Genesis Of Rapid Growth

Rapid Growth

Lakeville, Indiana; population: 393. Hardly the place you’d expect to find a thriving “destination” retailer.  Nonetheless, on the south end of “downtown” Lakeville, sits Working Person’s Store.

Making good on our promise of “Brands That Work” the store’s walls are neatly lined with every kind of work shoe and boot imaginable.  The shelves are piled high with sturdy overalls, jeans, shirts and a surprising variety of work related accessories. From “head to toe”, the Working Person’s Store is truly “dedicated to the working person”.

Since opening in1995, (originally as a shoe repair shop) our business has grown steadily while adding new work footwear/clothing brands, product categories and distribution channels, including a  “shoe mobile” serving industrial “B2B” customers in 1998 and an online catalog serving the national market in 2002.

By late 2004, the trend was clear: while sales growth in the retail store were beginning to level off, the company’s Web site appeared to offer a significant growth opportunity.

In early 2005, Eric Deniger, our CEO, decided to put a “full court press” on growing the e-catalog channel.  A growth strategy was mapped, resources allocated and an implementation team assigned.

Our strategy had three primary elements:

  1. An in-depth analysis of customer needs, wants, preferences, and internet search behaviors
  2. A total Web site redesign focused on improved usability, functionality, “customer experience” and search engine visibility
  3. Vendor and merchandise research to better match the offering to customers’ preferences

Implementation began June 2005.  Customer and sales data was carefully sliced and diced.  New tools were introduced to learn how our customers were using the Web site. Ongoing A/B testing of multiple features led to improved site design and sales conversion.

Search engine keyword advertising campaigns were stepped up to provide additional data on customer brand and product preferences.  (Over 50,000 keyword combinations were tested.)  The insights we gained on customer product preference were invaluable and led to a much-improved merchandising plan.

Keyword “click-through” and sales conversion data was then used to systematically improve the Web site’s “organic” (i.e. “free”) search engine visibility across brand and product categories. (Example: appears “page one” on a Google search for “Wolverine boots”, “Carhartt sweatshirts”, many others.)

The company’s three-prong growth strategy exceeded expectations. Sales results for third and fourth quarter 2005 increased by 608% compared to the same period in 2004.  Rapid growth continued into 2006, with first half sales growth increasing 1,177% over the same period in 2005.

As can be expected, managing this exponential sales growth has had its challenges.  Fortunately for us, our UPS shipping partners have worked tirelessly to keep up with our huge delivery volume increases.

Their intervention in implementing “as needed” multiple daily pick ups; sending larger trucks, (and more), has proven invaluable. And best of all, their 99% average “on time delivery” service level has allowed us to pursue our goal of “creating new customers and keeping existing ones.”

What Is MAP Pricing?

Minimum Advertised Pricing- MAP

Making the case for MAP enforcement

Minimum Advertised Price
Making The Case For MAP

In concept, retail is pretty simple- a retailer buys something (inventory) from a supplier and sells it for a little more (gross profit).  That gross profit is used by the retailer to pay for operating expenses (labor, freight, rent, etc.) and the Cost Of Goods Sold (inventory) is reinvested in new inventory.

Not all retail businesses compete on an equal playing field.  (No kidding, right?)  There are two points in the sales continuum where a retailer has an opportunity to improve gross profits.  The first is when the retailer buys the inventory and the second is when the retailer sells the inventory.  The size and scale of the retail business has a meaningful impact on the ability to generate improved gross margins.

Not all retailers are concerned with generating higher gross margins.  Instead, they subscribe to the belief that increased volume predicated on actually lowering gross margins is a winning strategy.  This is often referred to as the “make it up in volume” approach to retail.  Just while writing this someone in the call center showed me a price match request where our competitor is selling the item for $10 under cost.  (Make that math work.)

The internet is the Ultimate Price Discovery Mechanism.  When we train new employees we give them a product to locate online and we ask them to add it to the cart.  Once done, we ask them to find it from a competitor for a lower price.  On average, it takes 17 seconds for them to find the same item for a lower price and add it to the cart.   Ask yourself this:  If you were a manufacturer building product and a brand, would you want to be considered to be a premium, well-made product or the commodity brand in the space?

Manufactures set two prices for their products to establish the product’s place in the market: Suggested Retail Price  and Minimum Advertised Price.  The Suggested Retail Price is generally regarded as the highest price the market will pay for the item.  The Minimum Advertised Price is the lowest price a retailer can advertise the product online, in a print ad, billboard, etc.  It does not necessarily mean the retailer can’t sell it for less, but it does mean the retailer cannot advertise it for less.  The point of MAP pricing is to help level the playing field, establish a reasonable price for the product.

Why would a retailer comply with MAP pricing policies?  Because Might Makes Right.  First, the manufacturer has a legal right to establish the lowest advertised price for their products.  Second, the manufacturer has the ability to put teeth into the enforcement of the policy by withholding marketing funds, promotions, etc.

Employee Handbook Sign-Off Sheet

Employee Handbook Sign-Off Sheet

I, _________________, have read and understand the contents of the ________________________ Employee Handbook.  I also understand that I will be fully responsible to uphold all of the policies that are contained within the handbook.  I also understand that if I do violate any of these policies, that I will be subject to any disciplinary action as described in the handbook. 

Employee Signature



Salary Increase Modification Form

Salary Increase Modification Form

THIS AGREEMENT dated as of _____________, 20___ by and between ________________________, an _________________ corporation, and _________________ hereinafter referred to as Associate, whose address is:

IN CONSIDERATION of past satisfactory work performance, ________________________ grants a salary increase to employee on the terms and conditions set forth herein.


The duties of employee shall be those of _____________________, which is a _____________-time _________________ position.  Associate must contribute a minimum of ________________work hours per calendar week.


Associate shall be paid at the rate of $___________ per _______________ in accordance with ________________________ standard salary schedule of a ____________-hour minimum workweek.

[Associate shall be paid commission through personal performance and business performance, which will be measured and paid on a monthly basis.  Said scale will be reviewed and agreed upon quarterly.]

Employee shall also receive such benefits to which employee is entitled and be subject to such policies as published in the Associate’s Handbook from time-to-time modified by ________________________.

IN WITNESS WHEREOF the parties have caused the Agreement to be signed and delivered as of the date set forth above.