My Library and Courses
Last Update: Thursday July 29, 2021

Key Idea: Find the Right Vendor

Language is no longer a barrier to trade or to building the right relationships.   More...

Key Question:

A: 

Search the world for the right product.

Q:
Why does the relationship with Seiko work so well?

A: David has learned whom to work with in Japan. He has traveled there often and he provided an office for Ted Ishimaru, the Seiko liaison. We know David has won the trust of this huge company and he kept it by keeping communications open. David said he learned much about the art of listening from his Japanese partners and in turn, they depended upon him now for product design. They know David is listening to the consumer as closely as he listens to them. David proved himself over and over.

Q: Does David just do what the Seiko people tell him to do?

A: No. When he was not making enough profit margin, he complained and the Seiko company actually changed its distributorship strategy. The two companies had a give and take relationship, which is honest and healthy. 

Think about it

Have you thought about looking international partners? Should you? 

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.

Go to all the Key Ideas and Videos for this episode...
Go to the homepage for this episode...

The King Company, now SMI Direct

David Arnold, founder

Visit our web site: http://www.smidirect.com/

Business Classification:
Distribution

Year Founded: 1991

Find the Right Vendor

DAVID: Right. Actually the keys to the King Company and where we are today as being the exclusive Lorus importer in the United States is a very good model for what a partnership between a vendor and manufacturer in another country and what they can put together in the United States. We work very, very closely together. We have learned to understand each other very, very well, even though...

HATTIE: What did you have to learn to understand? What surprised you? What did you say, `Oh my gosh, I didn't know I had to do that'?

DAVID: One of the stories--I even like to tell on this today, and a lot of these Japanese guys, they still remember this--I get over at the table, I'm very nervous. There's 11 Japanese. They all handed me, formally, their business card. I don't even think I had enough business cards to pass them all out. And I gave them my card, and I just started talking, the only thing I knew how to do. They asked a question, I talked. And I could see this puzzled look on all of their faces as I'm talking. And finally I just stopped, and I said, `Do y'all understand?' And almost to a one, they shook their head no. They had no idea what I was saying, because I was speaking real fast, speaking in Texas slang, and I realized--I said I had to slow down, I have to use literal English words. And I learned to do that, and that's worked out real well.
 
HATTIE: (Voiceover) Ted Ishimaru, Seiko liaison, offices at the King Company, and closes the language gap.

Mr. TED ISHIMARU (Seiko Liaison): Not because he cannot write or communicate, but I just wanted to make sure that the people in Tokyo understand, the way he understands himself, because it's not always the same.

DAVID: The other thing about the Japanese culture that we in the United States need to do much better is learn to be better listeners. Because of the language barrier, Japanese are the best listeners in the world. If you talk to them, and literally, they'll understand what you say. They have to listen because of the translation. And so it's made me learn to be a better listener. A key to our relationship really now is I understand them and they understand me. The biggest thing we can do is always learn.

HATTIE: And don't be afraid of the global business.

DAVID: Don't be afraid of global business. The world's a small place now. When I started this business driving around in my car, my area and my market was very small. But what I've found today is that with the consolidation of the retail industry, and the bigger guys getting bigger, the smaller getting smaller, it's a small world. You can hop on a plane and be anywhere within three to three and a half hours right now. I can hop on a plane today and be in Tokyo in 12 hours.

HATTIE: Now you've got Seiko, you've got Disney, you've got Wal-Mart. I mean...

DAVID: And I've got to balance all three. That is correct. And at the same time keep the small company image, quite frankly, that I want. We are a buffer between a lot of major companies, large corporate companies, and I think that's worked to our benefit is because we are smaller, we are a little more flexible, we are a little more diversified. I mean, we can do things that maybe a large company might have a harder time doing.

HATTIE: You know, what advice would you give someone?

DAVID: Find a good plan. I mean, first of all you've got to have a product that's marketable. I found a niche in the watch business in the '70s and early '80s that was, quite frankly, underdeveloped. I think if I was to do the same thing today, it would be very difficult.

HATTIE: You wouldn't do watches today.

DAVID: It'd be tough.

HATTIE: You'd do something else.

DAVID: I'd probably do something...

HATTIE: But the big idea is, find something...

DAVID: I'd find a niche that's marketable. Find something that's marketable, find the right niche. The second thing is, develop relationships with customers, because after you're in it awhile, your reputation gets out in front of you. And really what it boils down to is that the company means a lot to the people. It's not just the weekly or the monthly paycheck. The company means something, the success of the company. I've always felt that if you're successful in what you do, the rest of it will take care of itself, the profitability will take care of itself. And quite frankly, I've proved that that system works. I just try to be successful.And as a result, the money, you know, the financing and stuff...

 

Not a member yet? Learn!  Be empowered! Join us!