With an in-store demonstration business, you can sample your way to success.
From pizza to perfume to espresso machines, products are demonstrated in supermarkets, department stores and discount stores across the country. Most in-store demos are done by independent contractors who accept assignments from demo-service businesses. A demo service may be the ideal start-up business for you if you have good people skills and high stamina but little capital.
Katherine and Jeff Wise, founders of SalesTalk Inc., began doing in-store demos with hard goods, such as small kitchen appliances and vacuum cleaners. Food demos soon followed.
A decade ago, Jeff was president of a firm that demonstrated food mixers in stores. When an industry contact needed an ice cream machine to be demonstrated, Katherine formed SalesTalk Inc., recruiting friends, cake decorators, caterers and in-store demonstrators to join her as independent contractors. A growing reputation brought further clients. A year later, in 1987, Jeff quit his job and joined SalesTalk full time. In 1990, realizing food demos were a major market, the Wises bought out grocery-demo companies in Texas and Washington from contacts made through the Field Marketing Services Association (FMSA), an organization representing 200 demo companies.
Jeff stresses the importance of "hustling" for more volume to compensate for rising labor, insurance and other costs. "We began to expand so that we could serve our clients in other parts of the country, and we now do demos in all 50 states," he says. "In 1992 and 1993, Inc. magazine recognized SalesTalk as one of the 500 fastest growing companies in the United States."
Today, with offices in California, Washington, Georgia and Minnesota, SalesTalk Inc. has a pool of 20,000 demonstrators; some are independent contractors, while others are employees, depending on each state's requirements. Top Priority Sales, another company owned by the Wises, has an exclusive nationwide contract for non-food demos with PriceCostco, a discount membership warehouse chain.
Carlienne A. Frisch, of Lake Crystal, Minnesota, writes on business and travel topics. She has also worked in public relations for nonprofit organizations.
A Piece of the Pie
If you're looking to start your own demo business, rather than purchase an existing one, you needn't have a mountain of start-up capital. Maggie Dahl, 36, began Minnesota-based Demos Unlimited of Mankato on the proverbial shoestring.
"I got the idea while handing out pizza samples in a supermarket for my husband, who's a pizza company sales representative," Dahl says. "I saw the need for trained in-store demonstrators when the supermarket manager complimented my professionalism and asked me to do all of the store's demos."
Kevin Hormann, manager of Mankato's Hy-Vee supermarket, says in-store demos increase a product's sales because consumers can sample the product and can ask the demonstrator questions about it before buying. Stores that use a demo service have no labor or training costs, since the demonstrators are hired by the demo-service company.
Without a track record, a start-up demo service might have to offer a free demo to supermarket managers, who, if satisfied, may connect the entrepreneur with food distributors and manufacturers. With references from the supermarket manager, Dahl started her homebased business by mailing demonstration proposals to other supermarket managers in Mankato, recruiting neighbors and acquaintances to work as demonstrators, and holding a training session.
Dahl began with a typewriter, a phone, and access to a copier, later adding a computer and fax machine. She developed a corps of 300 in-store demonstrators to serve various supermarkets and discount stores in southern and central Minnesota and western Wisconsin.
"People skills are very important," says Dahl. "You must adapt to various community atmospheres. You need patience, tact, organizational ability, and plenty of stamina. You must be willing to work up to 60 hours a week the first few years--something I didn't realize when I began."
Dahl developed markets in new communities during the day and worked on established accounts each evening. She then hired Connie Mettler as a field coordinator, and demonstrator Pat Redig as an office manager. In 1987, when Redig bought into the business, she and Dahl moved the office to a downtown location. The company incorporated for liability and tax benefits, and carried liability insurance.
Together, the three women grew the business, each handling her own separate responsibilities. Redig arranged demos in existing markets, called demonstrators for assignments, and prepared company billings. She sent preliminary information about each demo product to the demonstrators. After completing a demo, the demonstrators filled out an activity report and sent it to Dahl and Redig, who paid their demonstrators biweekly.
As the field coordinator, Mettler recruited, interviewed, approved and scheduled new demonstrators. She also coordinated orientation, which included an explanation of operational guidelines, the company's history, the process of arranging and assigning demos, dress code, demo setup, procedure and cleanup, and the tax status of self-employed persons. Mettler worked side by side with demonstrators on their first few assignments. She also visited each store at least once a month to check the performance of the demonstrators. By providing references to store managers in new market areas, Mettler was able to generate new booking assignments.
The company's decade-long record of providing professional demonstrators reduced the need for travel. "I used to meet personally with representatives of companies we hadn't served before," Dahl says. "Later, representatives of new clients just sent me product information, often including a video for us to show demonstrators."
A Taste of Success
Demo-service businesses usually collect their fees from food brokers, distributors or manufacturers. That isn't always easy, according to Darla McCrary, owner of All Store Demos and Marketing Services Inc. in Greenville, Texas.
Employed by a food broker that hired demo services before she started All Store Demos in 1987, McCrary was therefore familiar with the trade. "I ran ads in newspapers and recruited demonstrators already working in stores," says McCrary. "Now I have access to about 2,000 demonstrators, serving Texas, Oklahoma, Louisiana, Kansas and Nebraska. I recruited six business acquaintances as territory managers. I already had contacts and a background in groceries."
McCrary warns newcomers to the demo business: "Cash flow is the number-one problem. Waiting 60 to 90 days for payment can put you under. I'd like to see an industry policy where demo services get 50 percent in advance."
The FMSA offers national and regional conventions, trade shows, seminars, workshops and a quarterly newsletter, The Communicator. To contact FMSA, write to P.O. Box 511, Farmington, CT 06034, call (800) 338-6232, or fax (203) 677-5365.
All Store Demos & Marketing Services Inc., 4216 Wesley St., #100, Greenville, TX 75401, (800) 950-8396.
Demos Unlimited of Mankato, P.O. Box 265, Mankato, MN 56002-0265, (507) 345-4005.
SalesTalk Inc., P.O. Box 50037, Palo Alto, CA 94303.