Hold on tight! April 29 2014
I live in a tiny little town called Santa Claus, Indiana – home of Holiday World and some of the top rated roller coasters in the nation. I've been on all of them many times, but I will tell you that those coasters are nothing in comparison to the roller coaster ride of owning my own business.
Last year I made some changes to my website to better accommodate my business. The vast majority of my sales were happening on amazon, so I cancelled my online shopping cart and imbedded my amazon store on my site to direct all traffic there. This saves me money each month and also boosts my amazon sales and traffic. Win, win!
I have discovered however that there are a few glitches when it comes to selling on amazon. For example, my product is not very searchable – meaning that most people don't pop onto amazon and search for a portable pizza cutter, and they don't necessarily even know that it exists. It's such a new and unique item that people aren't naturally looking for it; I have to try and figure out what they are searching for that might lead them to my product, and then include those search terms in my keywords. This does not make it impossible to sell on amazon, but it definitely slows my growth rate in comparison to someone selling a product like a diaper bag or an iPhone case – millions of people are searching for those products every day.
And then you occasionally run into someone else selling your product on amazon who you didn't even sell to. Over the past year I've seen listings for my product with a higher price than mine; those companies/people increase the price a bit so that if they get an order, they can order from me but then ship to their customer and make a little money in the process. I have also seen people who win a big giveaway (you've all seen those facebook contests, and I've participated in them by giving away free product!) – sometimes those winners turn around and list the products they've won on amazon... they are allowed to do this, but it can hurt my brand if they provide bad customer service or represent my product in a way that I wouldn't.
Despite all of the issues I face selling on amazon, let's face it – they are the retail giant right now. No where else could I possibly get the kind of exposure that I get with them. I have been selling on amazon since October 2012, so this year is the first year that I can compare sales month to month with the previous year, and it's turning out to truly be a roller coaster ride.
In the first four months of this year, my sales have ranged from 77% - 555% higher than those same months in 2013. I have had days when I sell up to a dozen Quick Splits a day, and then there are days when I don't sell a single one. Some weeks I get a few new product reviews (this helps boost sales too) and other times weeks go by without a single new review being posted. April has been my slowest month so far this year with only a 77% increase over April 2013. I will admit it's a downer – in comparison to a 555% increase, 77% feels like failure! But then it hit me – it's all about comparison, right? I did a little research, and found this average almost everywhere I looked: industry overall grows about the same rate as the economy, which is 2-3% in a good year. All of a sudden my 77% makes me feel like I'm killin' it! Maybe May will outdo my 555% (fingers crossed!) or maybe it will sink even lower than my 77%. Either way, as long as I see growth, I'm calling it a win.
I have no idea where this amazon roller coaster is taking me, but I know I need to hold on tight and be prepared for just about anything!
Can you hear me now? March 28 2014
Maybe I'm just not that social... I have to admit that I was not an early adopter of facebook or any of the other social media platforms for that matter. I really thought it was all for a younger crowd (I'm 41), and I had no interest in posting about my life and didn't think I had time to read what others were posting about theirs. Well that all changed when I started this business. I quickly learned that there are many ways to sell product, but one absolute necessity is to have a presence on social media.
My primary target market is parents with young kids. Many of my customers buy The Quick Split as a gift also, but the person most often using my product has kids ranging in age between one and six. These women and men are generally in their twenties and thirties, and they are almost always on social media. So if I want them to be able to find me, interact with me, and share my info with their friends (yes, please!), I have to be on social media too.
I absolutely love to interact with my customers, but it's a struggle to figure out exactly what they want to see. As a business owner, there is a fine line between posting often enough to capture attention but not posting too often that people get annoyed and hide you from their newsfeed. You run contests and offer discounts and free giveaways so people will like your page and follow you, but do those giveaways ever increase sales? Do customers want to see jokes and shared posts or a behind the scenes look into your business?
And then there is the issue of social media ads... I don't know about you, but I don't really care to see ads in my facebook and instagram feeds. But as a business owner, it sure seems like a great way to reach my target market and let more people know about my product.
Many years ago when I had the idea for The Quick Split, I had no clue that being a social media guru would help sell it. I realized last year that it was time to step up my game – I was already on facebook, twitter, linked in and pinterest; over the last several months I started this blog and joined instagram, google+ and tumblr. Trying to stay connected on all of these platforms makes me feel like I'm screaming about my business all over the place, but realistically I know that it's barely a whisper. I'm such a beginner in the world of social media, and I have a long way to grow. This part of running a business does not come super easy to me, but in today's world it's do or die. Or maybe I should just hand this piece over to my kids – one of them is already a teenager and would probably be much better at it than me!
The expert in anything was once a beginner.
Girl talk March 19 2014
I've only met one of these women in person, but let me tell you why I absolutely love this group of incredibly brave, brilliant, successful women (and another 80 of them who aren't pictured) – they are all in the business of helping other women, no strings attached. Seriously – no strings. This may not seem like a big deal, but I'm here to tell you that it is.
I was lucky enough to meet the founder of Mompact – Shelley Straitiff – at the ABC Kids Expo back in 2011. She liked The Quick Split and generously invited me to join this fine group of entrepreneurs that she calls Mompact. She has a huge heart, a business mind, and a vision of helping mompreneurs succeed in selling their products in mass retail.
I made so many contacts at the ABC Expo, and I really wasn't sure which contacts would "pan out" after I got home. I soon learned that meeting Shelley and joining this amazing and unique group made the whole trip worthwhile.
There are 94 current members that make up this private facebook group called Mompact. All 94 women have developed a product of some kind in an effort to solve a problem, offer a unique solution, or bring something totally new to the marketplace. These women cover the gamut with their products; we represent everything from feeding and travel products to clothing and accessories. Many of the women are at different stages with those products – some are in the idea and prototype stage, some are in big box retail, some are selling online, and some are exploring the option of licensing their product to a larger company. The one thing we all have in common is that we share advice openly and free of charge.
There are all kinds of women (and men) who have built a career around selling their business advice and coaching services to other entrepreneurs, offering to help them get rich quick or make a million with their idea. Now I'm not saying that these services aren't valid or beneficial – I've never used them, so I can't speak from experience either way. But the 94 of us that come together as Mompact offer this same advice to each other for free. Off and on throughout the day, the women of Mompact post questions in the group – asking for advice about website hosting, credit card processing, inventory forecasting, manufacturing, accounting, PR, social media, selling on amazon, working with bloggers – just to name a few. We share stories of balancing work and family (successes and failures) and all things related to being a mom in business. Most of the questions posted are answered within minutes by multiple women, sometimes offering a variety of advice and other times echoing the opinions of others. No one in the group is trying to sell a service to anyone else; everyone is focused on building each other up and celebrating the successes (big and small) of the other women and their businesses. In a world of extreme competition, this is brilliantly refreshing.
Success is different for every person and every business. The Mompact women have different ideas about what success means to each of them and their businesses, but they are all united in the goal of helping other women achieve their own success.
What would our world look like if we all applied this to our everyday lives, personally and professionally? Can we criticize less, encourage more, and always try to build each other up? Isn't there enough room for us to all be successful?
"You don't need a reason to help other people."
R you kidding me? February 28 2014
Babies R Us seemed like a logical place for The Quick Split when I began this journey. I met a buyer at the ABC Kids Expo in October of 2011 who was interested in my product and gave me her business card. I communicated with that buyer for several months before hearing that they weren't ready to carry it in their stores, but they would definitely like to carry it on their website. So I had two options: I could either drop ship it myself for them (the customer orders, BRU sends me an email with order information, and I package and ship directly to the customer) or I could work with a distribution company to drop ship for me. Working with a distributor would mean that they order inventory from me, warehouse it, and ship directly to the BRU customer when an order is placed. While this option would obviously be easier for me (I wouldn't do any shipping), it also means the distributor would get a cut of the profits. Since I was operating on a shoestring budget, I decided to drop ship myself.
This decision set off a chain reaction of hoops I had to jump through. Since I chose to drop ship myself, I was required to become a Toys R Us / Babies R Us vendor. To be a vendor, TRU/BRU requires you to carry a $5 million insurance policy and be EDI (Electronic Data Interchange) capable. They require a lot of other things too, but these were the two biggies for me. I feverishly started researching EDI companies and getting quotes. I knew this would be an added cost, but it was one I was willing to absorb in order to do business with such a big company. This was all happening in late 2012 when I still thought my vision of success included big box retail. The other huge increase in cost was the $5 million insurance requirement. This added another $1500 onto my operating cost per year, but again – I hoped it would be worth it when I was selling with Babies R Us.
So at this point, it's December of 2012 and I had about fourteen months of my time invested in this slow process. I added the increased insurance to my plan, because I was required to submit a certificate of insurance with all of the other documentation. I had selected an EDI company and was ready to run with that. I was excited about all of this, but at the same time wondering if my sales would be high enough to cover all of these added costs.
In January of 2013 I received my "welcome" email that everything was approved. I began trudging through the mountain of information with specifics about working with them. I received information outlining their EDI requirements. What I learned (after paying the extra money for insurance and spending what was now fifteen months working out details) was this: Babies R Us requires you to communicate with them through EDI multiple times a day, every day. More specifically, I would need to be sitting at my desk every day, all day or pay someone to do this piece for me. And all I could think was: are you kidding me? Why had this information not been presented to me sooner in this process, perhaps before I shelled out the additional $1500 for insurance? Is this something I just should have known? Should have asked about? Should have researched better? I could not afford to be chained to my desk for one vendor, and I could not afford to pay anyone to do this for me. So I decided to chalk this up as a $1500, fifteen month lesson. Painful.
I was sick to my stomach over this for a bit, and then I moved on. Quickly. I found a distribution company to work with – they purchased a case of inventory from me and would drop ship directly to any Toys R Us / Babies R Us customers who ordered off of their website. I shipped that small case (only 12 units – don't think it was a bigger deal than it was!) to the distributor in May of 2013, and my product was live shortly after that on the R Us website. And here we are, nine months later, and they have never reordered. It's still on their site, but I honestly have no idea why anyone would order there. I've learned that online customers generally find a product and then check amazon to see if it's available there with free shipping. And mine is. So who would order from R Us and pay shipping if you can order from amazon and get free shipping? Apparently no one since R Us has only sold at most 12 units in the last nine months, while I sold that many on amazon during the first couple of days in January alone.
It was an expensive lesson, but I'm glad I could cut my losses and move on.
Sometimes you win, sometimes you learn.
Blessings in disguise February 18 2014
As I've said before, when I first set out on this journey my vision of success included selling The Quick Split in big box retail. So when it came to making decisions about the packaging, I thought my only choice was blister packaging that would show off my product and allow it to hang on a store peg. I designed the blister packaging, and the first two manufacturing orders I placed were shipped to me with inventory in that packaging.
A short seven months into selling The Quick Split, I learned through an amazon customer that I had major problems with my stainless steel blades. The problems included bad scratches on the surface and roughness along the edge. Because the inventory came to me already packaged, I could only see one side of the blade and had shipped product to amazon that was defective. Not only did I have to get all of my amazon product shipped back to me, but I also had to inspect every item that I had here in inventory. In order to do this, I ripped apart over 1000 blister packages and inspected each blade individually – front and back.
I realized quickly during this agonizing process that not only did I need a new stainless steel vendor, but it was time to revamp my packaging – I needed to be able to more closely inspect my product. Plus, in those first seven months I had learned so much about getting into big box retail that I didn't even necessarily want to go that route anymore. So many of the big guys (Walmart, Target, Babies R Us, etc.) charge crazy big slotting fees ($10,000-$50,000) just to give you shelf space, plus they want rock bottom pricing and sometimes even require you to repackage just for them. Often times if they order and don't sell through all of the product they ordered, they will require you to buy it back and pay them additional fees. And on top of that, some of them don't pay you until they get paid which could be months.
So if I wasn't going to sell in big box and I wanted the ability to inspect my inventory better, I needed new packaging. I learned a couple of key things during this time also : 1) my product was being purchased frequently as a gift, and 2) my amazon sales were rapidly increasing. Well guess what? A simple little poly bag is the perfect packaging for amazon, and it would save me $.61 per unit in comparison to the blister packaging cost. Also, a cute little organza drawstring bag makes my product look way more appealing as a gift, and it would save me $.25 per unit. Bye bye blister packaging!
A terrible one star review on amazon seemed like major chaos and the end of the world when it happened, but that angry customer tipped me off to a problem with my blades which in turn allowed me to fine tune my packaging while also saving me money. I expressed my gratitude to him for bringing this problem to my attention, and he actually removed his review because he appreciated my honesty and customer service.
It's not easy, but I'm trying to be more open to the chaos in my life when it hits me like a ton of bricks. You just never know when that chaos is actually going to be a blessing in disguise.
Amazing amazon February 05 2014
So I decided in October of 2012 that I really needed to take the plunge and list on amazon. I love shopping amazon as a customer because of their free shipping and huge selection, and I knew I would benefit from being listed on amazon as a supplier because of their ginormous customer base.
There are a couple of different ways to sell on amazon:
You can list your products and fulfill the orders yourself – with this option amazon makes a commission on your sales (15% for my category), plus they collect $1 per order but you do not pay them a monthly fee, fulfillment fee, or inventory/storage fees.
You can also list your products as FBA (Fulfillment by Amazon) – with this option, you pay them $39.99/month, but that gives your product "prime" status: your product ships free of charge to all amazon prime members, and also free of charge to anyone spending $35 or more. They still make commission on your sales (again 15%), but you do not pay them the $1 per order fee. Other charges you incur are fulfillment and inventory/storage fees because you are shipping product to their warehouse and they are shipping it for you to your customers.
I opted for the FBA option. I know lots of amazon customers only browse products that are FBA, and I wanted as many eyes on my products as possible. I will tell you that while I think listing on amazon is probably the single best thing I've done so far for my business, it is not a quick process. They require an enormous amount of product information, they have specific rules for the type of images you can add to your listings, and they have very strict specifications for packaging your product and shipping inventory to their warehouse. It took several weeks for me to muddle through all of their requirements, and my listings were live in November of 2012.
Listing your products on amazon does not instantly equate to gobs of orders. As you get orders, positive product reviews and positive customer feedback, your product shows up higher and higher in search results. As your product shows up higher in search results, you get more orders. So it's a constant cycle of more orders & reviews = higher rankings = more orders, etc. Although a lot of customers hate to write product reviews, those product reviews actually improve your ranking on amazon and lead to more orders, so they are really important to those of us selling there.
November and December of 2012 were both very slow amazon sales months for me since I just got listed. 2013 was my first full year on amazon, and my sales throughout the year increased steadily. There are definitely a few glitches to selling on amazon (more on that later), but amazon was my largest source of business income for 2013. As of today, I am seeing a 555% increase in my product sales over last year. I don't know where else I could achieve this kind of amazing growth for my product. If anyone has any ideas, I'd love to hear them! ;)
A little bit of this, a little bit of that January 21 2014
For the first six months that I was selling product (May - October of 2012), it felt a little like throwing jello at the wall to see where it would stick. I wanted to explore as many avenues for selling as possible. The first – and what seemed like the most obvious – was my own website. I immediately sent out press releases to my local newspapers and many national magazines. I sent a few samples out to bloggers who reviewed my product and helped spread the word through their websites and facebook pages. A few local boutiques were interested in carrying my product, and I sold to them at wholesale cost (50% of retail cost) so they could sell in their stores. I spoke with subscription box companies about including my product in their monthly boxes to their customers. I sent out about ten product sample kits to large retailers (including catalog companies, tv shopping channels, and a couple of big box retailers) hoping that they would want to add The Quick Split to their product offering.
And this is how all of that went those first six months:
Two local newspapers ran articles about my new product and company (check it out here if interested).
The bloggers that reviewed my product did a great job (and might I add received my product free of charge), but I didn't notice any real spike in sales from their reviews – their followers seemed to be more interested in free giveaways.
Although several local boutiques purchased small cases of my product to sell, only one of those panned out to be really consistent with reorders.
The subscription box services thought my product was great, but most wanted to pay me a mere 30% of retail value or wanted the product free and said I should consider it a marketing expense. Seriously???
And I literally spent months chasing down answers from the product sample kits that I sent out. After about 6 months, I was left with a we might be interested from only one of them (that happened to be Babies R Us – more on that later).
I was moving product, but I wanted to take it to the next level. I just wasn't getting the kind of traffic and exposure that I needed – it was time to pull out the big guns. The Quick Split was headed to amazon.
11 years in the making January 13 2014
In the last post, I left off with purchase orders sent to my manufacturers back in November of 2011. I was looking at a 14-16 week lead-time for completion of my first order, which would put my delivery date near March of 2012. Although I had already filed federal and state papers to officially launch my business, there was an immense amount of prep required to take it to the next level of actually selling a product.
I opened a business checking account and applied for a business credit card. I prepped my website for ordering by adding a shopping cart to my site and finding a company to capture credit card information as well as a company to process that credit card information. I opened an account with Square so I could process credit cards on my phone for face-to-face orders. I set my business up online to collect Indiana sales tax. I ordered shipping supplies – bubble mailers, boxes, shipping labels, tape, etc. And I ordered storage shelves for my office so I had someplace to keep the shipping supplies and the inventory that I was *patiently* waiting on.
My 14-16 week projected lead-time turned into a reality of 6 months. I took every bit of that 6 months to get things in order so I would be ready to go the day inventory arrived. And I was. I received 500 units of The Quick Split on May 3, 2012 and sold my first units that same day.
What began as an idea 11 years earlier in 2001, I now had successfully brought to life as a patented, USA made product that was officially on the market.
One of my faves – "Never give up on a dream just because of the time it will take to accomplish it. The time will pass anyway."
God is using facebook January 08 2014
Instead of my normal "this is how The Quick Split came into existence" post, I want to share something that I think is pretty incredible. I know that there are all kinds of complaints out there about facebook, and I totally agree that it isn't all good. But let me tell you that I have proof now that God is using facebook. I'm not saying He has a profile page, but hear me out...
I am involved with a volunteer program in my community called CASA – Court Appointed Special Advocate. We work with abused and neglected children right here in our own county. A lot of these kids do not come from a place of abundance – abundant toys, abundant clothes – they are in an environment classified as a "minimum sufficient level of care".
I have a friend who totally operates out of over abundant love, and she really listens to God when He speaks to her. She recently started a ministry at her church to collect winter items for those in need. She posted on facebook about this calling and ministry a few short weeks ago. Just yesterday I noticed another post from her that she now (already) has coats, hats, gloves, scarves and sweatshirts – all sizes and free to anyone in need.
This friend of mine is not someone who I bump into every day or even every week. If it wasn't for facebook, I would have not immediately known that she started the ministry, received donations, and was ready to spread the love (and warm clothes). Her ministry is now providing winter items to multiple kids in my county that CASA is working with, all because she thought to post it on facebook and I was lucky enough to see it.
Now I love a good, funny post just as much as the next gal, and I love to see pictures of my friends and family. I also use facebook regularly for my business. But what in the world would happen if more people used facebook to help others? Is it possible that we could all be doing more with it than we are right now? Couldn't it be a game changer? Just a little food for thought.
Hurry up to wait again December 18 2013
I came home from the ABC Kids Expo in September 2011 ready to proceed with manufacturing, and with a mountain of contacts to follow up with (I must have killed at least one large tree in my effort to stay organized with this). I also came home with some valuable new knowledge, specifically about keystone pricing. For those of you who are not familiar with this, it's really quite simple: everyone needs to double their money. So if a product costs you $5 to make, you should wholesale it for $10 and retail it for $20. I went to the show thinking that The Quick Split would retail for $10. I quickly learned that my cost would need to be $2.50 in order to achieve this price, and I was nowhere near that. So I came home and immediately changed the retail price to $15 and the wholesale price to $7.50. My cost of goods would fall anywhere between $3.50 - $5.50 depending on how many I ordered.
The show ended on September 26th, and on September 27th I emailed every single person who gave me a business card at the show. I had the strike while the iron's hot mentality, wanting to hurry up and contact everyone I had met while my product was still fresh in their minds. I planned to place my first order with my manufacturers in mid October, so I had a few weeks to secure orders and firm up what quantity I needed.
Some buyers placed small orders. A few buyers said they needed to buy from me at $5 and wanted to sell it for $10 instead of $15. One company told me my price would never be low enough for them unless I manufactured in China. A few large companies said they were interested and would like to have manufactured product samples in order to further review the product and make a decision.
It all boiled down to this: I would never be able to provide product samples to those large companies if I did not manufacture. But I did not have enough firm orders to go with a large quantity and get a better price per unit. So I made the decision to only order 500 units. This would get the ball rolling, and I could begin to sell and send samples out. My margins would not be as good as I had hoped for, but I didn't want to take the risk of ordering thousands of units that I may or may not be able to sell.
In November of 2011, I emailed purchase orders to my steel, plastic and packaging vendors. Because it was my first order, the anticipated lead-time for tooling + manufacturing was 14-16 weeks. And so I was presented yet again with another opportunity to practice the art of patience.
Rolling the dice December 04 2013
I made the decision to attend the ABC Kids Expo in Louisville which took place in September of 2011. This was the first trade show for The Quick Split. I had no idea whether I would pursue manufacturing after the show, so I was determined to build my booth on a shoestring budget. I needed to attend in order to determine if there was enough market interest to take the next step, but I was paying out of pocket for every expense related to the show. And there were many...
There is of course the basic booth expense. Plus added fees for electrical in the booth (to power the lighting + laptop) and a nice carpet pad since you are on your feet for four days straight. I had to carry liability insurance for the show, plus I needed business cards, flyers and banners. In an effort to save money, I took a table, chairs, and lighting from home. My booth was not the high end space that I would have liked for it to be, but it certainly worked.
My hubby took vacation days so he could work the show with me, and my parents kept the kids. I went to the show with the goal of determining if anyone would buy The Quick Split, and if so, how many would they buy? This show is attended by large and small buyers from across the U.S. plus several other countries. Some of these buyers own tiny little boutiques; others work for large companies like Toys R Us and Target.
I did not have any manufactured samples to sell; I only had one working prototype to demonstrate with and flyers and business cards to hand out. And let me tell you – I offered a flyer to every single person who walked past my booth. Lots of them stopped to talk. Many left business cards and told me that they would like to order if I ended up in manufacturing. It appeared that The Quick Split would be well received in the market, but was I ready to take the risk?
My husband and I are not big risk takers with our money. We don't play the stock market, and we are very conservative. Over dinner on the last night of the show, we discussed our options. I was torn about what to do. I truly believed in this product, but the thought of investing thousands of dollars on tooling and inventory that I hoped to sell and thought I could sell was very scary. My husband had a great analogy – he said we should look at this opportunity like our own little stock market. If we invested, we may not see a large return immediately. But if money trickles in for 5, 10 or even 20 years it will have been worth it in the long run. And wouldn't we regret it if we didn't at least give it a try?
So we agreed – we would roll the dice. The show wrapped up the next day and I came home ready to plunge into manufacturing and with a mountain of contacts to follow up with.
Gratitude November 27 2013
Wishing you Thanksgiving joy this week!
Bonus blog November 22 2013As a little pre-holiday teaser, check out this awesome collection of products by moms, for moms. Everything in this catalog is available now with a 15% discount!
Hit me again November 22 2013
Like I said in my last post, I had interest from the store manager at a local Walmart to become part of their "Local Supplier Program". But she only wanted to order 12 units. There was no way I could jump into the expense of tooling and manufacturing this product without knowing I could sell more. So I had to figure out how to do just that.
At about this time, I read an article in my local paper about a couple of guys who invented/created games. It explained how they – with one prototype – attended industry trade shows to determine market interest in their idea(s) and decide which ones to actually manufacture. That was a major lightbulb moment. I had a working prototype and also needed to determine market interest. I would attend an industry trade show.
Let me tell you that God really had my back here. This was 2011. When I began researching possible trade shows to attend, I found out instantly that the ABC Kids Expo was THE trade show for anyone selling baby/juvenile products like mine. I also found out that this monster trade show is always held in Las Vegas. I knew I needed to prove market interest, but of course I wanted to spend as little as possible doing that in case the market interest wasn't there and I wound up not moving forward. The ABC Kids Expo had been held annually for 8 years – always in Vegas. As I'm researching, I'm seeing the dollar signs stack up as I think about shipping booth materials from southern Indiana to Vegas, not to mention flight and hotel expenses. Sure – I've always wanted to go to Vegas, but did I want to spend the money to attend a trade show there?
I'm thinking/praying do I really need to do this show? Will it be worth it to travel all the way across the country to find out if I can sell this product? And then I see it. The location for the 9th annual 2011 ABC Kids Expo is Louisville, Kentucky. For those of you who don't know, I live a mere 1 1/2 hours away from Louisville. I could easily drive there and haul all my materials myself.
This was another one of those God hitting me over the head with a sign sort of moments. I knew instantly that not only was I going to the trade show in Louisville, but maybe the reason it was moved to Louisville had something to do with me. Sure – there would be thousands of vendors and buyers there, but I knew in that moment that He orchestrated this in part for me.
From inventor to salesperson November 12 2013
To continue my Big Kahuna (AKA Walmart) story from my last post – it was 2010 and I was getting my business ready for a phone call to a store manager at a local Walmart. I had secured $2 million in liability insurance, GS1 UPC barcodes and certification through the WBENC as a woman owned business. I called one of my local Walmarts and requested a meeting with the store manager to present my product for review. She agreed. I spent the next two weeks feverishly working on my presentation.
The meeting went great. I actually met with two managers from two different stores. They loved my product and talked about merchandising it not only in the baby section but also in the camping/outdoor section and the gadget aisle. They had an upcoming regional meeting with seven other store managers and wanted to take my prototype to that meeting to get additional input. I was thrilled. I left that day with the paperwork needed to become a "Local Purchase Supplier", and I felt like I was in.
At the time of this presentation, I was aiming for a retail price of $9.95. I could manufacture it for about half that cost, and I thought I could sell it to Walmart for about $7.50 and they could turn around and sell it for $9.95. After the regional meeting of the store managers, I got a call with their feedback. They all loved the idea too but insisted that they could not sell it for more than $5.97 retail in their stores.
I don't know if you are aware, but the Walmart stores spread across this country are not all the same. The one I originally pitched to is considered an "upscale" Walmart, carries slightly different merchandise, and can get away with selling products at a higher price point. There are many of these, but this is the only one in my region. Where the other store managers thought the price should be reduced to $5.97, the local store manager who I originally met with felt that it would sell in her store at $9.95 and was willing to give it a try.
Now keep in mind at this point I had one working prototype. In order to manufacture this product, I had to invest in tooling that would be about the cost of a luxury car. My plan was to get a buy-in from Walmart large enough to justify this expense, or maybe even offer them an exclusive if they were willing to pay for my tooling costs. They were the first big box retailer that I approached, and I was willing to negotiate just about anything if it meant a large order like I wanted and needed to get this off the ground.
So I was hoping for an order of hundreds or (dare I dream) thousands of units.
The store manager I had been working with told me that she would like to start small to see how quickly they move. She wanted to buy twelve. That's right – twelve.
There was no way I could spend thousands of dollars on tooling for an order of only twelve units. This was the first time in the process that it really occurred to me... it's not all about the idea. You can have a great idea and a fancy smancy patent to protect it, but you have to be able to sell. It was time to figure out how to do just that. And hopefully more than twelve at a time.
The Big Kahuna November 07 2013
It was April of 2010. I had my utility patent, I had suppliers and quotes, and I had a working prototype. I decided the next step was to approach the big box retailers to get my foot in the door. Everybody wants to sell with the big boys, right? I needed to establish market interest before jumping into manufacturing. The logical first stop shop was the big kahuna – Walmart.
My thinking was that if I had interest from Walmart, they would place a big enough first order to justify the cost of manufacturing. I poured over Walmart's "Become a Supplier" section on their website, and I settled on going the route of becoming a "Local Supplier". This allows you to meet directly with a local store manager, show and discuss your product, and roll out at the local level first before launching nationally.
Working with the big kahuna (even on a local level) comes with big requirements including a UCC GS1 membership for UPC labels and a $2 million insurance package. The GS1 membership cost for me was $760 initially + a $160 annual renewal fee. The insurance cost was about $670 annually.
I found out through scouring their site that Walmart is trying to work more with minority suppliers, and women owned businesses fall under that minority umbrella. However, they require you to have proof that you are a woman owned business, and they prefer certification through the Women's Business Enterprise National Council (WBENC). This isn't as easy as filling out some forms online and being approved. It was a three month process that included me sending them not only notarized business documents but also things like my birth certificate and three years of tax returns. It also included a personal interview in my home office with a representative from their company. My certification was approved, with a price tag of $350 annually.
So in three short months, I had spent about $1800 just to be prepared to call a local store manager and request a meeting. Everyone always says that you have to spend money to make money, right? Unfortunately, so true.
Google is my BFF October 30 2013
Seriously – Google is probably the best tool I have at my disposal for my business. I know this is not breaking news – Google has been around for 15 years now. And yes – the internet can be a scary and dangerous place. BUT you can also find all the info you need to start and grow a business. Trust me on this one. I'm proof.
I had already used Google to find my patent agent and a company to make prototypes. I now needed to find manufacturers for my product: one for the plastic handle and cover and one for the stainless steel blade. So I spent some good, quality time with my friend Google. A ton of time, actually. Google led me to another great source: ThomasNet. I sent out about 100 quote requests before finding companies to work with. I wanted to keep the business in the Midwest if possible since that's where I live. I found a plastic manufacturer in Kentucky and a steel manufacturer right here in Indiana.
I wanted these companies to sign non-disclosure agreements. Did I have one for them to sign? No. But guess where I found a great template?
To make my business official, I needed to apply for a federal ID number and articles of incorporation within my state. Yip – back to Google for both of those – easy peasy!
Manufacturing was tied down, but I needed packaging in order to sell. Found that Ohio company on Google too!
I would eventually need UPC codes, sample balance sheets and purchase orders, a Dun and Bradstreet number, trade show info, credit card processing companies, and shipping supplies – just to name a few.
And I can't even tell you how many times I've been asked things like: Are you EDI capable? or Are you PCI compliant? when I had no idea what EDI and PCI even meant. Google has been a great source and a great teacher.
So I guess the moral of the story here is that you don't need to have all the "right connections" or a masters degree in business management (although that might come in handy) – knowledge is literally at the tip of your fingers!
Gut(God) instincts October 23 2013
This may not be what you would consider "normal" business advice, but so far it has served me very well: trust your gut. You know that little voice telling you something isn't quite right, or maybe – just maybe – they don't have my best interests in mind?
A few days after my patent issued, the letters and emails began pouring in from companies insisting I must work with them in order to be a success. These are actual snippets out of a few of these letters:
"After a brief review of your patent, I believe it has potential to be a successful As Seen On TV product!"
"This month, we started working with a $30 billion distributor to help us sell more inventions into more stores!"
"We will get your innovation reviewed by the right decision makers through our personalized one-on-one marketing campaign!"
"Right now, a number of corporations and investors are seeking out products and technologies within your industry, and we have proprietary access to these parties through our affiliates. Contact us immediately to discuss this important opportunity!"
"We are writing to you about a limited opportunity – we have been asked by a leading product company to find their next big hit. Your invention could be available for sale within 7-8 months, and you can earn an advance on royalties at signing!"
About a week after I started receiving all of this, my phone began ringing. Most of these companies followed up with urgent phone calls telling me that I needed to act fast so I didn't miss out on this exclusive opportunity with them. I was a newbie at this, so I'm a little sad to say I actually took their phone calls and gave them a chance to pitch. Each pitch was exactly the same – they could do great things for me and I would be an instant success!
Me: And what will this cost me?
And the sidestepping began. Most offered "bargains" – my cost would only be $7500 (or other numbers and percentages that always seemed like giving away my right arm and my firstborn child). When I explained to them that I didn't need their services, they became angry. Most told me that I couldn't succeed without them. They asked what my background and experience was, and "You don't actually think you can do this on your own, do you?".
I'm a praying person, so when something seems fishy I pray about it. Not all of my prayer questions are answered quickly, but this sure was. Trust your gut.
I quickly realized that I don't owe them a thing – I don't have to open every piece of mail I get, I don't have to reply to every email, I don't have to answer my phone every time it rings, and I certainly don't owe them an explanation about why I can and will do this without paying them to "help" me.
Could any of these companies have actually helped my business? And if their sales tactic involves belittling me, who cares? Not who I want to partner with.
The cart before the horse October 16 2013
So I paid an engineer friend to do professional CAD drawings in order to start the prototype and quote request process. I originally envisioned the handle as all stainless steel, but I learned instantly that this approach would be way too expensive to manufacture. I wanted it to have a rounded handle to keep it compact, and I thought running metal into the handle would make it attractive and durable. So off I went! Prototypes came along nicely, and I quickly ordered ten with the intent of sending some out as samples to potential buyers. In theory this was perfect. In reality, I should have just started with one and could have saved myself about $3500 if I would have.
After receiving all of my prototypes and fine tuning my manufacturing quotes, I learned that the tolerance required to perfectly match up the steel and the handle would be almost impossible to maintain in manufacturing. That's right – my ten prototypes were expensive and totally useless. And back to the drawing board I went.
Lesson learned: Never order more than one prototype at a time unless you know – without a doubt – that you have a final design.
The waiting game October 09 2013
Like I said in the last post, my patent application was submitted to the USPTO in December of 2007, and I did not get notice that it issued until March of 2010. A mere 27 months of waiting to find out if the small fortune I spent was going to amount to anything. When you apply for a patent, you pay the price regardless of whether or not you actually receive the patent. Patent agents and attorneys don't cut you any slack if the USPTO denies the claims. You're out the money either way.
And receiving notice that a utility patent has issued doesn't mean that you are on track to become an instant millionaire. It just means that the USPTO agrees that you have a unique idea, and you have the right to protect that idea in court if someone copies it. This was just the first hurdle on my path to producing this product. Not everyone goes this route, but I decided that if I could not obtain a utility patent I wasn't proceeding any further. So the wait began. And continued. For 27 months.
Back in 2007 when my application was submitted, the theme of "patience" was always part of my prayer life. My kids were 8, 5 and 3 at the time, and I will admit that I'm a bit of a control freak. Of course things in life (especially when kids are involved) are always somewhat out of control, so I recognized that I could use a bit more patience and prayed for it often (or all the time – whatever). Funny thing is that no matter how hard I prayed for it, God decided it might be better to teach me patience instead of giving it to me. And this was just one fine example of that.
So I waited. And learned patience. I was excited about my idea but didn't share details of it with anyone. I knew it was a no-go if the patent didn't issue. I didn't want to start on prototypes and run the risk of wasting money, and I didn't want my idea leaking to the wrong person or company and having a copycat product out there before I even had the chance to get it out there myself. So I patiently (sometimes) waited.
Do good things always come to those who wait? Definitely not. But in this case my patient waiting paid off. My patent issued and I was ready to move on to the next step: prototypes.
It's a God thing October 02 2013
The next step on the path to patenting my idea was not an easy one to take. The patentability search revealed that it might be possible to obtain a utility patent, but there were no guarantees. I was advised not to pursue a foreign patent unless I was willing to spend time and money traveling overseas to appear in court and protect it (I most definitely was not). I was also not interested in applying for a design patent – these are cheaper and easier to get, but they do not give as much protection since someone can make slight tweaks to your design and still come to market with a very similar product. So at this time I'm looking to pursue a U.S. utility patent for my idea. I received a quote from my patent agent for this step, and all things considered (his time + the USPTO filing fees) his quote came in around $5000. I was hesitant to spend the $900 for the patentability search, so you can imagine the struggle I had with the decision to spend an additional 5 grand with no guarantee that my patent would even be issued. No guarantee.
This was a huge decision that I could not make on my own. My husband was supportive and willing to go in either direction - stop or proceed. I was sitting in my office one morning praying about what to do. I'm a "hit me over the head with a sign" kind of gal, so as I'm praying for this specific direction, my phone rings. I was a freelance graphic designer (still am), and a client was calling about a new catalog project that paid a set, per page fee. When I hung up the phone and calculated my income for this job, it was the exact price of the quote I received from my patent agent. Exact – to the dollar. I took that as the exact sign I was looking for. I emailed my patent agent with the green light to proceed.
My twenty-four page patent application was sent to the USPTO on December 7th of 2007. Twenty-seven short (not!) months later, my patent issued. It was March 23rd, 2010, and I was now the proud owner of a United States Utility Patent.
The wide world of patents September 25 2013
So I had the idea and the sketch for this little gadget - now what? In my opinion, this idea was not worth pursuing unless I could patent it. But how in the world would I do that? I decided from the beginning that I would take baby steps to navigate this entire process – never jumping ahead and worrying about something that I would need to do or figure out in the future. One thing at a time, and at this time I needed to educate myself about patents.
I can honestly say that I had almost no knowledge about patents before beginning this process, but it's amazing what you can learn online! I immersed myself in all things patent – design vs. utility, provisional vs. non-provisional, claims, examiners, and office actions. Although I had a basic understanding of the process, I knew I needed professional help. I used ThomasNet.com to find a local patent agent, and I called him in April of 2007. I learned through him that the first step would be a "patentability search" – with a price tag of $900. Now don't get me wrong – I believed in this idea. But did I believe in it $900 worth?
This $900 would buy me the knowledge of whether or not there was any chance of patenting my idea. The search could come back that something else too similar already existed, or it could come back that no one else had ever patented anything like it. The idea had been in my head for 6 years, and I had to know.
Two months later I received my $900, 95 page patentability search results from my patent agent along with his summary. His professional opinion after conducting the search was "It is possible that a patent could be obtained. However, I believe that it will be difficult to obtain a utility patent due to the similarity with other references as listed herein. The resulting claims leading to successfully obtaining a utility patent may be quite narrow. If you feel that this device is useful and marketable, then pursuing patent protection as a defensive means could be worthwhile."
So it was "possible", might be "difficult", but could be "worthwhile". This felt like a victory!
Now what? September 18 2013
So I had the original idea for this handy little gadget back in 2001 when my first child was about a year old. I wanted to buy it, not invent it. But four years and two more kids later and it still didn't exist. Now I was cutting three plates of food when we were out to eat – the kids were 1, 3 and 5. This was 2005, and I was just busy. I still wanted to buy it – not invent it. Who has time for that???
Fast forward two years – it's now 2007, and I just can't quit thinking about this "product". I am a freelance graphic designer, and I had a little break in between projects. I decided on a whim to start sketching what this thing would actually look like, and I eventually mocked up an illustration on my computer. It still cracks me up to look back on these initial ideas – I really had no clue! You can see from the pic above that I originally envisioned it as all stainless steel with a plastic cover. Little did I know just how expensive that would be to manufacture! But none of that was really on my mind at all – at this point I wasn't thinking long-term. I just had a vision in my head that I had to put on paper.
And so I did. Now what?
It all started with an idea... September 12 2013
Ever since I launched The Quick Split®, I get asked all the time about product development, patents, manufacturing, pricing, packaging, retailers, etc. I am seeing firsthand that people are genuinely interested in this process - often times because they either have an idea for a product and have no idea how to pursue it, or they've just never talked with anyone who has done anything like this. I do not have a degree in entrepreneurship or business, but I think sharing the info I've learned over the past few years might enlighten or help someone.
I'm going to give you the info in little bits and pieces. And I'll probably throw in some info about other mom-owned companies that I've been introduced to and love. Plus I participate in product give-aways occasionally and will include info about those as well.
So here we go! It all started with an idea...
I had this one in early 2001. My first child was about a year old and was eating table food. Every time we went out to eat, I always wished for a portable pizza cutter that I could pull out of my diaper bag to quickly and easily cut her food into tiny pieces. I was using my pizza cutter at home to do the job – I found it to be so much faster, easier and less messy than using a fork/knife combo. I quickly deemed this a diaper bag staple and began my search for it. Well I looked everywhere for one – online and in stores – and found it did not exist. I was annoyed with this, but it never really entered my mind that I should/could create it. How in the world would I do that???
Have you ever had an idea for a product? Did you pursue it?