Buying (and Selling) Success

A student asked me about the risks of opening a specialty food shop and I was able to tell her about my friend Elaine.

Elaine Yannuzzi was one of the most successful specialty food store owners on the East Coast.  She founded Expression unltd. in Warren, New Jersey. At the time there was a wildly enthusiastic interest in what was quaintly known as “GOO’ER-MAY” food. It was fueled by Julia Child, who reigned supreme with The French Chef on public television.

The golden girls of The Silver Palate cookbook (and store) were gaining attention. Martha Stewart was looming on the horizon and dozens and dozens of small kitchen stores were popping up everywhere. Many offered cooking classes, French mustard, Italian olive oil, Belgian chocolates, freshly roasted coffee beans and imported cookies.

Expression unltd. was different.  What made it different is that it made heaps of money.  When the thriving business was sold, a few million dollars flowed into Elaine’s bank account. How did she achieve so much success? She had nerves of steel.

When she walked along the aisles of the Fancy Food Show in New York City, vendors prayed Elaine might stop at their booth.  When she did, she was utterly charming.  She tasted the vendor’s olive oil,  pronounced it excellent. She pulled out her own order form. “I’ll take 66 cases,” she’d say.  Fairly swooning with joy, the vendor beamed.“ He didn’t see the freight train coming.

Next she’d stop at the booth of a Stilton cheese wholesaler. “How much do you have in stock,” she’d ask sweetly. “We’re expecting a new shipment next week,” might be the answer.

“Then I guess you’ll be wanting to get rid of your old inventory?,” she’d muse. “Hmm,“ he’d be wondering where this conversation was going. Then she’d pounce. “As it is nearing its expiration date, I’ll take 78 wheels at a 60 percent discount.”

Stilton cheese lasts almost forever so the customer is more likely to expire before the cheese does.

The cheese seller would be unable to breathe for a moment. But after making a quick calculation and arriving at the conclusion it would be good to make a quick, modest profit, he’d swallow hard, and agree.

“Free freight.” She’d respond primly-Mary Poppins-like as she entered the order on her form. “Gulp!,” the vendor could be heard to gasp.

“And I’ll need a sampling allowance…and an advertising allowance…and 120 day billing!,” Elaine would finish before moving on. Thus she had bought a huge, HUGE quantity of cheese at a price that was, to put a good face on it, pretty close to grand larceny.

When the delivery truck disgorged all the mountains of Stilton, she’d put an ad in the local paper. (Because she was a regular advertiser, the ad was billed to her at a deeply discounted price.)

=STILTON CHEESE=
Regularly $30 a pound
Special Sale
Only $25.95

And the customers lined up to buy it — and all those 66 cases of olive oil that had been “negotiated” on similar terms.  If you’re good at arithmetic, you’ll be able to figure out the profit.

As the BNET Business Network reported, “Slowly, Elaine’s burgundy-and-gray, barn-shaped store in the middle of nowhere became a local and regional tourist attraction and an “in” shopping spot. Epicures from as far as 100 miles away would come to pick up mushroom brushes and elite cookbooks, along with salmon puff pastry, goat cheese, reindeer meat, and margarita-flavored jelly beans.”

Elaine would say, “Whereas the typical food store enjoys stable sales for most of the year, with a “blip” upward just before Christmas, Expression unltd. has stable sales for the first 10 months and then “wild sales for the last two.” That is because, she says, the store so successfully promotes the idea of “food as a gift, food as a special event, food as something that you entertain with at holiday time.””

The moral of this little story is that to achieve success in the specialty food field, or indeed any other venture, you have to learn the ropes and understand how the system works from the inside. Otherwise, every mistake will be a costly one. And, good fortune results from the finer art of buying and selling more  than the ability to decorate the store nicely.