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Last Update: Wednesday December 13, 2017

Key Idea: Search the World for Value

Global sourcing delivers value pricing and keeps customers coming back.

Key Question:

A: 

Bring your customers the best products at the best prices. As the Vice President of Finance, Tom Deregibus, told us, wine is an agricultural product and is subject to the weather. By shopping all over the world the Opici Group can bring its customers great wines at great prices. If there is too much rain in Australia, they can buy from Chile.

Q:
How does global sourcing deliver value pricing?

A: Global sourcing is comparison shopping for your customers throughout the entire world. Prior to the revolution of the Internet, this was virtually impossible for the small business owner. Today, the most remote vendor is just a few keyboard clicks away.

Suppose you had a cold and went to your local pharmacy to purchase your favorite cold medicine. There it is on the shelf, at a certain price. Do you buy it or do you note the price, get back in your car, and travel to 25 more pharmacies and grocery stores to get that same product at the best possible price? Of course, you buy it.

But suppose all the prices for that cold medicine at the various locations surrounding your home were known to you before you left your house? Wouldn’t you go directly to the best offer? That’s what the Internet has done for us! As small business owners, from our businesses, we can research available products quickly, accurately and globally.

Global sourcing doesn’t just mean getting the best prices, it means expanding the product catalog to more pages than we can possibly imagine. We have the opportunity to provide our customers with the best products at the best prices. We can change our inventory mix from week to week always offering our customer the best selection of quality at the most reasonable prices possible.

Finally, there are incredible work force possibilities. You can outsource internationally. The large publicly held companies were the first to do this, hiring engineers and architects from disadvantaged countries at far less than the cost of hiring them here. Do you think that’s Un-American? This is a controversial issue, but if American companies can be more competitive and deliver better products to their customers because they have managed their own costs effectively, isn’t that good for all of us?

More and more small business owners are procuring services such as graphic design, accounting, website hosting and Internet marketing from international vendors who deliver outstanding service at very competitive prices.

Think about it

Are you taking advantage of global sourcing possibilities available to you? Have you changed the way you procure goods and services because of the Internet? Could you?

Clip from: Opici Wine Group's Three Generations

Glen Rock, New Jersey:  One never knows when power, love, and money intersect within a family, how it'll play out. When company founders, Rose and Hubert Opici, thought the next generation was ready to run the company, they retired to Florida.  They were a bit too optimistic. Though from within the family, their new leadership had power and money but not the love that was Rose and Hubert's special ingredient that had nurtured this business into being for over three decades. Luckily, Rose and Hubert were paying attention. They came out of retirement, removed their bad apple, and restored health and vitality to the business.  
 
The hard lessons learned from that experience steeled the family for the tasks ahead. Their daughter, Linda, became president and they began recruiting strong veteran industry talent. Then to prepare their grandchildren, Dina and Don are getting on the job training from the bottom up.
 
Learn how a business is built by celebrating life around an evening dinner with family, customers and suppliers. It is a very basic business formula: Know your customers and suppliers well. Get to understand them, like them, and trust them, and the business follows.

This company opened for business in 1933 and you will hear the third generation talking about taking Opici into its second century of operation. 

Go to all the Key Ideas & Videos of this episode...

Opici Wine Group

Linda Opici, President

25 DeBoer Drive
Glen Rock, NJ 07452
2016891200

Visit our web site: http://opici.com

Office: 2016891200

Business Classification:
Distributors

Year Founded: 1933

Search the World for Value

HATTIE: Tom Deregibus, Rose's brother is the CFO.

TOM: My responsibilities are primarily in the finance area. I've got the sharp pencil. It is a little bit in pricing and it is also making sure that the inventory dollars turn on a regular basis. The more you turn your dollars, the better the profit structure is in an organization. Any agricultural product is dependent on source. When supply becomes low, the prices automatically rise. And the market reflects that vintage by vintage.

And we have a broad base of products that cover the span of the world. If in France prices are on an increase, people will shop in other markets. They will go to Chile or Australia.

HUBERT: The French, like I said, are haughty and hubris and thought they had the best product in the world and they were the leaders. And in fact the California - the college in Davis - California developed a wine course and the Europeans came to California to learn how to produce wines. They produced wines better than France. In 1978, they had a blind tasting in America. I think eight wines -- they took the prizes. And that kicked off California after that - that was '78 - and that is when California was accepted as a world leader in making wines. And we were fortunate enough to have 3 good brands that opened up all of the doors for us, where we couldn't get in before.

HATTIE: The positive part is that with good pricing, fair pricing --- everybody in the distribution chain wins.

HUBERT: --- makes money. That there is always a couple who think - well you go to a restaurant and some restaurants charge up wine 1 and a half - other restaurants charge up four times. You can buy a bottle of good wine in some restaurants for 17 to 20 dollars and you go to some other place and pay 50 dollars. Those restaurants are starting to suffer now. Sell a reasonable and honest price and you will sell a lot more. If you overcharge, first they resent it and secondly they may never come back or either they won't buy the second bottle.

LINDA: Absolutely, the most important thing I think is that you have to have products of quality and value. Because, otherwise, it's just spinning your wheels with no return.

DINA: There is no reason why any customer has to do business with us. There are plenty of wineries out there, there are plenty of wines out there. The only reason they do business with us is based off of the quality of the wine that we sell as well as the favorable pricing and the relationships that they have with either people in our family or people who work with us.

HATTIE: How do you measure you success?

LINDA: We use all types of reports that are put out. Seeing where we are compared to other people. We see how our business is growing. We have plans that we set up -- the three to five year plan -- showing where we want to be in three years, in five years by percentage points. And we just make sure that that happens. And you have met Burton and he is the head of sales and you know that that is going to happen. Not a problem. (laughter)

DINA: For a younger generation, the best thing is to have the older generations around. To not only impart their wisdom, but to impart their experiences.
 
 

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