Overseas factories have taken over more than 95 percent of guitar manufacturing from the United States. Yet Rickenbackers International, which makes some to the world's best electric guitar in an unobtrusive plant here, has a majority of its sales in foreign countries. President John Hall considers his company sm
all
potatoes in a $6 billion worldwide market. He won't say how small. Music
Trades magazine lists Rickenbacker sales at $8.4 million.
But government officials are impressed. Last month, the Santa Ana district of the U.S. Small Business Administration named Rickenbacker Exporter of the Year. In 1989, the firm received the President's " Award" for excellence in exporting. The Commerce Department noted that Rickenbacker's foreign sales increased 89 percent from 1985 to 1989. "If a business is going to succeed, it must think globally," Hall told a business breakfast in Santa Ana recently. Hall isn't about to dig his toe in the dirt and say of Rickenbacker's global success, "Awe shucks, ' twern't nothin'." He knows how hard his 85 employee company has worked. Still, he modestly gives luck some of the credit. Hall was just a youngster when the company got better worldwide publicity than it could buy, followed by a sales windfall. In 1964, the Beatles made their American television debut on Ed Sullivan's show playing, yup, Rickenbacker. "People came to my dad (then Rickenbacker president) begging for the product," Hall said while sitting in his office surrounded by vintage Rickenbackers. There's the framed original, which looks like a small tambourine on a stick. And the limited-edition John Lennon version released in 1990. And on that other wall an acoustic guitar-acoustics are making a huge comeback-that will be the Rick Nelson limited edition if the late rock singer's sons agree. "The primary problem (for exporters) is you must be competitive with what is made in other countries," Hall said. He calls the Rickenbacker the Mercedes-Benz of electric guitars. Not a Rolls-Royce that has extremely limited production, but still high quality. Rickenbackers are made virtually by hand with mostly U.S. parts. "We're usually not the first guitar for a player," he said of his instruments, which cost $800 to $4,500. But Tom Petty (and the Heartbreakers), Paul McCartney (Beatles and Wings), Pete Townsend (The Who) and Roger McGuinn (The Byrds) play Rickenbackers. So young musicians want Rickenbackers, too. "It would be tough to be this successful in exporting another product," Hall said. "Our product is unique and has a history and reputation. If I were making paper clips, it would be awfully hard to foster that strong an image."
When Hall became Rickenbacker president in 1984, he decided to greatly expand its international sales. "It was like putting my eggs in multiple baskets," he said. "World economies are related,
but some are going up while others are down." Hall took the path of least resistance. "We started with those countries where English is spoken and demand already existed, countries at the top of the economic list." England, Germany, France and Japan got the first attention. Rickenbackers are now sold in 70 countries. Some countries are more difficult to crack. Korea, for example, has high tariffs on imports that compete with products made there. And many Arab countries won't buy
Rickenbackers because the company sells to Israel. An exporter must be ready to move when the opportunity arises. A Vietnamese importer approached Hall at the National Association of Music Merchants Trade show in Anaheim in January. U.S. manufacturers were embargoed from selling products to Vietnam, and Hall didn't want to skirt that ban by selling through his distributor in Singapore. But Rickenbacker was ready to ship the day the embargo was lifted. Hall's personal style has enhanced his exporting endeavors. He spends more time listening than talking when he approaches a new market. "You have to look at the country, how the people act," he said. "You have to adapt yourself to the business style of the country you want to do business in, rather than rely on them to adapt to you." Germans have told Hall that he acts just like a German businessman. Japanese have said he acts Japanese. "I make a point of visiting each country personally whenever I can," Hall said. "Then I keep the relationships alive with frequent phone calls. Faxes and letters are nice, but personal contact is vital." But no matter how smooth your style, developing export markets takes time, Hall said. "The American idea of quick profits just doesn't happen. It takes several years of no profits before you earn your rewards." Rickenbacker got virtually nothing out of Germany for a couple of years, but now Hall considers that distributor to be the best in that country, as well as his best friend. The company had exported to the United Kingdom for years when Hall became president. But he was dissatisfied with the distributor. So Hall invested the time to create his own distribution firm, Rickenbacker U.K. "That really has grown our company," he said. "When we went in, we were probably No. 20 in guitar sales. Now we're No. 3." However, strong distributors have developed in the United Kingdom over the past decade, so in June, Rickenbacker will transfer to a regular distributor. "Ideally, I want to do business that way (so) I don't have to spend my time dealing with issues in other countries," Hall said.