A rug merchant's new strategy for rolling up profits
By delegating some of his day-to-day management tasks, an Oriental-rug merchant has given himself more time to sell.
Owner Peter Pap had showrooms in San Francisco and Dublin, N.H., was a regular on television's Antiques Roadshow, and exhibited his $250,000 rugs at top U.S. antique shows. The profitable company had 2006 sales of $3.5 million.
But Pap was unhappy. His dream? A loan that would help him expand his inventory and boost marketing. Exhausted by administrative tasks, he kicked himself for failing to keep in touch with his best clients. His Web site needed an overhaul, and he sought a simple way to send photos of rugs to clients.
With help from FSB's experts, Pap, 53, is profitably tackling these issues. He says he's better at capturing information from website visitors and those who stop by his booth at shows.
"Now we track the types of rugs people want, we take their e-mail addresses, and we ask if they'd like to get our newsletter," says Pap, whose revenues in 2007 hit about $5 million.
Pap hasn't yet applied for his loan but has paved the way by combining his once-separate San Francisco and New Hampshire firms. This, he says, will simplify his financials for bankers.
Pap deemed it too costly to hire a full-time general manager and marketing manager, as one expert had advised. But he brought in a twice-weekly assistant to tame paperwork as well as a consultant to handle marketing and the website. Pap also opened a small New York City office, staffed with a full-time manager who shows rugs and helps with the dozens of shows Pap attends annually. These hires give Pap more time to sell and lecture to collectors' groups.
Fixing the Web site is proving harder than Pap had hoped. Potential buyers should be able to enter descriptions of desired carpets and get images quickly online. That means putting information and photos related to thousands of carpets into databases. Pap says he could use an IT staff.
When touting his rugs, Pap now stresses their investment value. "Rugs are blue-chip stocks you hold for the next generation. Instead of quarterly cash dividends, they deliver daily beauty and pleasure."