Announcement from Arc Euro Trade Ltd.

Twelve years ago, my main business as an international broker for bearings, textile printing machine spares, related dyestuffs and chemicals took a nose dive for a variety of reasons, and ARC lost a bucket load of money, to the verge of bankruptcy.

With the help of my banker at the time (yes my bank did help even when I was near bankruptcy), and with the help of many friends in the U.K. and overseas, I started this part of ARCs business, which is based on the principal of investing in stock and taking payment before dispatch….because giving large amounts of open account credit is what killed me originally.

Back then, the internet was not anywhere as developed as it is now. S***bay and S***pal were nothing significant, and the world was still a smaller place. The word at the time was ‘mail order’ and not web sales or e-sales!. Mail Order meant that I had to give out catalogues. With this in mind, we printed our first leaflet – my first catalogue .

I approached the Midlands Model Engineering Exhibition at the time. They told me that they had to maintain a balanced show, so I had to show them exactly what I had in mind, before they could consider my application for a stand. They accepted my proposal and gave me a stand. Thanks to them, Mike Chrip, Roy Darlington and other key figures in ARCs history, visitors to the show started to get to know us, slowly gaining trust in our company. For this, I am always grateful to the Midlands show and other shows, who helped me to establish and maintain loyal customers.

Back then, profit margins were great. In fact, I can clearly remember the day when one year – in October 2003 I think, we had made fantastic profit at the Midland show. I was well over the moon. Ask the regular security guards Richard and Ken at the Midlands Show – they will tell you.

Over time, S***bay, S***pal, general internet grew stronger to what they are today. Margins have suffered as all us competitors have grown over time, and new competitors are born every day, be it legal entities, or illegal tax avoiding operations namely on S***bay and S***pal, against whom we have to compete.

So, at some point, something has to give, which is always a difficult decision for any business to make.

Ketan at ARC.

Edited By Ketan Swali on 22/09/2012 12:06:00

Hi John S,

I have no axe to grind on this discussion, I miss Ketan and Arc at the show but understand and respect his decision. Apart from actual show sales though his demonstrations of CNC and display of goods etc may have generated business down the line, who knows, only careful analysis could show that. 

Perhaps it's not always about direct sales, it is a show after all, not a market.  I have bought a fair amount over the years, but only relatively small items at shows.  I often go to compare and inspect items then go away, reflect on what I have seen, make my decision and then buy, If I have no chance to make a comparison I probably would not consider buyng a particular item of equipmen from a particular supplier.  I am sure that there are many others like me who use a show as an opportunity to see what is on offer in order to help decision making.

Just another comment, I live on an almost straight line between Syston and Meridienne, just about halfway, and it's 22 miles to Syston and 20 miles to Meridienne. Just a bit more in total than the 'not 30 miles' that you say. A small, perhaps pedantic, point but some may question your accuracy on other matters if you are that inaccurate on distances.

Best regards

Terry

Edited By Terryd on 22/09/2012 12:15:34

Edited By Terryd on 22/09/2012 12:16:46

Agreed Terry,

So considering that you are only 22 miles from Syston, you really have no excuse for not visiting us to look at products, any time of the year....and as always...we will throw in a cup of tea,especially for you

By the way, It is John and his son who do the demos on our stands at the shows. Another costly cross I have to/ sorry had to bare...In turn, after seeing the demos, some of the potential buyers, especially the Irish - regular as clockwork, try to bypass us and go to SIEG directly to try and buy the CNC machines!....we have one of these every two weeks!!..especially as the prices go up.

Ketan at ARC.

Edited By Ketan Swali on 22/09/2012 12:33:43

Hi Ketan,

I get up as often as I am able, in fact I intend to buy another C0 to replace the one lost in my fire a couple of years ago, so you will see me quite soon, but you never seem to be there at the same time as me .

I can of course sympathise with your dilemma, and as I said quite understand your decision, it's just a shame I won't be able to peruse your stands again. C'est la vie regrettably. I'll hold you to the promise of tea nest time I visit.

Hmmmm Seig direct, I hadn't thought of that!!! -Just kidding ,

Best regards

Terry

Edited By Terryd on 22/09/2012 13:08:20

Terry you are correct.

It was 42 miles in the old van but due to improvemnets in diesel technology it's only 30 miles in the new truck.

John S.

Hi John,

I only have an old Hyundai so it feels even further . I'll miss your smiling face at Meridenne though,

Best regards

Terry

I'll be smiling even more.

Now get the chance for the first time in 8 or so years to go to the Stafford bike show that weekend and it's always clashed. Always been a wallet heart rendering decision but talking coin off Ketan wins every time.

John S.

Ya, but what these clever people dont know is that they get referred to me, I consider their request and advise SIEG what I think should be the reply to them.... But then, in these clever peoples minds, we are ONLY a distributor...and the Chinese are stupid and only see US Dollar....Whilst this may be an issue for small Chinese companies,...the concept of distributor loyalty is slowly starting to be understood by larger companies such as the SIEG Group.

Ketan at ARC.

Ketan;

I don't think people realize how global this global market is.

That's good and bad; the "bad" is that both you and I are competing against countries where cost of existing is a lot lower. Your competitors are not Warco nor Chester, but the sellers from other countries.

My "sideline business" is App writing, where I have to directly compete against not only those who live in countries where the cost of living is a lot lower, but against a 90% piracy rate. Needless to say, even trying to get people to spend 99p on an app is difficult, so I expect your business is even harder.

Edit: hmmm - on re-reading, the above sounds depressing, and it was not meant to be. The good is that it makes our economies stronger; over here in North America, the current buzz-word is "reshoring", which is the opposite of "offshoring", and local manufacturing is making a comeback.  I don't think that stratospheric wages that some segments over here currently make will continue, but the reshoring will give us an interesting change.

John Alexander Stewart.

Edited By John Alexander Stewart on 22/09/2012 17:27:30

I totally sympathise with Arc Euro from the economic point of view particulary on the website downtime. They are not the only supplier that has dropped out from the show circuit over the years. However, would it not be a working idea to come as a demonstrator to showcase their CNC stuff. If they ran a preordered/prepaid pickup service along side this, the extra sales generated could go some way to offsetting the costs. Perhaps the shows organisers could give them a display rate instead of a trade stand rate. Any comments?

Martin

Martin,

We did the display and demonstration idea at Harrogate. It was relaxing and great. First time I every got to talk with people without any rush. We didn't do the preordered/prepaid pickup service along side this. Based on previous years experiences, this does get messy for us to handle.

We have a limited budget for advertising. This year our catalogue No.8 came out just before the Harrogate Show, which has to be paid for, along with the costs of the stands at Harrogate. So, no spare budget to consider any other shows. The costs are not just limited to the cost of the stands. Even if the show organizer gave us the stands for free, there is labour and transport to consider. For the CNC demos, the labour is sub-contracted, and past experience has shown that the return on this investment from these demos is limited to good will flag flying. Very little business is generated as a direct result of the demos at the show, be it short or medium term.

Ketan at ARC.

As always, this is a difficult one as both sides of the argument are on display.

it does lead one to wonder if the days of exhibitions are numbered for the reasons Ketan states.

I am fairly new to this game and rely on these exhibitions to see whats on offer 'in the flesh' as it is not easy just looking at photographs on a web site or in a catalogue.

While I may not purchase a large expensive item this way, at least it gives me the opportunity to browse things in a physical sense before going on to purchase on line. I have considerably more distance to travel to get to any of the major supplies like ARC.

I can however appreciate that for some traders it is not economically viable in some circumstances and you are after all trying to run a business and make a living.

I just hope that other traders do not follow suit, it would be a sad day indeed.

Thanks for the reply Ketan.

Now I think back it was just demo only at Harrogate. It's nice to get an insight into the issues that you face. We all want to see the survival of suppliers to our hobby especially in these somewhat economically stretched times.

regards Martin

I think it depends apon the business model.

I did describe how I thought various suppliers approach their markets, but i think it was unfair to do so, so I deleted it.

Suffice to say, I think there are lots of strategies to stock type, pricing, IT, staff levels and training, customer support etc. so many different approaches to shows.

Personally what I notice is the difference between the welcome when you visit/phone the suppliers:

Polly - show you round even though they are in the middle of relocation

Arc - Ketan demonstrates the latest bit of kit and seems as excited by it as you are.

Rotagrip - delight in showing you round even though it's clear your in the market for HSS toolbits not industrail milling machines

Warco - Roger Warren sends you a spare part for a machine he din't even sell you (I heard later it was his last one too).

Chronos - exchange item supplied in error without question.

A. N. Other well known supplier in the rural midlands - have a row with a customer over the phone then come and tell you how many customers they fell out with like that. I suppose they think they are better off without customers like that.

Joey

Martin,

In my opinion, most model engineering suppliers are in a reasonable condition in this economic climate. I guess that every one of us is keeping our head down, applying our own stratigy for the future, and getting on with it.

At present, the problem is more acute in the Radio Control hobby market from what I can see.

Ketan at ARC.

You are right in the sence that it is difficult to compete with international illigal tax avoiding set-ups on s***bay. Thankfully, the U.K. Government has recently set up a task force to deal with U.K. tax evaders, where they are getting co-operation (for what it is worth) from s***bay. The U.K. problem is not as big as the international problem though. Still, I have to say that business is reasonable for us as we learn to adapt with the market conditions - so still not as challenging as it is for the Radio Control model market.

Reshoring is a great idea. The tide is starting to turn, but how long it will take is anyones guess. Our challenge at present is to find a skilled fitter/turner/miller to take over from our main engineer Geoff, once he retires. We have plenty of ideas for reshoring work, we pay reasonably well, but trying to find a person with the skills, knowledge, interest in engineering, someone who also like to do this as a hobby and is passionate about it, is a big problem, especially for a small company like ours.

Most people we have seen so far are either production engineers - used to doing one job only, or CNC button pushers (I say this in a respectful way), people who just have a few years left to retirement (some of the lifting work can be an issue), or finally....people who want to work at Rolls-Royce - nothing wrong with that becasue it is seen to be a better job security option then working for a small company such as ours.

Ketan at ARC.

Edited By Ketan Swali on 24/09/2012 15:44:54

Edited By Ketan Swali on 24/09/2012 15:47:38