CNC Machining Magazine - Our Story
In a way, it all started with a bunch of stuffed animals.
Not that Joe and Randy Amarello cared much about the tiny, under-filled beanbag toys themselves. But their wives did. Their mother did. Other family members did. In fact, many of the Amarello kin were thoroughly enamored with the diminutive playthings. They collected them, traded them, traveled far and wide to find them . . . . Like millions of others across America and around the world, they’d fallen victim to the inexplicable allure of the Beanie Babies®.
The brainchild of H. Ty Warner, the eponymous founder of Ty Inc., Beanie Babies descended upon the toy market in 1993.
Designed specifically to appeal to children, the palm-sized plush toys were inexpensive enough that kids could buy them with their allowance, and small enough that they could carry them in their pockets. But above all, they were cute.
Perhaps it’s this inherent “cuteness” that made the Beanies so popular – not only with children, but with adults. Or perhaps it’s because they were unlike any other plush toys on the market at the time. Whatever the reason, the little stuffed pets caught on, and they caught on big.
It wasn’t until 1996, however, that the craze really took off - when Ty retired 11 Beanies from the company’s line-up. The fact that certain Beanies were no longer available instantly made them more desirable - and more valuable. They weren’t just cute toys anymore; they were serious collectibles.
As with most things collectible, the better condition a Beanie is in, the more it’s worth on the secondary market. But it’s not just the condition of the toy that matters; the condition of the original hang-tag (the heart-shaped tag attached to the toy’s ear or other extremity) is also very important. A damaged hang-tag can reduce a Beanie’s value considerably, and if the tag is missing completely, the value can drop by as much as 50%. With some rare Beanies fetching upwards of $2500 on the secondary market - about 500 times the original retail price - it pays to protect those hang-tags.
And that’s where Joe and Randy Amarello come in. They’re machinists - engineers, really - who, between them, have nearly 30 years of experience in the thermoforming industry. Thermoforming is the process of using heat, vacuum and pressure to form a sheet of material, usually plastic, into a particular shape. It’s used to form such things as the plastic trays for holding electronic components, medical instruments or cookies; the plastic clamshells for holding muffins, fruit or take-out food; and those clear plastic - often nearly impenetrable - blister packages that many of today’s consumer goods come in.
Back in 1997, surrounded as they were by a family of Beanie-holics striving to keep their hang-tags pristine, Joe and Randy had an epiphany: “Let’s design a heart-shaped plastic clamshell that snaps over a Beanie’s hang-tag and protects it.”
To them, it was a no-brainer. They worked for a custom thermoformer. They built thermoforming tools every day. They knew what they wanted to make, and they knew how to make it. Joe and Randy went to their boss and asked: “If we make the tool, will you run the parts for us?”
Their boss agreed, so they went to work. “We designed and built the tool on the weekends,” says Joe, “and when it was done, we gave it to the company we worked for to make the blisters for us.”
“We purchased the blisters from our employer and resold them out of our house,” Randy adds. “The first order we placed was for fifty thousand pieces, just to see if it would fly.”
And fly it did. Before long, says Randy, “We were placing million-piece blanket orders and selling them all in three months. It was unbelievable. We had five or six wholesale distributors buying from us; they would order a hundred thousand at a whack!”
“In just a short time,” says Joe, “we landed more than two thousand retail customers. The orders would come in sometimes thirty, forty, fifty thousand a day. We ended up selling almost ten million blisters!” he exclaims.
Yet, despite the standout success of the tag protectors, Joe and Randy kept their day jobs: They liked what they did, and they liked where they did it.
“It was a privately owned company with about 30 employees,” says Joe. “It was small; it felt like family.”
But things changed when the company sold. “They became corporate,” says Joe. “And when they became corporate, they didn’t want to invest in equipment, in engineers, in people . . . .”
Which was not good for Joe and Randy, who were responsible for designing and building all of the company’s thermoform tooling. They could see the industry was changing - molds and tooling were getting larger - and they knew they needed new equipment to keep up.
“We were trying to run a tooling department with old equipment that didn’t have any capacity,” says Joe.
“We were trying to do big plates, or even big molds,” explains Randy, “and sometimes we’d have to make eight programs to run them. We’d have to do half of the plate in four quadrants, and then flip it around and run the other half in four quadrants. It was getting frustrating.”
Despite the new owner’s reluctance to invest in the company, the Amarellos went in search of new equipment. Or, more accurately, in search of a quality used machining center, because they wanted to keep the investment cost low.
Through a used-machinery dealer they found a Haas VF-3 that was only a year and a half old. “It was in beautiful shape, and had lots of options,” says Randy. “We’d heard a lot of good things about Haas, and we talked to some people who owned Haas machines. They said that, for the value - the capability for the money - they couldn’t be beat.”
Thoroughly impressed, Joe and Randy pitched the VF-3 to corporate, but to no avail . . . at which point they had another epiphany. “We looked at each other and said: It’s time; let’s buy it ourselves,” says Joe. “We decided to turn the table and open our own tooling shop.”
For most people, giving up a full-time job and a steady paycheck to start their own business is a major decision, but the Amarellos didn’t lose much sleep over it. “We knew engineering, we knew thermoforming like the back of our hands, we knew 3D mold making . . . it was time to do something different, to move forward,” says Randy.
Thanks to the world’s continued fascination with Beanie Babies, the Amarellos had the wherewithal to step out on their own. “The success of the tag protectors gave us the guts and the financial backing we needed to get started,” says Joe.
Joe and Randy put down a deposit to hold the used Haas VF-3, and went in search of a building. In October 1999, they rented a 2,500-square-foot building near their homes in Acushnet, Massachusetts, purchased the VF-3 and moved it into the building. For the next two months, they spent their nights and weekends fixing the place up, painting it and getting it ready for business. They also purchased another machine - a used Haas VF-1 - and moved that into the building, as well.
On January 2, 2000, the day after the dawn of the new millennium, the aptly named J&R (Joe & Randy) Plastics, Inc., opened its doors. The Amarello brothers were ready for business, and they had work waiting for them.
It seems their previous employer had yet to find replacements for Joe and Randy, despite having a month’s notice. They still needed someone to do their engineering work, and the Amarellos were more than happy to oblige.
“We knew that was going to happen,” says Joe, “We were the only two engineers over there, and when we left, they didn’t have anybody to do the work, so they farmed it out to us. For the first month, we basically did engineering work for them. But, I tell you, three weeks to a month into it, and people just started calling: ‘Hey, I heard you guys started your own business. You want to quote this?’”
“Everybody in this business knows each other,” adds Randy. “It’s a very tight-knit business.”
“So once they heard that the Amarello brothers had gone out on their own,” Joe continues, “the phones started ringing. It’s such a small niche that word got out. It spread fast - like wildfire, actually. It snowballed from there.”
The Amarellos attribute their immediate - and continued - success to their extensive knowledge of thermoforming tools and the thermoforming process.
“We have, from start to finish, the experience to make a tool – right from the prototype stages, all the way through to the complete assembly,” explains Joe. “We take it all the way through the process, and that’s what makes us so successful. We’re not just offering machining of a part; we’re offering the service of designing and building thermoforming tools. What’s critical here is to offer . . .”
“. . . every station of the machine,” finishes Randy. “In an inline thermoforming machine, the plastic gets heated. It goes into a form station. There’s an upper assembly and a lower assembly in the form station. We have full capabilities to design and machine and manufacture the whole package. Then it goes to the trim station. We can do that. Then it goes to the stacker station. We know the entire process. We know the shrinkages. We know what it takes.”
It wasn’t long - “probably six to eight months into the business,” says Randy - before J&R needed additional capacity and capability to handle more, and larger, work.
“In our type of business,” explains Joe, “tool size can run thirty by thirty five (inches), and the twenty by forty travels of the VF-3 just weren’t big enough. And now they’re coming out with thermoformers that are capable of doing a forty-inch-wide tool.”
“We had plenty of jobs that were twenty-five inches one way,” continues Randy, “and we could do them half and half in the confines of the machine. But we had one job that was thirty by thirty, and we had to take off the doors.”
“We’re very fussy about the quality we give to our customers,” Randy explains, “and we don’t want to have to rely on other people to produce what we expect.”
“If we can’t do it, we don’t take it on,” says Joe. “We were at a point where we were maxed out here. We needed three things to expand our business: We needed more equipment, more people and more space.”
Once again, Lady Luck intervened. A local machine shop owner “was a bit under the gun with finances,” says Randy. “He was in a very high-tolerance type of industry - working in tenths - and couldn’t find qualified people to work for him. He was trying to do it all alone.”
The shop had a couple of Haas machines - a VF-2 and VF-5 - but, thanks to the depressed economy, finding enough work to keep them running was difficult. Hearing that J&R had plenty of work, and hoping they might send some his way, the shop owner rang them up.
“But we don’t farm out our work,” says Joe. “So we made him an offer to buy out his whole company . . . ”
“. . . and also bring him aboard here,” finishes Randy.
“It worked out for everybody,” says Joe. “By buying out the other company, we got two of the three things we needed to expand: We got two machines – we were only expecting to buy one – and we got another person in here.” As an added benefit, J&R also picked up the other shop’s existing customer base.
Space, however, was still an issue. Luckily, the Amarellos were able to lease additional space from the business next door to house the new machines. By the end of 2002, they were hard at work.
With five CNC machines in-house, says Joe, “Our biggest problem is keeping up with the machines. It’s very difficult to keep five Haas machines running without doing production, and we don’t do production here. Our type of work is very engineering involved. We have a lot of setups; it’s not uncommon to do ten setups in a day.”
To simplify and speed up the process, the Amarellos have installed nearly identical multi-vise fixturing systems on three of their five machines.
“Our VF-1, VF-2 and VF-3 are vise setups,” says Joe, “which allows us to do pieces twenty, thirty and forty inches long without taking a vise off. They’re all the same size vise, and they’re all on 10-inch centerlines. They’re perfectly in line and they stay there, which allows us to do changeovers more quickly.”
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“It was a nightmare,” says Joe. “We were losing work because we didn’t have the table size. We needed a bigger machine.”
As luck would have it, Randy came across a Haas VF-6 demo machine for sale on the Haas Automation website (http://www.haascnc.com/pre-owned/). The 64" x 32" x 30" travels of the machine were exactly what they needed, so Joe and Randy contacted Frank Kirbus, their sales rep from the local Haas Factory Outlet, and began negotiations. According to Randy, the VF-6 was up and running in the shop around July 2000.
Despite a depressed economy and a serious downturn in manufacturing, J&R Plastics thrived and continued to grow. By fall 2002, they had more work than they could handle, and were ready to expand again. Subcontracting their work, however, was not an option.
“Because of the type of work we do,” says Joe, “and the quality that we offer, we won’t farm out our work to another vendor. They don’t know the details of thermoforming, and no matter how good you go over it with them, there are always issues when the job comes back.”