AT 82, DAVID ORECK NEVER GIVES UP

By BRUCE FREEMAN and DIANA LAYMAN
Scripps Howard News Service

February 8, 2006

David Oreck of Oreck Corp. vacuum cleaner fame was born and raised in Duluth, Minn.. While off at college, Pearl Harbor was attacked, and Oreck immediately left to join the Army Air Corps. As a kid, Oreck's dad had taken him on a flight in a Ford Tri-Motor and they landed the aircraft on the ice of Lake Superior on skis; the experience was so exciting that Oreck has been hooked on planes and the mechanics of engines and electronics ever since.

In WW II, Oreck flew B-29's making bombing raids into Japan. After the war, it was quite a transition to sales for an RCA wholesale distributor in New York City. Over several years, Oreck worked his way up until he was in charge of sales for the whole company. He was involved in the introduction of black and white, and color TV, the first automatic washing machine and the first microwave oven. He had the good fortune to attend congressional hearings on setting standards for color TV, accompanying David Sarnoff, the long time head of RCA. Although the RCA system was originally turned down, the policy was later reversed, and the RCA system remains in use today. Looking back, Oreck said he feels he was able to see history made.

After 16 years with the RCA distributorship, Oreck formed a charter aircraft service as a sideline, flying at night after working all day. He also started a central antenna system in New York City, allowing apartment buildings to be wired for the use of televisions, a precursor to the cable system. And, as if that wasn't enough to keep him busy, he also started a mail-order company teaching radio and television repair in Spanish by direct mail.

In 1962, at age 40 and with a wife and three children, he left his safe, comfortable job with the RCA distributor and started Oreck Corp. to sell vacuum cleaners by mail. As Oreck explained, he had "...a good idea, a lot of energy, and no money." It was a big risk and a mighty struggle, but he was a believer of Winston Churchill's maxim, "Never, never, never, give up." To this day, Oreck says that it is better to be tenacious than timid — that you must find a niche and focus only on that effort or you run the risk of spreading yourself too thin.

Following this principle, Oreck focused on the strategy of selling his 8-pound vacuums to hotels for 5 years, slowly building the vacuums' reputation for holding up under heavy use, while not being too heavy to lug around all day. He did not design the vacuum himself, but came upon an abandoned Whirlpool design he thought had potential. In the beginning, he said he took back and replaced as many vacuums as he sold until he had improved the design to the point that customers were happy with the vacuum.

Forty-four years later, Oreck still gladly accepts returns and replaces any model which does not work properly. He still watches warranty cards carefully to identify potential problems and believes in his product so strongly that he has become famous for his offer to try it for a month, and he will pay to ship it back if you are unsatisfied.

The secret to his success, Oreck said, was to abandon traditional retail distribution channels for his product, crediting direct mail for his triumph. "Any manufacturer who does not control distribution, will eventually be controlled by the distribution channel," he said.

Once a business is growing steadily, the breath of a distribution channel can always be expanded to include other options. Today, Oreck products are sold through direct mail, home shopping channels, on the Internet, and through 600 retail stores. Oreck's marketing strategy has expanded to include the reduction of dirt re-release into your home through the use of hypo-allergenic vacuum cleaner design and bags. Oreck has also entered the air-purifier market, which he considers synergistic with the vacuum business since both "clean up" your personal environment.

The Small Business Professors' Words of Wisdom

Oreck told us that he finally felt like he was successful after 20 years and a lot of sleepless nights in the business. While one of his sons is the president of the corporation, Oreck still goes to work every day, concentrating mostly on marketing and advertising the products that bear his name. At 82, he also still flies open-cockpit planes and collects Harley motorcycles on his Mississippi farm. He says that, "unlike anywhere else in the world, you can start a business in America at any age."

"There are no lines of people waiting to leave America," Oreck said.

His goal is to keep going and he has no plans to retire, which he believes is, "the shortest route to the obituary section of the newspaper." David Oreck, we salute you for never giving up and making a difference in people's lives every day.

Case History:

www.oreck.com

Entrepreneur's Strategy: Never give up, provide superior products and service, and keep going until you drop. Could This Work For Me? This works for everybody.

(Bruce Freeman is president of ProLine Communications and an adjunct professor at Kean University. Diana Layman is president of Waterview Associates and a professional business writer. Entrepreneurs with interesting success stories can e-mail their ideas to bfreeman(at)proline-com.com or visit www.smallbusinessprofessor.net.)