From A Rep's Perspective
My Daughter is Getting Married to the Fireworks King!
With a future son in law who is in the fireworks business, I have learned my fair share of how a fireworks operation runs. Their business operates multiple stands and act as a wholesaler to many others throughout the Midwest. I thought with the fourth of July right around the corner, you might be interested in the workings of retail in another niche besides furniture.
What a business those fireworks stands are. If you think retail furniture stores are hard work and complex, here’s how the fireworks business works.
First, a wholesaler or distributor needs to bring in fireworks from China with orders placed before Chinese New Year. The buyer generally goes to China to determine what the merchandise mix will be because if you have ever been to a fireworks stand you know there is a lot of selection. The containers head to the states in late spring. That means warehouses and inventory carrying costs before the first black cat or bottle rocket is sold.
The distributor then partners with various local charities that will run the fireworks booth. In our area, only charities can apply for a permit with the city and not all applications are approved. After the permit is awarded, the tents must be arranged, stocked and staffed. Some charities supply personnel to work the booth and they get a bigger discount. For many charities, the fireworks wholesaler arranges the tent and personnel because they have the experience, especially for a charity that does not regularly get a permit.
They do all this so they can sell fireworks for 10 days before the 4th of July. In some markets they only can sell for three days and in some markets they can only sell on the 4th of July. Then on the evening of the fourth at midnight, the tents get torn down and they take what is not sold back to the warehouse for next year.
New locations, new leases, new personnel, new permits, new charities every year. Not to mention nightly security, inventory control, weather interruption (it’s raining right now in Omaha), cash security and much more.
One of the biggest headaches has to be estimating the season’s inventory needs of the product ordering on containers. Order too little and you miss important sales. Order too much and you have to sit on it for an entire year before you can sell it again. If the container is delayed you don’t just miss the weekend sale, you miss the entire year. All done for ten days in July. The ultimate pop-up store. The furniture business is not looking so bad after all.
Note: If you have a store in a city that allows fireworks, consider putting a tent out front of your store next year. You collect money as the landlord and you also get all the traffic that is stopping to buy fireworks. You could even put a deal together where if they buy $500 worth of furniture they could get $100 worth of fireworks FREE. Drop me a note if you need more info.
And a note of caution — please don’t light any firecrackers with too short of a fuse. I think it was Confucious who said: “Fireworks can be embarrassing. Careless handling can lead to loss of face.”
Happy July 4th.
Steve Lowsky, President/CEO of Middle Market Strategies on what makes a company great now