Aro-Sac, Inc.
Company: Aro-Sac Inc.
Owner: Robert A. Montaquila
Location: 1 Warren Ave., North Providence
Type of business: Ear clip manufacturer
Employees: 50
Annual revenues: WND
Third generation owner of Aro-Sac Inc., Robert A. Montaquila, has spent most of his tenure as president fighting for his company’s survival. A manufacturer of earring clips, in its prime Aro-Sac had well over 100 employees. But that was more than a decade ago.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,…
Learn More
Today, the company is in the fight of its life — as overseas competitors making “knock-offs” of the company’s signature product have cost the company nearly 35 percent in sales. It’s been a two-year battle waged both in the courts and in the marketplace.
“People consider us the Cadillac of the earring clip manufacturers,” he said. “It’s a compliment but it leaves us open to be copied and these overseas companies can copy us so well it’s costing us money.”
Introduced December of 1995, ARO-Clip, the newest patent product, was an immediate success in the industry. So successful in fact, that Montaquila was forced to add a second-shift to keep up with the demand.But that demand was short-lived as less than a year after the product’s introduction Montaquila discovered a less expensive copy of his new ear clip flooding the market and taking his sales.
“Knock-offs” are not uncommon in the industry, Montaquila said. What makes it more difficult is that it’s sometimes his very customers that are doing it.
“My customers are being pressured from the stores,” he said. “Everyone wants a lower price tag. I have had customers send my clip overseas to see if it can be made cheaper.”Still, Montaquila said this doesn’t deter him from selling to the very people that he knows will copy his designs.”I can’t not sell to one or two companies,” he said. “This is a world-wide market.”
And though Montaquila has looked to industry organizations and federal legislators for help, he has found little.
“People said they wanted to help, but nothing has really happened,” he said. “I was told if I was successful in a lawsuit, then customs could do something about it.”
But that was almost a year ago and the loss of business as well as the added cost of lawyers’ fees has taken a toll on the company.
“We have tried to get into other things because sales are down now,” he said. “The market we need to go after is Asia, and they don’t want us.”
Part of the company’s diversification effort included the purchase of Jan-Craft, another Rhode Island jewelry manufacturer, last year. Montaquila said he acquired the company, which manufactures hoop earrings, to strengthen his company.
“They made a nice product, and I thought it was a good thing for us to get into” he said. “I moved the company, and many of its employees here from its Cranston location and it’s worked out very well for us.”Aro-Sac has recently been in talks with another Rhode Island jewelry manufacturer.
Montaquila said that while the agreement is virtually in place he is not yet authorized to disclose the manufacturer.
Montaquila said the company has also added other services like soldering in an effort to make the company more appealing to clients.
“Because many of the little guys have gone out of business, when my companies are trying to find someone to do one small thing like soldering, they can’t,” he said. “So we added it. It makes up kind of a one-stop shopping center and it cuts down on our customers’ labor costs.”
The diversification has also proved good for the company, Montaquila said, with employees now cross-trained to do a variety of jobs.
“It’s definitely not like the old days where one person did one job,” he said. “Today everyone knows every job. And when one department slows down, another usually gets busy. So instead of losing workers we can just move them. We try and keep them where they are the strongest, but they are able to move from one place to another.”
Over the past five years, the plant has also become automated. Gone are the days when workers were required to step on a pedal to punch holes in earring clips.
“The old way is a lot slower and didn’t have the consistency that our new machines have,” he said. “Automation has helped us increase our out capabilities.”
And unlike other manufacturers, Montaquila said he keeps large quantities of his products in inventory.
“We try to keep as much inventory as we can,” he said. “It’s definitely a risk to take, but if we don’t have something that the customer needs when they need it, then they might go somewhere else.”
