Niche Market Leads to Shimmering Success
Benchmark of Indiana found through patience and 'dumb luck' that jewelry stores shine with opportunity.
By John Iwanski
Working out of a shop that once produced 45s for RCA, Benchmark of Indiana has found a market that shines just as brightly as the stars that used to make the music. Niche markets, and particularly jewelry store casework, have made the company a rising star in custom millwork and given president Bill Sherer something to smile about.
"We've been at this (jewelry casework) for about seven years," says Sherer. "When we started out, it was just dumb luck that we took a job. Now we've gotten to the point where we are really good at it. We can always improve on some things, but we understand what the job and client need now."
Started in 1990, Benchmark moved into its 26,000-square-foot Indianapolis, IN shop in November of 1997. The space was essential for its jewelry store casework, as the company assembles and lays out the fixtures prior to installation.
"We load up a truck with the cases after we lay them out here," says Sherer. "As a result, installation on-site only takes about a week, and that is important for the client. We also find that it's easier to put the cases together on-site if we do most of it here at the shop. That's important to us."
When Benchmark began working with its clients in jewelry casework, it found that most opportunities for sales and construction occurred in late spring and summer. The "down time" that resulted in other seasons meant that other areas and markets needed to be explored. So when the shop recently went through a restructuring, the company looked at some new ways of improving and increasing its job load.
"We all wear a bunch of hats," says co-owner Bill Barnes, who is the company's self-proclaimed "numbers-cruncher." "We sit down once a week, myself, Bill (Sherer), our purchasing and engineering manager Shawn Keenan, our production manager and our project and sales manager. We look at jobs we've done, what we liked and didn't like, how we can improve and what we should keep the same."
By doing this, Barnes says the company can focus on projects that will allow for a solid cash flow all year long, as well company growth. Profit analysis and upcoming jobs and bids are always a topic of discussion, as well as item pricing and crew training. "You can always do it better than you did the last time," says Barnes. "By talking about it, we can find out how."
When they first started constructing jewelry casework, Sherer says Benchmark almost got out before it got in. "After seven years, we decided that this is something that we should pursue. It took us that long, but now we're good at it. There were a couple of people here who thought we shouldn't do it at all," he says.
"Jewelry store work involves a lot of client interaction and customer service," Sherer continues. "But we've come a long way and now when we go in, we know how to price and bid a project, complete it on time and most times come in under budget."
Benchmark works in woods, primarily North American hardwoods such as red and white oak, maple, cherry and poplar. It also works extensively with Honduran mahogany, as well as veneers such as anigre. The company tries to work within the guidelines given to them by designers or architects.
"We like to use wood," says Sherer. "Some companies set themselves up to use plastic laminates, which is fine. But we're a custom woodwork shop and that's what we do. We provide whatever the customer asks us for."
When it comes to design, Barnes says that jewelry store proprietors are intimately involved with the design and scheduling. But even though the owner, designer or architect may have an idea of what they want, the burden of design and drawing work still falls on Benchmark.
"They give us what the customer wants in broad brush," says Barnes. "We come back with what works in the space available, what is realistic."
He adds that the client might have an idea of how many cases will be in the showcase or have an idea of how they want the layout, but Benchmark still makes all the pieces come together into a whole. "We put together the shop drawings," says Barnes. "Then we'll go to the client with the plans and show them how the showroom will look."
Jewelry stores are one part of the marketing strategy that Sherer and Barnes say adds all the niches they work on to equal a whole.
"Our strategy is to have a lot of niches," says Barnes. "Jewelry stores are one-third of our business, one-third is trim work, work stations and conference tables, and another one-third is production work for places such as hotels and hospitals."
"The hotel business we feel will be big for us," adds Sherer. "There are a lot of big players already providing custom millwork. But with them, if hotels don't plan ahead, they can't get someone in to refinish and refurbish their place on their schedule. We can come in and deliver the same quality with better pricing, and do it on the schedule they want because we're not too big."
Sherer notes that his most recent hotel client was surprised by the level of craftsmanship Benchmark provided and says it was "way beyond what they were expecting. That makes us feel good," says Sherer. "If we can come in on time and under budget and the client feels he got better than what he expected, then we are on the right track."
Despite the increased business, Benchmark still stands by its niche marketing strategy and sticks to its company rule of commercial work only...most of the time.
"We have a company rule that says we don't do residential work," says Sherer. "But rules were made to be broken."
He estimates that the company ends up doing two or three residential trim jobs per year, depending on the nature and size of the job. According to Sherer, the company did a local residential job in 1997 that was just short of $250,000.
"Every year we take some residential work," says Sherer. "For a job like that, we'd have to be crazy not to try and take it on."
But commercial work accounts for nearly all of Benchmark's sales, which in recent years have climbed steadily and are now measured in millions of dollars. Last year, the company posted sales of over $2 million and hopes to continue to increase that total this year.
"We finally figured out how to make money on our jewelry stores," says Sherer, "and improve our productivity in other areas and markets that we're in."
One way the company has done that is with the addition of a CNC panel saw. Sherer says that after analyzing the numbers, they found the machine would save them the productivity of two workers in the shop. Though the company still creates most of its work with hand and power tools, larger machinery also helps Benchmark save time and money. Its' Homag Espa+ÃâÃÂ¦a panel saw from Altendorf America is the newest piece of equipment in the shop. In addition, the company has an SCMI B4L edgebander, an SCMI SI 320 panel saw and two spray booths for finishing work. These aid with the production work for hotel furniture and work stations, which the company designs for businesses as well as hospitals.
"Right now, we don't do a lot of production work, so it doesn't make sense for us to have all the big CNC machinery," says Sherer. "But as we get more production work on-line, if there is a need for it, then we certainly will invest in what we need."
The company constructs almost all of its components itself, from doors and desks, to jewelry cases and MDF work stations. And Benchmark doesn't limit itself to just putting together the casework. For its jewelry casework, it also installs the glass, which comes from several different manufacturers, and all the in-case lighting, which is from FC Lighting. For Sherer and Benchmark, that's something that just makes good economic and installation sense.
"Learning to cut and miter bent glass was a huge help to us," says Sherer. "But we will install whatever the owner tells us he wants. Whether it's a safety glass or shatterproof glass, whatever. We want to do as much of it here in shop as we can."
Sherer also notes that some planning goes into accommodating for security features in the casework. But that is just a matter of proper planning and understanding what the store's owner is going to have installed.
"We leave room for the wires that need to be run, just like we would for lighting," he says when asked about the casework's security. "Planning and purchasing actually take up the most time out of the whole process for us. That's where you have to be really sure of what you're doing."
Sherer and Barnes are also sure about wanting to foster a positive working atmosphere in the shop. They feel that discussing issues with workers, putting an emphasis on training and nurturing an improving market are all keys to getting and keeping skilled workers.
"You can't find skilled woodworkers anymore," says Sherer. "It's just not a trade that's passed down from generation to generation. What we look for is a person who is loyal and trainable. That's a person we can turn into a custom woodworker."
Barnes agrees with Sherer, saying, "We've had great success with finding the right people and turning them into woodworkers. If the person is good, we retain them. We find ways to make sure they want to stay with us."
Benchmark currently has 19 employees, which is an ideal number for Sherer and Barnes. According to them, it allows them to handle the current business and puts them in a favorable position to grow as well.
But with all its ambition, Benchmark is also wary of biting off more that it can chew. That's why it approaches its markets with an aggressive, but managed view, Barnes says.
"I knew a guy who was going to open a whole new production plant to accommodate all the work that a fast-food restaurant was contracting him to do," he says. "Then they decided not to expand for a year and he almost went belly-up in debt. That's why we want to cover all our bases and have several niches that we do well."
Sherer agrees, saying, "We don't want to put all of our eggs in one basket. I would rather have many smaller and medium-sized clients than one or two really big ones. We aren't big enough to take that kind of partnership on, and we're not looking for that."
All of Benchmark's client base is through word-of-mouth and references and its reputation among jewelers is impressive.
For now, Sherer says he is pleased with the growth of his company and the new directions and niches Benchmark is serving. And with 300 to 500 upscale independent jewelers as a target, he says he is confident that Benchmark will continue to grow.
"We are working with 10 to 15 percent of the market right now," he says. "I have every intention of hitting that market better and stronger with the knowledge and track record that we have behind us."
This track record is what allows Sherer, Barnes and the rest of Benchmark's team to focus on the future while enjoying the present.
"We have a good time here," says Sherer. "Some jobs stretch us out a little, but we have guys here who would build a whole jewelry store singlehandedly if we'd let them."
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