A Chat with John Economaki, Founder and President, Bridge City Tool Works
Now our fulfillment facility is more efficient and better. And when you do the math — and in the direct marketing industry, math isn't overly burdensome, but it's sneaky math — when you go in and look at what it really costs you to ship and fulfill a package, and you get a quote and the guys says he'll do it for $9, you're going to pick and pack for $9? On the surface, I look at 20,000 to 30,000 boxes going out of here every year. That seems like a boatload of money, but when you finally do the analysis, you realize that's actually a pretty good deal. And they're getting at some economies of scale that we'd never be able to reach on our own. And not only that, they have cheaper rates with FedEx and UPS and other shipping guys that we can't get because we're too small. Shame on me, but it took me 20-some years to figure that out. But, when you bootstrap a business, you don't have those options. You fulfill your orders in your basement, and when you get kicked out of your basement, you have to hire someone else to do it. It just evolved to the point where it became something I didn't want to do. And I wanted to minimize my financial risks from a management standpoint by not managing it. I wanted to know that I didn't have a guy stealing me blind. Now, if I have an inventory shortage, I get paid for it, instead of eating it. And there's no such thing as inventory growth. It only shrinks.
CS: So what do you do in house now?
JE: We do all of the proprietary product design, which is primarily my responsibility. I'll sit here and conceive of products, and we'll talk about manufacturability. And at some point in time it's time to put that project into production. I start a chain of events whereby that thing will get components, and I'll schedule it and it'll go to whoever will do the final assembly. All of the marketing is done here at our facility. We do use outside graphic artists, but we write our own copy and take all of our own calls and manage customer service.