Small Business & Constant Risk
Musings on survival of small business, risk and reward, and a bizarre livelihood dependent on sewing machines.
In the 1990s and early 2000s, one could argue that Pfaff produced the best sewing machines in the world. For a long time, the vast majority of their machines were manufactured in their original factory in Kaiserslautern, Germany—the same town where the company was founded in 1862. Most machines featured Pfaff’s patented integrated dual-feed system, as well as an industrial-style vertical hook that created a heavy, sturdy feel when sewing. They were extremely well-built and loved by many sewists all over the world.
My father, Dan Schoenberg, was a huge fan of Pfaff. The year was 2002, and he had been a certified Pfaff dealer for over 20 years. However, Pfaff had recently been bought out by Viking in 1999, and rumors had it that more changes were coming. Pfaff’s longtime factory in Kaiserslautern would soon close its doors, and Viking would soon be bought by Kohlberg and Company, an American private equity firm that purchased all of Singer, Pfaff, and Viking between 1999 and 2006.
Seeing these changes on the horizon, my father sought out his Pfaff sales representative, a fellow named Helmet. Together they sat down and waded through some numbers until they were able to come to an agreement. A handshake deal was made, in which my father bought 100 units of his favorite machine in the world at the time: the Pfaff 7550. Because my dad purchased 100 at once, Helmet was able to sell the machines to him at $1,000 apiece. My dad priced them in his shop for around $2,200. Eventually, he sold every last one.
During the time I have worked for my dad, my respect for him has grown tenfold as I come to understand the inherent risk he takes on a daily basis as a small business owner. When he places an order for a machine, the manufacturer ships the order to the shop, and my dad has X amount of days to pay the manufacturer. Depending on the manufacturer and the size of the order, the time he has to pay the bill in full ranges from approximately 30 to 90 days.
Now, 30 to 90 days is no sweat if you’re only ordering 1-2 machines at a time because there is a good chance that you will sell those machines within that timeframe. In other words, there is not a lot of risk. Even if you don’t sell them, you’re only down a few thousand dollars, depending on the machine. But my father rarely buys 1-2 machines at a time. When he places an order, he tends to buy in bulk out of principle: 100 Pfaff 7550s, 38 Bernina 740s, 20 Janome M7s, 16 Baby Lock Triumphs, etc.
Personally, I still get nervous when facing a massive stack of unsold machines. It’s difficult for me to imagine that we could ever sell them, like a baby who has yet to develop object permanence. The guts it takes to tether one’s livelihood to sewing machines... 100 Pfaff 7550s machines at $1,000... we can all do the math in our heads. What happens if he can’t sell them? What happens if people stop buying machines and the shop goes out of business? You can’t eat sewing machines. They don’t work as firewood. The bank won’t take them as payment for your mortgage. Those 100 machines are worthless unless they can be sold. You pay for them, you own them, and it’s all on your shoulders to sell them.
Why do it this way? Why not buy one machine at a time, or order them from the manufacturer after you’ve sold one in the store? As you might guess, there is a serious incentive to increase profit margin:
He can often get a better price per machine if he buys in bulk. For example, Machine Model X costs him $1,000 if he orders 1-3 of them, but only costs $900 if he buys 4-6, and only $850 if he buys 7-10.
He gets free shipping if he orders in bulk. For example, Machine Model X costs him $1,000 if he buys 1-3, plus he has to pay $50 shipping per machine. However, he gets free shipping if he makes an order of $8,000 or more, so he orders 8 units of Machine Model X in order to get free shipping.
Sometimes the manufacturer will have certain promotions if you buy in bulk. For example, buy 3 units of Machine Model Z and a 4th unit of Machine Model Z for free.
There are all sorts of unseen costs that can drain a business—rent, employee wages, employee insurance, internet, electric, heat and air conditioning, shipping and handling, website fees, credit card processing fees, financing fees—the list goes on forever. In the face of all that, it’s a constant battle of taking risks to increase profit margin. All these factors cut into the business’s bottom line. You’ve got to make it back somehow, so you buy 100 Pfaff 7570s in one fell swoop. You live to see another day, and the longer you can do that, the longer you stay in business. The longer you stay in business, the better established the business becomes. Then you cross a threshold, and the business in many ways starts running itself.
In 2024, it’s fair to say that my father’s business is well-established. The Sewing Machine Shop is over 35 years old, older than I am. These days when he buys 38 Bernina 740s, he doesn’t hope he’ll sell them eventually—he knows he’ll sell them. Time and time again, everything sells eventually. Like I said earlier, I’d be a liar if I didn’t admit that a warehouse of unsold machines makes me a little nervous. I can’t believe there are that many people out there in need of new sewing machines, but I know that I underestimate the popularity of sewing and this niche sewing culture I’ve yet to fully grasp. I think I also underestimate the power of a well-established, honest business with a stellar reputation over a 35-year period.
Something I think about as a double edged sword. . . .
On one hand I’m glad that I don’t have to deal with the stress of taking such risk to get the business off the ground. On the other hand, the corny platitude “stress makes diamonds” rings true to me in this scenario. One achieves a certain level of high character trough navigating those waters. As Morgan Freeman says in Shawshank Redemption, “Andy Dusfresne crawled through a river of shit and came out clean on the other side.” My dad has done that. He’s a hard worker, he has belief in his capabilities, and he has guts. He also has a sense for quality (inherited from his father, Ramon), and he has pride in selling quality products and supporting those products, which has allowed him to build something from nothing, build it on a strong foundation, and then fortify the business further through exposure to risk. Any reward he reaps is truly earned. It’s beautiful.
Thank you for reading.
I spoke solely about my father in this article, but I’d be remiss if I didn’t acknowledge my Uncle Marty, who started fixing machines as a toddler and opened the shop with my dad in the 80’s. I’ve written couple other articles that feature him more prominently, one of which you can read full by clicking on the images below:
Cale, these mini essays are delightful both because they provide insight into a part of the world of sewing that most people don’t think about, and because they are so charmingly written. Keep them coming!
Cale, I recognize the handbook for the Viking sewing machine from the Berkeley Sewing Machine Co. I worked with Marty back then and I drew that picture! I would love to see that booklet if you still have it. Please say hello to Marty when you see him next and of course Dan, too.
Ellen Hauptli