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Key Idea: Do Small Things Well

David Arnold has never tried to hit a home run. He simply wants to advance himself slowly and carefully around the bases and is happy if it takes time to score.   More...

Key Question:


Build your business by taking one step at a time. Keep your fundamentals strong. David has never tried to hit a home run. He simply wants to advance himself slowly and carefully around the bases and is happy if it takes time to score. This strategy has paid off because, as he competed with other watch distributors, he went after small and medium-sized accounts - not the big guys. This gave him cash flow and time to put the building blocks of a strong company in place. When it came time for Seiko to limit its number of distributors, David always made the cut because he delivered the sales and the service that can only be done by a team he built carefully over time.

Dolly Parton said, "It only took me 25 years to become an overnight success." David became the sole importer of Lorus because he took his time to do things right. He never tried to hit a home run and never expected to score big without putting in years of focused effort. Slow down, step back, think, plan, and find people to work with you. You don't have to hit a home run. Just keep moving in the right direction.

Q: How did David attract the attention of Seiko?

A: At the beginning, he had a mentor. Then he got them to notice him because he was selling more Seiko watches than any other U.S. Distributor.

Q: What was his sales strategy at that time?

He developed great relationships with small and mid-sized customers. This meant he was still driving the original route but added some larger retailers. He never tried to call on Wal-Mart of KMart or Target back then.

Q: Do you think he should have called on the big stores when he first started in business?

Maybe. But, David has always believed you should only bite off as much as you can chew. As he slowly grew, he added staff and technology so he could handle customers properly. You have to sell because nothing happens until something is sold; however, you have to service the customer so they buy again. David's inventory control and tracking is critical, and he never wanted to open an account he couldn't service.

Q: What happens when a batter is always trying to hit a homerun?

A: He strikes out a lot. My brother-in-law is a coach and tells me this is called "pressing." The batter who tries too hard usually has a lower batting average than others do. We have learned this from so many: there's no free lunch, no easy way to make money, no overnight success. In the world of the Internet, there seems to be quick money, but not really. The companies being written about in 1999 such as are operating in the red. These companies haven't proven themselves yet.

Q: Is David's way the only way to build a company?

No. You can go for the big hits and after striking out a lot, you'll eventually find your sweet spot. I believe this has to do with personality. David is calm, cool and calculating. Building with many small sales fits his personality. Find your style; but, learn from David that nothing happens without time, discipline, effort, and some good timing. 

Think about it

What is your weakest link?  What steps in your processes need improvement?

Clip from: The King Company with David Arnold

Austin, Texas:  He was a high school coach that loved watches.  It all began with a stop watch and became a love for any kind of watch.  The trunk of the family car was always filled with samples. And, he and his wife would go just about anywhere in Texas to find a new drugstore to carry his brand of time. When this story was taped, David had 65 employees and $50 million in annual sales. To create this American dream story, David did a lot of things right.

Look at ways he applied the most sophisticated technologies to the business of ordering, warehousing, selling, shipping and financial transaction processing (collecting on accounts receivable within minutes not 30-60 days).

The watch industry is one of the oldest, but here we learn about some of the newest business practices to create profits and a foundation for the future.

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The King Company, now SMI Direct

David Arnold, founder

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Business Classification:

Year Founded: 1991

Do Small Things Well

HATTIE: I want to try to understand that. How do you convince someone like Seiko to make you their US distributor?

DAVID: It took a few years. Lorus came into the United States. Lorus is a division of Seiko Corporation. Lorus decided in the, oh, mid-'80s that they wanted to get into the moderate- priced watch business; and because over the years I'd done quite well in the Timex business, we were offered the Lorus distributorship. And to be honest with you, I'd never really wanted to do it, but this man named Dean Wilson, who again was the family friend that got us started in this...

HATTIE: The same guy that was hitchhiking.

DAVID: The same guy that was hitchhiking. He still worked for Timex during those days, and he had been a very good business counselor to me. I had really never done anything without his advice, and he told me that, `David, you will never be able to buy as many Timex watches as you'll be able to sell. You need to take home my competition.'

HATTIE: It's interesting, because don't we all need mentors, advisers, people who've got a longer view than we do?

DAVID: Absolutely.

HATTIE: What made you so unique that you all were grabbing the business?

DAVID: I developed a real strong customer base with some very loyal customers. We went after a specific market. We didn't try to be everything to everybody. We tried to be what we were good at and to the customers that we could service real well. So we really didn't over-extend ourselves and try to do something that we really weren't capable of at the time.

HATTIE: Did you talk to Wal-Mart then?

DAVID: No, never talked to Wal-Mart in those early first few years. Because I couldn't handle 'em. I just focused on some regional accounts that I felt that we could be real successful with. And because of that, we got enough of those that we became in the early years--I believe we brought in more Lorus watches in the United States than any of the other nine distributors. At the same time, the retail industry changed a great deal.
I had become a little bit disillusioned; we could sell a lot of watches -- that wasn't the problem -- but making a good profit or profit was very difficult. I went to Seiko at the time and told them, "You know we sell a lot of watches, but I'm not making any money at this."

HATTIE: What did you do? Did you open your books? Do you say, `Here guys, these are the numbers'?

DAVID: Oh, yes, we gave them our numbers. And that was enough! They decided that the multiple importer program did not work anymore and that they would go with just one. And so they asked us to become the single importer.

My management and a lot of the people in the company I've known for a long time. When I first got started in the import business, when Seiko came to me and ask us to become an importer, I called up a friend of mine (who I'd known since high school), Sterling Woody, and I said `Sterling, you've got to come help me.'


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