What You See Is What You Get: My Autobiography (19 page)

Major Collins had never been anywhere near the army, but not only did he give himself the fake title, he also grew himself an RAF-style moustache, so he couldn't even get
that
right (bearing in mind that major is not a rank in the RAF).

I went to Robinson's office to see whether there was any business we could do. Of course, we talked about Sam Korobuck and how Robuck had gone into liquidation. I told Robinson I'd bought a load of old record-players off Sam and had made a few quid. I then said that if
he
had any similar junk that came back from Headquarters & General, then I was his man.

Indeed he did - he had hundreds of Rega radios. These Russian radios were built like tanks and were quite advanced in that they used rechargeable batteries. But they also broke down a lot - a bit like Aeroflot used to.

Robinson was no soft touch. He was trying to get near-cost prices for these items, even though they were rejects (the cost price being what he sold them to Headquarters & General for). The Russians weren't interested in making a profit in the UK; they simply wanted to sell goods here in order to have Western foreign exchange.

I wasn't going to pay that sort of price for rejects, so after a bit of negotiation he conceded to a 35 per cent reduction which, on the face of it, was not a steal. But
I
looked at it another way. These radios were only available to the public from Headquarters & General - no other retailer had them, so the established retail price was set by Headquarters & General. They, of course, made a profit on them. The price they were selling at was over double what I paid for the duff ones.

If I could repair these radios and sell them to retailers for slightly less than Headquarters & General paid, not only could I make a profit, but the retailers would then be able to sell the radios for less than Headquarters & General did. Robinson hadn't thought about that.

The reason for telling this story is that I'd found myself a repair man to fix these radios, which contained transistors. I would have asked Malcolm, but, as an old-fashioned TV engineer, he had no expertise in solid-state electronics - he was a valve-changer.

My new repairer was called George Chenchen, a peculiar name which you might have thought was of Chinese origin. He was no more Chinese than I am. In fact, he came from the West Country and had quite a broad accent. He was about twenty years older than me, a squat, balding chap with a scruffy appearance, but he seemed to know what he was talking about. He worked with various importers, restoring transistor radios to pristine condition.

I got my dad to check all the radios first. It's common knowledge that there's nothing wrong with half the items that get returned; end customers often send them back if they don't like them or don't understand how to make them work.

George was not a happy chappy when he realised he'd been given 100 per cent rejects and that he'd have to fix
all
of them. He normally enjoyed the lucrative windfall of coming across radios with nothing wrong with them. He charged me 3s 6d for each repair and wanted to jack up the price. Poor old George - he had to actually do some work!

Around this time, Gulu had imported a load of miniature radios - about 3,000 of them. Unfortunately, the whole lot were off-tuned. He asked if I knew anyone who had a mini production line to retune them.

'How much do you want to pay to put them right?' I asked.

'No more than two shillings each.'

I laughed at him and said, 'You must be kidding. No engineer is going to do these for two bob each.' Gulu knew as much about electronics as I do about playing the cello, but he was the biggest bullshitter in the world. He started talking about frequencies, IF-coils, ferrite rods and so forth.

I said, 'Shut up, Gulu. You're not talking to some Bar Mitzvah boy here or some buyer from Gamages. Just give me a box and I'll let you know if I can get them done.'

I showed George Chenchen some of these radios and said, 'What do you think is wrong with them?'

'Ah, very simple,' he said, pointing out that all they needed was two of the coils to be adjusted by a quarter of a turn using a small screwdriver. Little did he know that I had 3,000 to do.

Having fixed the box of radios myself, I called Gulu and struck a deal to do them all for 2s 6d a piece. I asked him to give me all 3,000, so I could get on with them. Gulu, still not trusting me, agreed to release only 500 at a time. Despite my protestations, he went off into another load of bullshit about insurance and stuff like that. I'm surprised he didn't send a private detective after me to camp outside my house.

I took the radios home and showed Ann and Daphne how to do it - it was dead easy. In the evenings, they set up little production lines in their respective kitchens and knocked out the whole 3,000 in no time. They got half the money. Ann had become an electronics engineer - something we joke about occasionally. On the other hand, when I mention it to Daphne, she can't remember it at all and swears I'm making it up. But I recall it as clear as day.

As you'd expect, when you go through 3,000 radios, you come across a few that are simply duff. I ended up giving a box of about seventy-five back to Gulu, saying, 'These ones just don't work'

He complained that I should have fixed them. I reminded him that I was
only realigning them and not doing a full repair and he started waffling that he was going to knock the whole cost of those seventy-five radios off the bill.

We had a blazing row. In the end, he only knocked a few quid off.

*

The plinth and cover market was booming, but my orders were falling now that other people had cottoned on to the fact that you could get these plinths made in the East End. Plus, there were lots of vacuum-formers around. It was great for the East End chippy who'd previously scraped a living making bedside cabinets - he was having it off big time now. His factory was awash with plinths, not just for me, but for everyone.

I complained and asked if he felt he owed me anything. He thanked me for showing him a new area to exploit, but that was about it - business is business. I think he might have bought me a bottle of whisky at Christmas. Fair enough! I don't have exclusivity on entrepreneurial ideas, even if they are mine. The competition always catches up, and after they hit the market there's a window of opportunity to exploit them. The secret is to move on.

I had always felt that the plastic cover was expensive, so I decided I needed to find another way to make them, to look at the problem in a fresh way, as I'd done before.

On Sunday that week, Ann and I visited my mum and dad's for tea and I noticed they had a plastic butter dish - a red-tinted one. As I lifted the lid up, I saw a moulding mark, known to me now as a sprue mark - the place where the plastic is injected - and in that moment, something clicked in my brain. Here we had a coloured, see-through plastic butter lid, and all I needed to do was to make a similar item but much bigger, also see-through, with a nice grey tint to it.

The following Monday, I got straight on the phone to the plastic manufacturers' association of the time and described the product I was trying to buy. A helpful gentleman explained to me a process known as injection moulding. Simply put, powdered plastic was squirted into a giant press which had a 'tool' - a custom-made chunk of metal that moulded the plastic into the shape of the product you wanted. In go the powdered plastic pellets - with extreme heat they turn into molten plastic - and out pops the finished part.

I was on to something here. That week, I ignored the rest of the business and went round visiting toolmakers with a sample of a vacuum-formed cover, to show them what I wanted made. The prices for the tooling ranged from PS3,500-5,000, a fortune for me, but one company down in Surrey, called Arrowcraft, quoted me PS2,800.

I engaged these people to make the tool. In those days, the process was slow. The tool had to be drawn up by specialist draughtsmen and then handmade by skilled craftsmen. The tooling time was going to be twenty-two weeks. Nowadays, the automated tooling process - from drawing to finished product - can sometimes be done in four weeks.

Big lesson coming up here, folks. Unfortunately, I had picked the Del Boy of the tool-making industry. I'd never heard so many excuses for delays in all my life. The twenty-two weeks went by and they were still drilling the steel.

I was kicking up merry hell. To fund this PS2,800, I'd committed the cardinal sin of buying goods from one of my suppliers and flipping them for a very small margin in order to generate cash flow to pay the toolmaker. With vendors of other stuff funding my cash flow, I was obviously incurring liabilities. My accountant told me that the way I was operating, as Alan Sugar trading as A M S Trading Company, had many personal risks attached to it. He suggested it was time I formed a limited company. After all, the investment in the tool was a big gamble; not only would it have to work technically, it would only pay off if I was able to sell loads of the lids that came from it. Only then would I be able to pay back the cost of the tool and start to make money. If it all went wrong, the vendors I owed money to might look to me
personally
to pay them back.

On 8 December 1968, I formed A M S Trading Company (General Importers) Ltd, company registration number 942631.

*

I virtually
lived
at that tool-maker's until finally they got the thing made. The tool was then taken to Morning Plastics in Chertsey, a very well-organised company, not like the bunch of monkeys at Arrowcraft. Here was the coup: the dust cover would pop off the moulding machine at 3s6d each! Remember, up till then the lowest price anyone could buy vacuum-formed covers was 18s each.

Knowing my competitors were paying vacuum-formers 18s per cover, my masterstroke was not to treat these things as one of my normal products and just apply a reasonable margin. I decided that even if they did cost 3s 6d, I would sell them for 16s. The vacuum-formers scratched their heads because 16s was the cost price of the raw material they were buying from ICI.

That was it - the start of the big time for me. Within weeks of starting production, I was making PS6,000 per month, at a profit margin of over 400 per cent per cover! No more of the hustling around with Gulu and the others. I was selling thousands of plinths and covers to big companies such as G. W. Smith and Laskys.

Laskys was one of the big retailers at the time, with four or five shops dotted up and down the Edgware Road and Tottenham Court Road. In my days at Robuck, I used to call on Eddie Lasky to try to sell him tape recorders. They were a bunch of hard-nosed businesspeople. Their wholesale division, H. R. Factors in Harrow Road, was run by a fellow named Ted. When I used to walk up and down the aisles of H. R. Factors' warehouse, Ted would follow me around like a shadow. Another trusting character. There must be something about me, what with Peter Henson thinking I was going to nick his walkie-talkies and Ted sticking to me like shit to a blanket.

Laskys, who begrudged anyone making a profit, reluctantly bought the covers off me. They wouldn't believe this small-time-Charlie, who had hustled them over the past couple of years, was making the covers himself. They wanted to find my supplier. They managed to do so, but hit a brick wall - Morning Plastics could not supply anyone other than me with lids because the tool belonged to me.

Laskys were plutzing. They were in a dilemma - should they buy plinths and covers from me at a lower price, or not buy from me out of sheer belligerence and pay more to someone else? Even
they
weren't that stupid.

Ronnie Marks, my first supplier, became one of my customers. So did Colin Lewin, who had a retail shop on Gray's Inn Road. He was a great character. Originally he was a GPO engineer (today's British Telecom) and on his travels he started to pick up bits and pieces to trade - he had a real instinct for business. He opened a trade counter and importers would descend upon him, offering all their job-lots. His customer base was market traders and the likes of me, when I was running around in my minivan. He had the guts to go and buy stuff that other people wouldn't touch with a bargepole. It's interesting to note that the tables had turned and I had now become a supplier instead of a customer.

Gulu was having withdrawal symptoms. He hadn't heard from me for months. Unusually, he called me up to ask, 'Where are you? I haven't seen you for a long time. What are you doing?'

I told him I no longer sold his crap and that I was making plinths and covers. 'Oh yes,' he said, as if he knew what I was talking about. He didn't have a clue what plinths and covers were. That is, he didn't until a few weeks later.

Colin Lewin and a few others told me that Gulu had realised I was on to a winner and tried to poke his nose in. Like Laskys, he also ended up in a cul-de-sac upon finding Morning Plastics. He discovered that to compete with me, he needed to invest PS4,000 in a tool.

Then came the bullshit. 'Look here, Alan, I know what you're doing. It's
no problem for me - I'm going to get a tool made. I've got to wait twenty weeks and then I'll have the stuff at the same price as you. So rather than me doing that, why don't you just sell them to me? Make a fifty per cent margin by selling them to me for six shillings.'

I told him to piss off. Nice try, Gulu. Forget it. He wouldn't have known what to do with them anyway. One of the problems Gulu had going forward in the electronics business was that he never changed from being a trader to being a manufacturer.