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The Right Stuff

[ 0 ] Jul. 1, 2013 | SBO Editor

$2.6 million a year for biz that sells parts, gadgets and what it calls “stuff.”

By Stan Roberts

Since 1974, an Orlando, Florida, family has owned and operated a highly successful business that sells “stuff.” We call it “stuff” because that best describes an astonishing conglomeration of products sold by Skycraft Parts & Surplus Inc.

Here’s a sample of the 6,000 items Skycraft stocks in bins, overstuffed shelves and aisles: Electronic and computer accessories, surplus, automotive parts, fans, hardware, tools, clamps, hooks, screws, rivets, O-rings, springs, relays, switches, webbing, wiring, rope, shock mounts, motors, pumps, lamps, light fixtures, washers, test equipment and transistor parts.

Skycraft acquires its inventory from many sources: Government surplus, auction houses, shuttered businesses, wholesalers, bankruptcies, customers, other surplus dealers around the U.S. and its customer, said Mike Juett, vice president.

Every day except Sundays, 500 to 600 hobbyists, model builders, do-it-yourselfers, mechanics, business people, tradesmen, artists, computer whizzes, audiophiles and curiosity seekers wade through the 6,000-square-foot warehouse/showroom. It markets mostly by word of mouth, its website and its attention-grabbing sign out front displaying replicas of a flying saucer and missiles.

“They’ve got stuff you can’t get find anyplace else,” said Jason Goodowens, a typical customer who refurbishes everything from computers to kids’ scooters.

The average purchase is $18, but many sales are rung up for spare change. You can buy a 3/4-inch washer, and nobody will laugh. “It’s a nickel-and-dime business,” said Allen Fiedler, company president and son of its founder, Robert Fiedler, “but it adds up.” Last year, the company posted sales of $2.6 million, its best year ever.

Robert Fiedler never dreamed his hobby would mushroom into an enterprise like this. He was a retired Steak ‘n Shake executive who built remote-controlled boats as a hobby. His search for hard-to-find parts led him to Sam Skinner, who sold assorted doodads from a truck and stored them in a 2,500-square-foot building.

Skinner’s hodge-podge operation intrigued Fiedler. From personal experience, he knew how hard it was to find project-completing thingamajigs, and he thought a place that sold them could be profitable. He struck a deal with Skinner: Fiedler took over the building lease and bought the truck, trailer and inventory for $20,000.

Fiedler and his wife, Dorothy, and one employee organized the store, built shelves, stacked products in bins and then set out to find inventory. The key to the business, they realized, was knowing what to buy and how much to pay for it, said son Allen, who worked in the store after school. “Government surplus was a starting point,” he said. “Dad got certified to bid at military bases. We’d buy anything the government wanted to get rid of. But we never buy anything unless we have a market for it.”

Fiedler pored over classified ads, raced to store close-outs, bankruptcies, auctions, snapping up things customers could use for businesses, home projects or hobbies.

They work backwards to determine how much to pay for products. “We estimate what something will sell for, subtract costs—transporting, loading, unloading, unpacking, sorting, pricing, etc.,” said Fiedler. “Then we mark it up three to five times.”

Juett, who joined the business in the late 70’s, said the company learned early on that customers’ value extended beyond their purchases. “Our customers tell us what they are looking for—and what they’re not interested in,” said Juett. “They also show us how things work, and this helps when we’re selling to other customers.”

The company also buys lots of stuff from customers. As an example, Bill Kahn, a retired Martin Co. engineer, built 100,000 auto buzzer devices and sold 97,000 to dealers at $1.90 each. “I was stuck with 3,000,” he said. “Skycraft bought them for 30 cents a piece.”

Not surprisingly, the company constantly restocks its shelves. “Customers know our inventory,” said Fiedler.

From 37 years experience, Fiedler knows what to look for, where to find it, and what to pay for it. Last year, for example, he visited a shuttered electronics wholesaler and bought 40,000 pounds of connector wire. “We paid 50 cents a pound—$20,000 cash,” he recalled. “We sold it quickly for $100,000, less costs.”

Strolling around a Las Vegas boat show, Fiedler stumbled on a trailer-load of boat speakers. “We offered $45,000; they took it,” he said. “We sold it for $145,000, less costs.” If items don’t sell, Fiedler said he contacts surplus outfits that will take them.

Fiedler bids at auctions around the U. S., usually against 40 or more competitors, and does well.

The company, which moved to its present location in 1978, has been in the black since first-year sales of $47,500; they reached $1 million in 1987.

Stan Roberts is a Contributing Editor.

SKYCRAFT PARTS & SURPLUS AT A GLANCE

The company is located at 2245 W. Fairbanks Ave. Winter Park, FL 32789

What: Sells parts, components, electrical accessories, gadgets, hardware.

Founded: 1974 by Robert Fiedler. Assumed building lease, bought truck, trailer, surplus for $20,000.

Current sales: $2.6 million

Forecast: Add 500 to 700 sales a day through Internet.

Contact: 407-628-5634

www.skycraftsurplus.com

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Category: Magazine, Start Your Own Business, Start Your Own Business Fall 2013