From Salvage to Space

When you come to a fork in the road, take it. —Yogi Berra

This is the extraordinary story of a family-owned corporation that bailed out of its half-century-old signature business and took off in a whole new and highly profitable direction.

In 1942, an avid young amateur photographer named Norman W. Edmund tried to locate good camera lenses. But the war had thrown a wrench into the entire stream of consumer and industrial products. After an exhaustive search, he found a source for his lenses.

It occurred to him that other camera buffs may be in the same boat, so the fledgling entrepreneur created a small kit of five lenses and offered them for sale under the name Edmund Salvage. His marketing techniques included a catalog printed on mimeographed sheets and small space ads in Popular Photography, Popular Science and Popular Mechanics magazines.

The little business thrived throughout World War II as Edmund bought surplus optics from the government and resold them to his growing list of customers via his monthly mimeographed catalog. One of his early buyers was in Tennessee and placed substantial orders every month.

With an instinct for what is now known as customer relationship management, Edmund wrote the gentleman, asked what kind of business he was in, and suggested perhaps they could do something together. After several unanswered letters, Edmund got his reply: a visit from Secret Service agents who told him to simply fill orders and quit asking questions. It turned out the customer was Oak Ridge, the government laboratory doing top-secret research for the atomic bomb.

Immediately After the War

Edmund Salvage became Edmund Scientific in the late 1940s and continued to specialize in optics. Edmund made regular trips to Japan, bringing back for sale binoculars and microscopes. The company began to branch off into consumer science, offering educational products for elementary and high school students and laboratories.

Responding to requests from science teachers, Edmund began in 1952 designing telescopes for viewing the heavens. Virtually no one was producing these at the time, and for a happy period the small company had a lock on the telescope market. Product offerings ranged from the most basic to complex models with clock drives and cameras.

During the next two decades, Edmund continued to expand the line of educational science products, catering more and more to the consumer marketplace. He retired in 1976, leaving the company in the control of his son, Robert, who had a degree in finance.

Since schools are in session by day when it’s impossible to study the night sky, teachers began clamoring for a rugged, relatively inexpensive telescope that kids could borrow from school and take home for evening use. In 1976, the younger Edmund introduced the user friendly Astroscan® telescope for the beginning astronomer.

Created in conjunction with private school astronomy teachers, it was designed as a closed system, which meant bubble gum and dirt could not get into the barrel, and it was so rugged it could survive a 5-foot drop.

At a base price of $199, the Astroscan sold at an average rate of 2,000 per year—and continues to do so today. Although a few modifications have been made, today’s version is very similar to what was introduced in the 1970s. In fact, the Astroscan became Edmund Scientific’s signature product.

The Move to B-to-B

Soon after introducing the Astroscan, Robert Edmund realized he was unable to get enough telescope mirrors to satisfy production demands, so he began manufacturing them. Word got around, and the company began receiving highly profitable orders for mirrors from various industries equally starved for the product.

While the Edmund catalog had become the preeminent source for educational science materials, it became clear, that no real future existed for the business. Why? Because NASA, with its spectacularly detailed photographs of the canals of Mars and the rings of Saturn, had raised the bar for the amateur astronomy market. Seen through the Astroscan, these planets only look like white-hot peas.

At the time Robert Edmund joined the company, an attempt was made by father and son, and later by Robert, to grow the consumer side of the business, but it was unsuccessful. In the early 1980s, Edmund Scientific lost money three consecutive years, and Robert Edmund undertook a complete review of the business. He concluded that not much future existed in the consumer area. He discovered the lifetime value of the hormone-ravaged science student was short; kids would order product for a school science project, and then, in the words of the senior Edmund, “I lose my best customers to young ladies.”

On the other hand, the younger Edmund saw real growth opportunities in the high-tech industrial optics area. In the mid-1980s, it was decided to divide Edmund Scientific into two divisions—consumer and business-to-business. It was then that company officials began seriously creating product for the industrial optics market, making use of the many contacts made in the United States and Japan.

Back in 1968, the Edmunds got a national public relations boost when NASA went shopping for a specific lens to go to the moon aboard Apollo 11. Edmund Scientific had the precise lens in stock—and for only 95 cents, which must have delighted NASA in that era of $600 toilet seats and $70 hammers. (Upon his retirement, the NASA engineer responsible for the project presented the Apollo lens to the Edmunds, and it was later featured on the cover of the company’s 1993 educational optics catalog.)

In 1995, Edmund launched a Japanese catalog version, despite objections of the company’s Tokyo manager, a Japanese national, who insisted that trying to sell optics to the Japanese was akin to selling ice boxes to Eskimos. They parted company, and Edmund hired another Japanese national who was more positive. Last year, revenues from Japan reached $4 million.

Sold and Bought

About this time, Edmund began seriously looking for a buyer for the signature consumer catalog so he could invest in the growing industrial side of the business. The decision was not hard to reach considering the following numbers for 2000, the last year

Edmund ran both catalogs.

By the late 1990s, Norman Edmund was long-since retired (he still sits on the board), and Robert’s two daughters had joined the company: Nicole as vice president of marketing, and Marisa as vice president of human resources.

Finding a buyer for the ScientificsTM Division (as the educational part of the business was known) was not easy. The Edmund family wanted to give its creation a real shot at success and growth, while guaranteeing its 220,000 customers would be treated well. A number of Internet entrepreneurs wanted to buy the division, but their interest mainly was in the state-of-the-art fulfillment facility the Edmunds intended to keep.

Recently, the Edmunds signed a deal to sell the division to Science Kit & Boreal Laboratories, a division of VWR Scientific Products. The Edmunds—who then changed the company’s name to Edmund Industrial Optics—now were free to move full bore into the b-to-b world of industrial optics.

Robert Edmund’s first move was to acquire the assets of Plummer Precision Optics, a company that specializes in custom design and manufacturing for military and defense applications—thus opening a whole new market for the three-generation family business.

Many industries and research facilities need precision lenses and mirrors, including medical, biotechnology, imaging, manufacturing automation, communications, automotive, financial, consumer and business electronics, semiconductor processing, computer hardware and software, aerospace, and dozens more.

Lenses have two components: diameter and focal length. Prior to the computer, manufacturers would order a slew of different lenses for the machines they were inventing, using trial and error to find the right component. As a result, Edmund’s 300-page, semi-annual catalog has a large number of matrices of off-the-shelf components’ detailed charts for each kind of lens showing diameter, focal length and price in hierarchical order. With each new customer request, gaps in the matrices were evaluated, manufactured and added to inventory, so Edmund now has about 6,500 SKUs, a virtually insurmountable repertoire of product for a potential rival to compete against.

Today, Edmund Industrial Optics is swamped with Requests for Proposal for custom optics work in addition to its core off-the-shelf optics business. One of the company’s toughest jobs is to persuade designers and inventors that with a slight modification, they can use standard, off-the-shelf inventory at a big saving of time and money. If off-the-shelf product is not suitable for a customer, Edmund will create a custom design.

Among the company’s top challenges is inventory control. Says Edmund, “We’re comparable to any of the great mail order supply houses. Customers expect us to have items in stock, and we do, but it’s tough.”

B-to-B Marketing Challenges

Edmund Industrial Optics is headquartered in Barrington, NJ, with additional research and production facilities in Pennsylvania, Arizona, Singapore and China, and sales offices in California, United Kingdom, Germany, Japan and Singapore. The company has 325 employees worldwide.

Twice a year, Edmund mails more than 1 million copies of its 300-plus-page catalog (really a giant reference manual). The catalog continues to grow as the company adds some 300 SKUs a year. In addition, catalogs are produced and mailed internationally in Japanese, German and in British English. Also, a new niche catalog of electronic imaging components was issued for the emerging machine vision market.

One technique Edmund uses is to include in the front of the catalog editorial material that explains to non-optical experts (e.g., mechanical engineers, electrical engineers) how to understand and order optical components. Under the title, “Application Notes,” this section currently runs 20 pages and is growing.

Both Robert and Nicole Edmund agree that the toughest single challenge for the business-to-business (b-to-b) marketer is finding new customers. When an order comes from a corporation, it’s almost always signed by the purchasing agent. Yet, if they mail the purchasing agent a catalog, they may have wasted $2, because they actually want to get the catalog into the hands of the specifier, the person who tells the purchasing agent what to order. As a result, Edmund can trace only about 30 percent of its customers by name and by list source. Building the prospecting database is thus an extremely important responsibility and relies heavily on post-sale database techniques to match revenues to mailing efforts.

Reaching Prospects Via Trade Publications

“When Nicole was in college and I was exploring the business-to-business world,” Edmund says, “the big marketing breakthrough occurred for us as a company when we started to understand that controlled circulation magazines held the answer. They do a better job than anybody else in keeping lists up-to-date.”

One day, the PennWell salesperson showed up with a proposal to advertise in Laser Focus World and showed the breakouts on its readers. A light bulb went off in Robert Edmund’s head. “Fully 50 percent of its circulation was made up of design engineers—precisely the people we want to reach.” As a result, the company has an aggressive advertising program in trade magazines, and judiciously mails catalogs to targeted segments of its lists.

The Edmund Industrial Optics team also attends 11 trade shows a year in the United States, Germany, the United Kingdom and Japan. At these conferences, Edmund has a presence that not only showcases its products and provides a source for lead generation, but also serves as an application booth where it has enough tools to do basic troubleshooting and actually can solve customers’ problems on the spot.

A Journey into the Past

The Edmunds have been in the same New Jersey corporate headquarters since 1948 and have added to the building during the years. The guided tour is fascinating. It starts with the high-tech research labs and shops where precision lenses are ground and tested, and winds through modern offices and cubicles with the requisite computers, printers and telecommunications paraphernalia.

The tour continues back in time through the original building with glass display cases filled with wonderful antiques: old brass sextants, compasses, ship chronometers, surplus tank periscopes, microscopes, naval binoculars and opera glasses. The company even has a Norden bombsight, one of America’s most jealously guarded secrets during World War II. The tour ends in a storeroom crammed with World War II surplus optics still wrapped in their original government ordnance packaging—all relics from the early days of Norman Edmund and Edmund Salvage Co.

Edmund Industrial Optics is a fascinating company, one that started from scratch and has come full circle, from a ricky-tick little mimeographed sheet to a glossy catalog and, recently, a sophisticated Web site (www.edmundoptics.com). Currently, 8 percent of sales come from the Web site.

This company has successfully navigated the reefs and shoals of the highly complex and competitive waters of b-to-b direct marketing. The Edmund Industrial Optics catalog is well worth getting your hands on and studying as a textbook example of high-tech marketing to high-tech customers.

Denny Hatch, consultant and freelance copywriter, and author of “Method Marketing” and “2,239 Tested Secrets for Direct Marketing Success,” can be reached at www.methodmarketing.com or dennyhatch@aol.com.

Edmund Industrial Optics List

312,738 Total Buyers & Inquirers $120/M
157,255 Buyers +$5/M
19,551 12-Month Buyers +$10/M
155,483 Inquirers $95/M
Average Unit of Sale $1,000
105,632 Total Buyers & Inquirers $250/M
40,000 Total Buyers Industrial
14,000 12-Month Buyers
Average Unit of Sale $620
Contact: Michael Murphy, Edith Roman High Response Lists, (845) 731-2682