Two years ago this month the inevitable happened. The world economy collapsed. As I prepare this year to go forward from October through December I can’t help but look back on the last two years and remember everything that happened.
For me, the recession really started the first week of October, 2008. DHL, the worldwide delivery company, decided to pull out of the domestic delivery business in the fall of that year. The summer of 2008 was when gasoline went up to $4 and $5 a gallon at the same time the shipping business was falling off the proverbial cliff. The company that handled my shipping switched me from DHL to UPS. A seemingly routine activity, but it was this move that caused me to remember exactly when “it” happened.
I’d been shipping with DHL for about 4 or 5 years by this time. Every day I had at least one package going out to far flung parts of the country with billable work inside that I’d repaired. I don’t think a day went by that I didn’t have a DHL pickup scheduled at my business for a couple of years.
Then October happened. The week I was switched to UPS I didn’t have a single package to ship. In fact, it was 15 months before I finally shipped my first UPS package. Yep, you read that right. 15 months. It was so long that when I finally needed to ship a package I didn’t have an account anymore due to dormancy.
At the time the recession hit me, I was servicing about 18 accounts across the country. Unfortunately, not one of my accounts escaped the recession. One of my accounts went from 75+ repairs a week to 3... and he was the lucky one.
My inbox which averages about 100 jobs at any given time now averaged less than 10... a week! For a shop that had been operating at 100% capacity for the better part of 25 years, that’s a lot of twiddling your thumbs to do to get through the day. But I know I wasn’t alone. As I talked to my accounts in all different regions of the country, the story was the same... despair.
In the 30 years I’ve been in this business I’ve survived a few recessions and seen countless economic downturns, but none of them had the job losses that “The Great American Recession” produced. During all of the previous hard times, the repair business would slow down a little, but not stop. This time it stopped! That was an eye opening experience since that’s what constitutes the majority of my income. Yikes!
Unless it was food, medicine, rent, or utilities, it was getting cut out of the budget. Hell, I did the same thing too. We were all in the same boat and money just stopped flowing.
All of my friends that owned pawn shops were running out of money too because no one was buying, everyone was selling. Their shelves were full, their bank accounts weren’t. The first week of October, 2008 was the first time in years that I didn’t ship out one single package. By the first week of November, I knew something was wrong because I hadn’t sent or received a package in over a month. Uh oh, this is going to get ugly... and ugly it got. But, lets fast forward 12 months to October 2009.
A year later things were better, but by no means were they good. The severe job losses were slowing down so if you had a job you were mostly safe, but everyone, myself included, was still hoarding cash. The Christmas season that year wasn’t the worst one in my company’s history (that record belongs to Christmas 2008), but it did go into the record books as the second worst in company history. No reason to stock the shelves if you don’t think you’re going to empty the shelves. So, Christmas came and went with a whimper.
January 2010 rolled around and somehow I was still in business. How, I don’t know because I’d been bleeding money for over a year now - but I was. But now I had some serious decisions to make... we all did. None of us could go much farther at this rate. By now I’d been hitting savings for 15 months just to keep the doors open. All I can say is thank you Lord for Facebook because it gave me something to do between that one customer at noon and quitting time at 6.
Then one day it changed. I called a friend of mine and proclaimed I had just had a “normal day”... my first in almost 2 years. Normal being defined as the mailman brought a package and a check. UPS brought a package. A customer came in and dropped off a $500 repair. About 12 people came in for watch batteries, and I sent out a package with about 20 completed repairs. That was my first day to break even in forever. Then the next day I broke even again, and again, and again. Just as quickly as it stopped, it started again. No rhyme or reason to it, it just stopped sucking.
I’m not operating at 100% yet, but I’m not at 10% either like I was for a year and half. It’s more like 110% two days a week and 50% on the others, so I’m feeling a lot better about things.
The old saying; “Luxury businesses are the first to go and the last to recover in a bad economy” is so true, and I really think we’re starting to recover. Across the country, the repair business is picking up again which means people are finally coming into jewelry stores again for the bread and butter items like repair. I think this Christmas season is probably going to be pretty decent. Heck, I may even quadruple my numbers from last year... another company record.
So, here we sit, October, 2010. What are your thoughts on this Christmas season? Are you planning on knocking it out of the park this year or hunkering down and surviving it like I did the last couple of years? Write to me and let me know. If you got pummeled (like me) by the economy two years ago and are finally pulling out of it, let us know. I think all of our colleagues across the country could use your perspectives to help them steer through the final stages of the recession.