David Rosenthal: commitment

Transcript context

…And he never takes possession of the inventory. It’s fulfilled in real time as he gets the order. The supplier puts it in the mail. It’s great. And again, not always. Sometimes, he gets a box of 500 pens or whatever. He’s doing whatever is going to make him the most money and be the right arrangement, but being an agent is the best way to do this. He starts off, naturally he continues the pen business. He goes from fountain pens to ball points. That’s a big hit. Then he gets into wallets, cigarette lighters, file folders, all sorts of small goods. At first, he’s mostly just doing what a lot of other people are doing at this point in time who are trader-agent types. He’s a traveling salesman. He is going back and forth to Gothenburg and to Småland, and he’s selling to customers that he meets mostly out in the countryside. It’s hand-to-hand combat, it’s ringing doors, it’s calling on his network. Then, though, he gets the idea. He’s like, well I’m getting all my supplier relationships through trade magazines and corresponding by mail. Then a lot of times when I’m the agent, they’re fulfilling the orders by mail. What if I just get into the mail order business myself? These trade publications are a pretty good way to get business for the suppliers. What if I do that? So he starts a product catalog and he advertises it in publications all around Sweden, with the idea being that, oh, rather than just what I’m limited to doing myself, I can now scale across the whole country. I can aggregate a lot more demand. It actually doesn’t matter if I don’t know these people or I don’t go to these parts of Sweden. The suppliers don’t know them either. It’s all going to work the same. He’s also learned at this point that if he can aggregate more and more demand and get higher order volumes, he’s for sure going to get better prices from these suppliers. Now here in the, call it mid-1940s, this is not a new innovation that young Ingvar is coming up with. It’s basically the story of the Sears Roebuck catalog, 50 years earlier in America. This is happening all over the world and there are plenty of other people doing the same thing in Sweden at the time. Once you had enough scale to say, hey, I’ve aggregated a bunch of interesting products, you’ve started making a catalog, you mailed out to everyone, and that was your client base.…

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