From the East Bloc and Beyond

To say Sovietski Collection catalog has a unique niche would be an understatement. Indeed, a quick flip through its pages is like taking a whirlwind trip around the former East Bloc.

Its product selection includes militaria, such as Soviet MiG pilot helmets and copper diving helmets, Russian submarine clocks, East German tank commander binoculars and field phones. There’s also hand-crafted Polish sabers and Czech walking sticks, Lomonosov porcelain tableware, Romanian crystal goblets and Russian-made woolen shawls.

The catalog even features a genuine Soviet “Strizh” spacesuit complete with communications helmet and umbilical life-support interfaces.

Sovietski sells merchandise and artifacts sourced primarily from Europe and the central Asian republics of the former USSR, but it specializes in products produced during the Cold War under state-planned economies. After the Soviet Union’s collapse, many of these products came onto the market, and Mitch Siegler, president of the

San Diego, CA-based Sovietski Collection catalog, has brought them to American consumers.

“More than 80 percent of our product offerings are unique to our catalog,” says Siegler, who does double duty as chief buyer. “We tend to avoid products that are sold by the millions.” Instead, he seeks items that often are problematic for other catalogers, such as heavy or bulky merchandise that’s difficult to ship, products that need long lead times and limited-edition items. “Our product selection, no doubt, has helped us remain competitive,” says Siegler.

The catalog’s primary customer demographic is comprised of 35- to 55-year-old men (which means they grew up during the Cold War). In addition, customers are interested in history, and have traveled or served overseas at some point, says Siegler. The housefile, available for rent through list broker Walter Karl, includes 50,000 12-month buyers and 80,000 24-month buyers.

Sourcing, Sovietski-style

Siegler’s partner, a Moscow-based company, helps him locate and source interesting and salable merchandise from Russia. Siegler also has developed a wide network of dealers from all over the world—and primarily in the former Soviet states—who know what he likes. “They call us whenever they find surplus items in a warehouse,” he says.

One story in particular shows just how unusual Siegler’s sourcing channels are. From 1997 to 1999, the Sovietski catalog carried a line of intricately carved and embellished silver tableware that came, literally, from vaults underneath the Kremlin on Red Square. The 20- to 40-year-old items once belonged to the Soviet government and had been stored behind bullet-proof glass and under the protection of guards carrying machine guns.

“We bought the tableware in lots by the gram,” says Siegler. “Some pieces needed reconditioning, and some were in pristine condition. We bought them directly from the Russian government, which wanted to unload them for cash. The items were being sold as scrap tableware.” He says the merchandise sold extraordinarily well in the catalog.

Siegler also frequently visits European and Asian craftspeople, such as porcelain and crystal manufacturers, to learn more about their factories, production methods and offerings. Product planning for the catalog can be difficult, Siegler relates, given that much of the merchandise is available in only limited quantities. The solution? Careful planning—which he admits has been challenging at times. “Last year we offered a tin soldier figurine on horseback that apparently we sold for a price that was too low,” Siegler recounts. “We were inundated with orders, mostly from collectors who realized it was an incredible offer.”

Siegler asked the overseas manufacturer, a small handicraft company, to increase his order size. But the owner said his tiny group of artisans could produce only five to 10 items per month. “We pulled the product out of the next catalog,” says Siegler. “We may order the items again, and stockpile them in our warehouse until we have enough to fill projected orders. But it’s tough to know how much to order with some of these unique pieces.”

Informative Selling

Product sourcing is not the only challenge. Oftentimes, the items need lengthy informative copy in order to attract buyers. For example, the following text describes Russian Orthodox three-tiered crucifixes, selling for $69 each:

Russian Orthodoxy is renowned for its powerful architecture and compelling imagery. Perhaps the most distinguishing Orthodox symbol is its unique three-tiered crucifix with foot beam. Cast in solid bronze and decorated with hot-baked enameling, they’re loaded with symbolism—the holy visage and angels at the top and the skull and bones (representing mortality) at the bottom. (In the Soviet era, the crucifix with side panels was used by Ukrainians to represent the tryzub, an outlawed symbol signifying their desire for independence.)

Each catalog page depicts five or six items, and merchandise is grouped around categories such as:

• “Old Arbat Street: Moscow’s Antique District,” which features Russian art and artifacts;

• “The Hunt for Red October,” nautical merchandise;

• “Great Gear,” Soviet-era military items;

• “Spy vs. Spy,” surveillance paraphernalia;

• “Reach for the Stars,” aviation and aerospace artifacts;

• “Museum Treasures,” porcelain, apparel, jewelry, home decor; and

• “From the Tsar’s Table,” glassware, flatware and china.

Price points range from a few dollars for a leather map case, a china plate or an antique Soviet medal, up to $19,950 for the Soviet spacesuit, which is one of only 18 such suits ever manufactured, according to the catalog copy. Most items range from $50 to $250, and the average order size is $115. Top selling product lines include instruments/optics, timepieces and tabletop merchandise, such as crystal and porcelain.

From Exporter to Importer

Siegler started the company in 1992, following the dissolution of the former Soviet Union. “I began traveling to Russia with the intent to sell branded U.S. merchandise to the Russian government and its people,” Siegler recounts. But the nation’s erratic inflation rate and its inadequate transportation infrastructure at the time, he says, made the potential endeavor unprofitable.

“So we began looking around for Soviet-made products to import into the United States instead,” he continues. “We brought in some products made by the larger former military factories and some handicrafts and sold them wholesale to companies such as Nordstrom and Pier One.”

By 1995, popular interest in his product line was growing, says Siegler, so he switched gears from a wholesale supplier to a direct-to-consumer retailer. He printed an eight-page catalog, opened a Web site and sent out press releases. Siegler also tested space ads in vertical market publications. For example, he promoted a cosmonaut wristwatch in magazines such as Aviation History and Flying.

Today, Siegler’s operation employs 55 people; mailed 5.5 million Sovietski Collection catalogs last year in 10 installments; and recently established a second catalog, Treasures from a Bygone Era, aimed primarily at women. Treasures merchandise includes apparel, jewelry, home decor, glassware, china, flatware, framed prints and artifacts.

About half of the items sold in the new catalog were moved over from the Sovietski catalog, while the remainder are special to Treasures. And with the new catalog, Siegler expanded his purchasing universe to include Western European and U.S. sources and manufacturers. However, all the merchandise features that Old World flair that has come to define the cataloger.

The first Treasures edition, with a drop of 300,000, mailed in the spring. Siegler wouldn’t reveal sales results, saying only “they look good so far.” In all, he plans seven mail drops for the new catalog this year. Its prospect list came from the housefile and lists of home decor and gift buyers.

When prospecting for the Sovietski catalog, Siegler says his marketing team uses cooperative databases, rents targeted lists and places space ads in publications such as Sailing and Retired Officers, magazines read by those in the catalog’s target demographic. “We tried targeting prospects by ethnicity, such as Russian or Eastern European,” says Siegler, “but we found the data quality for that was not as good as we’d hoped.”

In all, Siegler says about 25 percent of each Sovietski mailing is comprised of current customers, while the remaining 75 percent goes to prospects culled from the sources noted above.

Cyber Hunting

Currently, about 15 percent of customer orders are placed through the Sovietski Web site, although Siegler says he wants to increase the percentage to 25. The company’s URL (www.sovietski.com) appears on the cover and on every spread within the print catalog, helping to drive traffic to the site. Specials available only on the site also help boost Web response.

Once orders are placed, customers receive a series of e-mails confirming their orders and detailing their shipment status—not a novel business practice, to be sure. But Sovietski uses an irreverent, humorous tone that undoubtedly entices customers to anticipate the e-mailed communiqués.

For example, a recent e-mailed shipping confirmation stated, in part:

Glorious Comrade, We’re pleased to provide you with this report, as we crawled under barbed wire to rescue this merchandise in the first place and then transported it to our heavily guarded warehouse inside the cargo hold of a Russian Naval vessel (a.k.a., “fishing trawler”).

International packages shipped via USPS Air generally arrive within four to six business days depending on the destination. To ensure safe passage of your package during this journey, we have dispatched a crack team of Spetznaz commandos, armed to the teeth and trained to lay down their lives to protect your parcel.

When we are certain your package is safely in your hands, we will break out the vodka and toast to your health, happiness and another successful delivery. (The party is sure to last late into the evening.)

E-mailed messages are changed periodically, says Siegler, “just to mix it up and have some fun.”

The Sovietski marketing team also conducts frequent e-mail marketing campaigns to the catalog’s housefile. Less successful, however, have been the team’s e-mail marketing tests to prospects via opt-in lists. “We’re not giving up on that yet, though,” says Siegler, adding that he’s encouraged by the gradual reduction in rental prices for opt-in e-mail lists.

Day-to-Day Operations

The company’s 13,000-square-foot headquarters in San Diego houses most of its employees, including warehouse personnel, call center reps, graphic designers, production staffers, Web masters and accounting personnel. While 9,000 square feet of the space is dedicated to warehousing, Siegler says this is sometimes not enough, so he leases storage space in a nearby facility as needed.

“We can store the overflow merchandise in the nearby warehouse on a variable monthly billing basis. So we pay only for the space we’ve used that month, which helps us avoid adding to our physical infrastructure if we don’t have to,” he says. For shipping, the staff uses a Pitney Bowes manifesting system that calculates the most cost-effective way to mail to an address. Current courier services include UPS, Airborne@home and FedEx.

By keeping his eyes—and his mind—open to new ideas, Siegler is one cataloger who saw business opportunity amid the political upheaval of the fall of the Soviet states, and is today enjoying the fruits of his labor.