We all know at this stage that modern technology alone doesn’t make or break a business. However, if an enterprise has the right elements in place, such as strong products, the developments of the information era can play a huge role in growing the business. The example of Grupa Edman Teo (Edman Group Ltd.) is a case in point. For a small company situated in the Cork Gaeltacht, online sales have enabled it to have a global reach.
The company, which specialises in the production of model figures, has an unusual and fascinating history. Founded in Sweden in 1958 by Jan Edman, the company first manufactured and distributed model railway accessories. It later moved into the field of model soldiers. The first moulds were made from plaster of Paris, a material that gave a very fine definition, but was also very fragile. It was also limiting with respect to the designs and only moulds for half round figures could be produced. It was not until 1965, when rubber moulds were introduced, that fully round figures could be contemplated.
It was this move to rubber moulds that was one of the main reasons for the company’s decision to relocate to Cork. Since 1976 Grupa Edman Teo has been operating out of the small village of Cill Na Martyra in the Muskerry Gaeltacht. The factory it purchased there was an old slipper factory, which still had its vulcanising equipment in place, making it ideal for switching over to the production of rubber moulds.
These days the company employs 20 people and remains under the stewardship of the founder’s son, Lars Edman. It currently has three lines of business. The first, and oldest, is its line of Prince August moulds of military figures. In 1987 the company acquired the licence to design and manufacture miniatures from Tolkien’s Lord of the Ring books. This lead to the introduction of the Mithril line, comprising a host of well-known characters from the books. The latest addition to the company’s operations is the Edman collection, a range of hand-painted chess sets and historic figures.
According to Marjorie Cullen, the company’s marketing executive, Grupa Edman Teo has several outlets for distributing its products. The most immediate is its visitors centre, which attracts groups of tourists and collectors who make the journey especially to visit the centre. Secondly, its products are distributed to retail outlets in continental Europe and Scandinavia. The company also has a healthy outlet in domestic retailers such as Weirs on Dublin’s Grafton Street, Adare Manor and various hobby shops nationwide. Along with mail order, its other main outlet is web sales.
“We moved into online sales around six years ago,” says Cullen. “We hired a full-time web master, who began putting the entire catalogue online and setting up the mechanism for online retailing.”
The move to online sales opened up a whole new market for the company. “We’ve sold a lot to the hobby market in the US and have customers as far away as Australia. Only this morning I was in touch with a collector in Brazil,” she adds.
The online side of the business has grown steadily and Cullen estimates that sales grew by around 30pc during 2002. Overall, online sales now count for up to 40pc of the company’s business.
The online side of the business has also been the company’s saving grace in recent years, according to Cullen. It always had a healthy outlet in the tourism market and was fortunate enough to be located close to tourism hotspots such as Killarney. However, with war, terrorism and SARS in the news, the number of tourists to the area has fallen. “It’s been extremely quiet so far this year and things have only begun to pick up during the last fortnight,” she remarks.
The one drawback to online sales, Cullen says, is shipping costs. “They’re very high at the moment and we’ve seen plenty of orders that aren’t completed because of the shipping costs,” she explains. The company is constantly on the look out for better deals when it comes to delivering orders. “We’re lucky in some ways though, because in most cases our packages are small and light,” Cullen adds, lending further credence to the view that online retailing is often best suited to smaller, easily packaged goods.
After all the hype of a few years ago, we’re beginning to see a more mature side to online sales. It involves slow, steady growth and, if this example is anything to go by, provides small companies with access to markets they may not otherwise have found.
By Dick O’Brien