A Business Carol- Part 1: A Company Born from Christmas

Nathan Gordon, Chief Information Officer at Christmas Central, recounts how he mobilized his family business into a major enterprise.

Editor’s Note: We had the opportunity to attend the Internet Retailer Conference and Exhibition this year in Chicago.  There we met with Nathan Gordon, Chief Information Officer at Christmas Central, who shared insight on leadership and the dynamic of a family business. 

Gordon has navigated through online retail for Christmas Central taking it to become one of the fastest growing wholesale companies.  In the first of three part series, Gordon shares how he joined the 30-year-old family business of wholesale closeouts to a generation of online users. 

Forefront Magazine: To start, what’s your favorite holiday? I’m sure you get that a lot.

Nathan Gordon: Yeah, people are always saying, “You must love Christmas, you must love Christmas.”  It’s like, “I used to. I used to love the time when I was a kid. But now, when you’re entrenched in it, your whole life is it.  You go through that whole Christmas season where you’re so busy. Once I start getting into November, I actually start going to work at four in the morning.  It’s just because I get four solid hours to be left alone.  No one is in the building, and I can do everything I have to.  Then, right after Christmas you’re buying.  Actually, I take that back; starting October you start buying.  You start buying for the Christmas season that hasn’t even happened.  Christmas for me starts in October and really doesn’t even end until about February when all the ordering is finished.  So it’s a very long holiday.

You know, you’re at work from four in the morning until five, six o’clock at night. That’s typically when you just hit burn out. You go home. I’m in bed by eight o’clock.

Forefront Magazine: Can you share a little bit about your personal path from college, to your involvement in the family business, and the transition to where you are now?

Gordon: I mean, going back as far as I can, it was always a family business.  It was there before I was even born.  And you know, I used to love going to work with my father.  At six-years-old, are you really helping? Probably not, you’re probably creating more of a mess. But it was nice to always be around it.  So I was always entrenched in it.

I went away to Penn State in 2000 and honestly thought I was never coming back.  I wanted nothing to do with Buffalo. It’s not the biggest of cities and there’s not a ton going on there.  But after my fist semester, my parents actually came to visit for parents weekend, and my father was telling me about a deal they bought from Disney: fifty-five tractor trailers of Winnie the Pooh collectibles.  He was just telling me about it and I was like, “Oh that’s a lot.”

I was like, “What are you doing with it?”

And he said, “We’re just going to try to flip it.” My father’s roots are closeouts and flipping to other retailers, and that was his plan.

It was January ’01, and Ebay was becoming more and more of a thing. I asked him, “Why don’t we put this stuff on Ebay?  Why don’t we see how it works?” And at the time he wanted nothing to do with it.

He said, “No, there’s no point, I’m not dealing with one or two, I’m looking to flip tractor trailers of this.”

And I said, “Can I just try and see what happens.”

I think he let me do it for fun, just to see what happens.  And you start seeing this, wow… It’s a seventy dollar item, at full retail at a gift store, that is bought for two dollars, and basically I think my father’s big plan was to flip it for five.  Flip fifty-five tractor trailers of this item for five bucks a piece.

So I’m at school and just chugging along.  There were only maybe forty-four skews in the catalogue of all that stuff.  So 2004 rolls around, and I’m graduating. The big decision is “What are you going to do?”  I turned down my other job opportunities to come home. I was like, “Let’s put the company online.”

My father has a knack of buying a closeout at a very cheap price, which is a great thing.  Someone will offer him a closeout and be like, “Oh, fifty percent off wholesale,” and he will say, “That’s great, how about five percent of wholesale?”

So when you put these items online, you can make ten times as much. The customer’s getting a great bargain, and you’re making a great thing.  So this is progressing, and we’re just selling everything as fast as we can.  Then, in about 2005, Christmas of ’05, Fall of ’05, we start running out of things to list. Closeouts are really not there at the moment. My father was working out some deals, but my father also had one of his original stores, which was a Christmas store.  So we started listing the stuff from there and it was selling as fast as we’re listing it.

And our store has always been a destination store in the Buffalo area. Everyone comes there for Christmas.  It was chaotic in the store, and the employees were literally running through the aisles and taking stuff from the customers because it just sold and we have to ship it.

This progressed for about another two years. In 2007, we made the decision to change our name to Christmas Central. Between ‘05 and ‘07, we were listing a mix of closeouts and seasonal from the store. In ‘06 we were buying seasonal just for the online, and we were keeping the name Merchant Overstock.  But by ‘07, Christmas had really taken off, so we made the change to Christmas Central and really got away from the closeouts.  Then we just kept growing.  In ’05 we joined the Amazon Marketplace, and then that took off.  By ’06 we really started focusing on our own website, that started taking off.  Then we got involved at other marketplaces like Sears and Newegg. Last year was our first year with Wal-Mart.com on their marketplace.

Forefront: Wow.

Gordon:Yeah, and we’ve just basically been growing that model.  When I started ‘04, our warehouse was ten thousand square feet. It was actually just a building my dad has had for thirty years, and that where we started out of.  We went from that to renting off-site warehouses all over town.  We had one that was fifteen miles away and twenty-thousand square feet, then we had another one that was five minutes from that that was another twenty-thousand square feet.  Then we expanded to a one-hundred thousand square foot DC as we kept growing. From the one-hundred-thousand square feet we moved to a more modern facility. Then we bought the warehouse next door to bring us up to two-hundred-thousand square feet, and now we’re renting space.  As of now we’re up to three-hundred-thousand square feet, and we’re looking at the possibility of acquiring a five-hundred-thousand square foot building. This machine has just kept growing and growing and growing.

Forefront:So how do you feel about all of that?  It’s obviously a good thing.  Can you tell me about your decision to go to business school?

Gordon:Actually, when I was a freshman I was in Pre-Med.  I even interned at a plastic surgeon when I was in high school, and I really thought that was the field I wanted to go into.  My electives were the business classes just to help make it easier for med-school.  But my mind kept drifting, and I really wasn’t interested in all those bio and chemistry classes. The business classes came more naturally to me and were simple, and I was getting straight As.

I remember going to see my advisor, and within five minutes she had picked up the phone. She called the Business School and said, “I have a student coming over to see you, he’s transferring to you.”  So I made the change.

Forefront:That’s good.  So we talked about your role, what you’re doing, you have a title—but what would you say is your day-to-day role right now?  What do you feel is most important?

Gordon:Years ago I was really involved in all aspects, and when I say all aspects I mean all aspects.  If a tractor trailer came in, and they needed help in the warehouse, I would jump on a fork-lift and help.  But the problem is my time was really being spread too thin. When it’s your business, you kind of want to have your hand in everything, but when you do that you really start neglecting things.  So overtime, in the past year probably, I’ve been getting more key people to watch certain things.  I try not to worry about the warehouse because I have people that really know what they’re doing.  I try not to worry about all the customer service employees because I have my two key girls that really handle the entire office.

A lot of my time now is spent working with the factories in Asia to find the right product we’re looking for, to source it, to buy it at the right price, and to make sure we’re getting it at the right price. I have to make sure I have the right deal with our carriers, getting the right percentage, and that the right systems are in place to make sure we’re successful.  And then, obviously, I’m always looking forward and trying figure out where we are going next.

We still have a retail store presence, and I’m even looking at expanding the retail store presence because I don’t think brick and mortar’s dead.  People do go to stores. Yes, Monday is the busiest day for us online, but weekends are dead online and our store is busy.  So there’s this nice cycle.

I’m looking to expand our manufacturing, branding stuff under our own name.  I’ve been trying to work with a lot of other online partners to get our products on their sites—those sites that don’t have the marketplaces, the Lowe’s of the world, the Home Depots of the world, where they want to list everything on their site too. Well, I have the goods, and let me get the goods on their site.

A lot of time now is really spent in breaking up the seasonality of our business.  Christmas, I mean. If you look at our sales, there’s just a giant spike in the fourth quarter. So in the past couple of years, I’ve kept getting a little bit more into that spring, summer, and then a little bit more and a little bit more, trying to make sure that we’re busy year round. I want to make sure I can keep the key warehouse staff because every time you have to retrain them it’s just a headache.  When we were growing we would go down, and there’d be maybe two or three key warehouse staff, and that’d be it, and then come Christmas you have to train everyone over again.

This year we have about 25 to 30 warehouse staff members who are still here, and they’re still here from Christmas.  So they know everything inside and out. If they know everything inside and out, then when we bring in the 200 temps, they can better work with them.

Stay tuned for tomorrow’s part 2  Q&A with Nathan Gordon where he will be sharing how he fosters Christmas Central’s company culture.

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 Nathan Gordon is the Chief Information Officer at Christmas Central.