Zippo Manufacturing Company - Company Profile, Information, Business Description, History, Background Information on Zippo Manufacturing Company

33 Barbour Street
Bradford, Pennsylvania 16701

Company Perspectives:

At Zippo we are dedicated to producing products of the highest quality to satisfy our customers' needs.

We seek to serve our community through the contribution of monetary and non-monetary assistance to support local projects.

By offering the opportunity for employment, we strengthen the community as well as the individual.

The people of Zippo, as always, remain our main strength; the source of our pride in our past and the source of our optimism for the future.

History of Zippo Manufacturing Company

Zippo Manufacturing Company is world famous for its Zippo windproof lighter and its lifetime guarantee. The company has sold more than 300 million lighters since its founding in 1932 and currently makes more than 100 different models, including ones aimed specifically at collectors. The dominant maker of refillable lighters in the United States, with a 40 percent market share, Zippo also sells its lighters in more than 100 other countries, with Japan being by far its largest export market. Since diversifying for the first time in 1962 (when a tape measure was introduced), Zippo now manufacturers and sells pocket knives, key holders, money clips, writing instruments, tape measures, and pocket flashlights in addition to its flagship lighters.

Entrepreneurial Beginnings

George Grant Blaisdell, Zippo's founder, had a checkered career in business prior to focusing on lighters. His father ran a machine shop in Blaisdell's hometown of Bradford, Pennsylvania, where Blaisdell started work as a machinist at age 16 (working a 56-hour week at 10 cents an hour), then became a salesman, and at age 20 took over the business. He managed to keep the business afloat during World War I through government contracts, then sold out in 1920. Blaisdell headed for New York; having failed to strike it rich playing the stock market, he returned to Bradford and invested what money remained in local oil wells (through his co-ownership, with his brother Walter, of Blaisdell Oil Company), making a modest living over the next ten years from the proceeds. Thereupon, in the early 1930s he was waiting for the right business opportunity.

On a muggy summer night in Bradford in 1932, Blaisdell and a friend stepped out on the terrace of the Pennhill Country Club. Blaisdell's friend used a cumbersome-looking Austrian lighter with a removable brass top to light a cigarette. Blaisdell proceeded to chide his friend: "You're all dressed up. Why don't you get a lighter that looks decent?" In an enthusiastic reply, his friend said: "Well, George, it works!"

Blaisdell was suitably impressed and decided to try to sell the lighters himself. He obtained rights to distribute the product in the United States, imported them for 12 cents each, and attempted to sell them for $1 each. But this venture failed, mainly because of the clumsy nature of the lighter's design. Blaisdell then decided to design his own lighter, one that was attractive, easy to use, and dependable.

The resulting original model was rectangular in shape--made from brass tubing with soldered tops and bottoms and square corners--with a chrome-plated hinge soldered on the outside for easy opening and closing. Sized to fit comfortably in a hand, the lighter featured a windhood to protect the wick. Blaisdell liked the name of another recent invention, the zipper, so he christened his lighter the "Zippo" (and his new firm, Zippo Manufacturing Company).

Production of Zippos began in 1932 in a $10 per month rented room over the Rickerson & Pryde garage in Bradford. The shop had $260 in equipment and two employees, from which came lighters retailing for $1.95 with the backing of a lifetime guarantee.

Struggling Early Years

Sales of the lighters got off to a slow start, with only 1,100 sold during the inaugural production year. Blaisdell tried all kinds of methods to move his brainchild. He gave away samples and gifts to long-distance bus drivers, jewelers, and tobacconists. In 1937 he paid $3,000--mostly borrowed money--for a full-page ad in Esquire magazine after he found that retailers shied away from products that were not advertised. Unfortunately, Blaisdell did not yet have sufficient distribution to take advantage of the effect of such advertising so this gambit failed to pay off.

While handling sales himself and struggling to develop a market for his windproof lighter, Blaisdell also tinkered with the design. The lighter was shortened by a quarter inch in 1933, decorative diagonal lines were added in 1934, the hinge was placed on the inside of the case in 1936, and rounded tops and bottoms replaced the square corners of the original design in 1937. This last alteration was important from a production standpoint as the lid and bottom could now be formed as a whole, eliminating the soldering process.

Blaisdell achieved his first big sales break starting in 1934 when he started selling Zippos on punchboards, two-cents-per-play gambling games popular in U.S. tobacco and confectionery shops, poolrooms, and cigar stands. Before punchboards were outlawed in 1940, more than 300,000 Zippos were sold through this game of chance, enough for Zippo Manufacturing to achieve its first profits, modest though they were.

While punchboards were a short-lived chapter in Zippo history, another of Blaisdell's marketing methods had a much longer-lasting impact. In 1936 an Iowa life insurance company ordered 200 engraved lighters that it gave to its agents as contest prizes. And Bradford's own Kendell Oil Company ordered 500 engraved lighters for its customers and employees. Thus began Zippo's specialty advertising business, which would become an increasingly important venture in the coming decades.

With sales increasing thanks to the punchboards and the special markets deals, Blaisdell expanded his operations. First, the production facility expanded into the entire second floor of the Rickerson & Pryde building; Blaisdell also added a new office elsewhere in Bradford. Then in 1938 the factory and offices were both moved into a former garage on Barbour Street in Bradford. That same year, Zippo's first table lighter debuted, a four-and-a-half inch tall model that held four times the fuel of a pocket lighter. The following year Zippo introduced a sophisticated new lighter model, the 14-karat solid gold Zippo, available in both plain and engine-turned models.

World War II Brought Zippo Fame

With the onset of U.S. involvement in World War II, the U.S. government forced the halt in production of many consumer products. Blaisdell continued Zippo production, but as he had during World War I, he again moved into government contracting--all Zippos became destined for the U.S. military. With brass reserved for military uses only, the wartime lighters were made of a low-grade steel. Since this provided a poor finish, they were spray-painted black then baked, which produced a crackle finish.

Blaisdell sold some of these Zippos to the military post exchanges at such a low price that they were then resold for $1.00, making them the most affordable lighter available. He also sent hundreds of lighters to celebrities, including the famous war correspondent Ernie Pyle who then gave them away to servicemen overseas. Through these actions, the Zippo became the favorite lighter of GIs, whose loyalty to the product would help fuel postwar sales. Numerous war stories also helped cement the Zippo as an American icon--the Zippo that stopped a bullet, that cooked soup in helmets, that illuminated the darkened instrument panel of an Army pilot's disabled plane, enabling him to land safely. Zippos also began making frequent appearances in Hollywood movies--notably war movies at first but later films noir&mdash-hancing their iconic status. Meanwhile, wartime production peaked in 1945 when 3 million Zippos were made.

Postwar Design Improvements, Expansions, and Diversification

The Zippo repair clinic became famous in its own right by backing up the Zippo guarantee. Repaired lighters were returned at no cost to the customer, not even return postage. The clinic provided more than just customer goodwill; it also provided invaluable information about design flaws. Over the long run, the repair clinic found that a faulty or broken hinge was the most common reason for a Zippo to be returned. But soon after World War II, in 1946, Blaisdell discovered that the most frequent repairs were for worn striking wheels--wheels that had been coming from an outside supplier. Blaisdell immediately stopped production to address the problem. He decided to bring production of the wheels in-house and spent $300,000 on a new flint wheel capable of firing a lighter as many as 78,000 times. This top quality wheel was produced by a knurling operation that remained a company secret.

Zippo continued to develop new lighter models following the war. In 1947 Town and Country designs were introduced that featured images of pheasants, mallards, geese, sailboats, trout, setters, and horses. Three years later, full cover leather lighters and sterling silver lighters made their debuts.

Meanwhile, Blaisdell sought to improve his sales force. From 1939 to 1950 Zippo's entire sales operation consisted of two cigar salesmen, who sold Zippos as a sideline mainly to tobacco wholesalers. The two men each were charged with a vast selling territory. In 1950 Blaisdell set up his own sales force, with district managers assigned specific regions. This sales force was not restricted to tobacco wholesalers, but also called on jewelry, drug store, and grocery wholesalers.

Also in 1950, Zippo set up its first foreign subsidiary, Zippo Manufacturing Company of Canada Limited. Located in Niagara Falls, Ontario, the company consisted of a small production facility that helped increase overall Zippo capacity, which reached 20,000 lighters a day by 1952. Annual revenues had reached $9.5 million and the company enjoyed healthy after-tax profits of almost 10 percent.

Zippo continued to expand its facilities in the 1950s and 1960s to meet the growing demand, both domestic and foreign. In 1954 a new building for chrome plating and fabricating, located on Congress Street in Bradford, was completed. New corporate offices were built in 1955 next to the Barbour Street factory in Bradford. During the 1960s the Congress Street plant underwent a series of additions and eventually became the main location for fabricating and assembling Zippo products.

After 30 years as a lighter-only company, Zippo in 1962 diversified for the first time when it introduced a six-foot flexible-steel pocket rule. This was followed by a compact pocketknife and nail file, a money-clip knife, a golf ball, a key holder, a magnifier, and a letter opener. Unlike Zippo lighters, however, none of these products were made available for retail purchase; they were only available through Zippo's specialty advertising operation, which by the mid-1960s accounted for 40 percent of overall company volume. Zippo boasted of more than 27,000 commercial accounts at the time. All of Zippo's metal products were backed by the same Zippo pledge: "If for any reason your Zippo will not work, regardless of age or condition--we'll fix it free." (For unfixable items, the company sent the customer a replacement.) Zippo even guaranteed its golf ball as playable for 180 holes.

End of Blaisdell Era in the 1970s

After introducing the first of a series of lighters with space designs in 1969--the first honoring the landing on the moon--Zippo ushered in the 1970s appropriately enough with a Zodiac lighter series. In 1976 a commemorative Bicentennial lighter hit the market, as did an in-fashion denim-like lighter.

The year 1978 marked the end of an era when Blaisdell died. Ownership of Zippo Manufacturing passed to Blaisdell's daughters, Harriett Wick and Sarah Dorn, who had worked for the company for years and would continue to do so for years to come but did not wish to run it. They entrusted the presidency to a long-time employee, Robert Galey.

Unfortunately, throughout the 1970s and into the early 1980s, Zippo's sales stagnated at about $30 million a year. The firm was manufacturing-oriented and needed to become more marketing-focused in order to get past this plateau. As it turned out, Galey's stint as president was short-lived since he retired in 1986. Zippo's third president was Michael Schuler, who had joined the company as controller shortly after Blaisdell's death and then was promoted to vice president and controller in 1982. Under Schuler's leadership, Zippo's revenues would increase fivefold within ten years.

Schuler Era, 1986 Through Mid-1990s

The spectacular growth of this period was generated by a combination of increased exports, the aggressive targeting of the collector's and gift/souvenir markets, and creative line extensions. On the export front, Japan remained the top market--one of every four Zippos made in the late 1980s went to Japan--and Western European sales were strong also, but Schuler targeted such emerging areas as China and South Asia and Eastern Europe following the fall of communism. Many of these emerging nations had high percentages of smokers, making them prime Zippo territory. This contrasted sharply with Zippo's domestic market, where antismoking crusades continued to gain momentum throughout the 1990s. Overall, while exports constituted only 40 percent of total company sales in the mid-1980s, by 1995 65 percent of sales originated outside the United States.

Credit for Zippo's "discovery" of the collector's and gift markets for Zippo lighters goes to the person Schuler hired in 1991 as head of sales and marketing, James Baldo. Soon after taking the job, Baldo commissioned customer surveys that showed that 30 percent of Zippo's customers defined themselves as "collectors." The surveys also showed that many buyers gave the lighters away as gifts. In response, Zippo began offering premium-priced--$19 to $40--gift/souvenir lighter sets, including ones with licensed brands (Harley-Davidson, Corvette) or images of tourist destinations (Niagara Falls, Empire State Building).

Then Zippo began offering limited edition "collector" Zippos, directly targeting the collector's market. In 1992, a 60th anniversary lighter appeared, followed by 1993's Varga Girl lighter, 1994's D-Day commemorative lighter, 1995's Mysteries of the Forest, and 1996's Zippo Salutes Pinup Girls. Zippo also began producing a collector's guide and, starting in 1993, sponsored an annual July swap meet at the Bradford headquarters. In 1994 the company took the further step of opening in Bradford the Zippo Family Store and Museum, highly popular with collectors, which was expanded to five times its original size in 1996.

Zippo had been criticized at times throughout its history for being too conservative, in particular in regard to line extensions. But under Schuler, Zippo began a more aggressive diversification approach, beginning in 1993 with the acquisition of the crosstown W.R. Case & Sons Cutlery Company, a firm with annual sales of $15 million. Case was founded in 1889 in Little Valley, New York, but relocated to Bradford in 1905, where it developed a line of pocket knives, hunting knives, household cutlery, and commemoratives. The company had filed for bankruptcy after a difficult period and then was bought out of bankruptcy by a limited partnership, River Associates, in 1990. Case's products meshed well with Zippo's and provided Zippo with another avenue into the retail market. Soon after the acquisition, in fact, dual gift sets that included a Case knife and a Zippo lighter were soon being retailed at prices ranging from $50 to $200.

A much more dramatic extension came via the 1993 license agreement with Japanese clothing manufacturer Itochu Fashion System Co. Itochu gained the right to the Zippo name and soon offered Zippo jeans, gloves, and leather jackets in Japan. Zippo began to consider offering such clothing in the United States as well.

With antismoking forces gaining steam in the United States, Zippo came up in 1995 with a creative way to keep its brand strong. It introduced the ZipLight pocket flashlight, which was simply a traditional lighter casing with a replaceable battery pack inside. Zippo spent $500,000 on a television advertising campaign to launch this new product, one of its largest campaigns ever.

By the late 1990s, the Zippo brand, prematurely declared dead by USA Today in 1989, was clearly alive and well and seemed as ubiquitous as ever. The future for Zippo, still family owned, may include George Blaisdell descendants for some time, since four Blaisdell grandchildren are actively at work for the company. Secure in its core lighter market, Zippo seemed sure to continue to grow into the new century through creative marketing and line extensions.

Principal Subsidiaries: W. R. Case & Sons Cutlery Company; Zippo Manufacturing Company of Canada Limited; Zippo Europe S.A. (France; 50%).

Additional Details

Further Reference

Amster, Robin, "Zippo Lighter: American Classics," Popular Mechanics, August 1994, pp. 44-46.Baker, Stephen, "How Zippo Keeps the Flame Lit," Business Week, November 20, 1995.Brown, Christie, "Flaming Success," Forbes, November 18, 1996, pp. 214-16.Carlino, Maria, "Zippo Manufacturing Co.," Journal of Commerce and Commercial, February 3, 1995, p. 4A.Collins, Lisa, "Keeping Zippo's Flame: Name Is Hot, Marketing Lacks Spark," USA Today, August 11, 1989, pp. 1B-2B.Galloni, Alessandra, "Lighter Lovers Flip Their Tops at a Zippo Collectors' Convention," Wall Street Journal, August 4, 1995, p. B1.Kaplan, Andrew, "Scorching Demand for Lighters," U.S. Distribution Journal, April 15, 1996, p. 14.Levy, Robert, "The Mark of Zippo," Dun's Review, October 1966, pp. 53-54, 59.McGrath, Molly Wade, Top Sellers, U.S.A.: Success Stories Behind America's Best-Selling Products from Alka-Seltzer to Zippo, New York: William Morrow and Company, 1983, pp. 156-57."Mr. Zippo," Fortune, October 1952, p. 220.Poore, David, Zippo: The Great American Lighter, Atglen, Pennsylvania: Shiffer, 1997."Zippo: A History of Progress," Bradford, Pennsylvania: Zippo Manufacturing Company, 1995."The Zippo Lighter Collector's Guide," Bradford, Pennsylvania: Zippo Manufacturing Company, 1996.

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