local bank is eye-popping, especially when I talk with a realtor and realize no one would ever buy it because it is in the wrong location and in the wrong town. But it is a good building, and I hire many local craftsmen to help me remodel and repair it.

The City utilites are almost as much as the mortgage, and the ordinances say I am responsible for any injury on adjoining sidewalks, so I salt and shovel them diligently. I also purchase insurance, which I buy from a local agent, and use when my customers need it.

The cost of the product is certainly a large part of the price I put on it. I am so grateful when I see my salesmen and women, and many times I have to go to Minneapolis or out of state to meet them and hear them tell me what you will need next year. My account is small, so I have to pay for everything they tell me you will need and when I find out you really didn’t like or want it, I clearance price it at my expense or donate it to the local thrift store where you can get some really great deals.

My suppliers are the key to my success. My pet supplier is the most amazing guy I know. He has a full-time job to support his pet addiction (sort of like a farmer). He will go to Florida to find and tour fish farms where many of our fish are raised, and go to the airport in the dead of night when the fish arrive. He injects oxygen into the fish bags and drives hundreds of miles in some of the worst weather to deliver pets to Warroad. He is my best grief counselor, often comforting me when pets are unable to make it to your house alive. This is one of the hardest parts of the job and there is no insurance for these losses, so we work together to do whatever it takes to keep the pets healthy and disease free. It is silly, but the most satisfying part of my job is feeding pets – they appreciate it so much and I know they really do need me.

Oh well, I got sidetracked. One more large cost added into the price of my product is the transportation bill to get the product to Warroad. In most cases, it is 15% of the cost of the product, but when I order through my volume suppliers and use local trucking companies I can get it down to 7%. These guys are worth every penny of it, and I enjoy greeting the drivers everyday at my door. My dad was driver, and these guys make it possible for us to live on the edge of civilization.

To conclude, I confess you will pay for my product in Warroad – but I don’t think it is more than I paid. The nagging problem is that it is 5-10% less than what I spent getting it here for your convenience. I agree, it is something I control and when I don’t, the better store will win. It is the classic case of caught between a rock and hard place, and I don’t think I would have it any other way. I was never good at economics: I only wanted to live in Warroad.

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One Response to “Confessions of a Small Town Retailer”

  1. Sharon Hodgson Upchurch November 13, 2009 at 10:13 AM #

    I receive a Google alert for Warroad (my hometown) and enjoyed reading your husband’s letter to the editor on your blog.
    Living in Warroad as far as pricing goes, is similar to any small/medium sized business competing against Wal-Mart. I stay away from Wal-Mart just so the other guys have a chance. I appreciate the way your husband carefully explained his business pricing and hope it has an impact on the people of Warroad.

    My prayers are for your success in business and in life,
    Fayetteville, NC

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