Right Hair, Right Now
While working her way through Clark Atlanta University by styling hair, 26-year-old Fatima Sokera kept running into a problem. When she removed artificial braids or other hair extensions that had been in a customer's hair for months, the client's real hair was often matted and full of glue. Since she was studying for her bachelor's degree in biology and a minor in chemistry, Sokera put her learning to work. The perfect solution to the problem was a cream she later dubbed Take Down. The wonder product dissolves and removes glue and other attaching media while loosening tangled hair.
While still in school, Sokera started her business by following a simple three-step process that can work for any underfinanced inventor:
1. Prove that consumers will buy your product in a test market.
2. Persuade people in your industry to support the product.
3. Get major distributors or buyers to purchase the product.
Don Debelak (firstname.lastname@example.org) is a new-business marketing consultant who has been introducing new products for more than 20 years. He is the author of Bringing Your Product to Market (John Wiley & Sons, $19.95, 800-225-5945).
Prove Your Product
At first, Sokera used Take Down only on her customers, but soon other stylists in the salon started calling her "Take Down girl" and sending customers to her whenever they wanted hair extensions removed. Sokera knew she had the only cream on the market that helped remove extensions.
After several months of success in the salon where she worked, Sokera bottled a small quantity of Take Down and hit the streets, calling on salons all over Georgia and neighboring states. To build de-mand, she left samples with salons and passed out fliers about her product to friends and family, as well as strangers on street corners and in supermarkets. In the end, an average of four out of 10 salons liked her product and started to buy it on a regular basis.
In 1997, her first year, Sokera sold just $15,000 to $20,000 worth of Take Down through her company, Fatima's Beautiful Braids Inc. Small as this figure was, it proved that customers would not only buy her product, but they would also reorder it. This step was essential because distributors are usually reluctant to take on unproven products, fearing they'll get stuck with unwanted inventory. Initially, Sokera tried to sell Take Down to beauty product distributors, but she couldn't get them to take her seriously. Such early rejection is common. Distributors and retailers see dozens of small, one-product companies disappear every year, so they prefer to wait and make sure a company lasts a year or two before buying its products. That's why you have to forge that small initial market with your own sales effort.
Sokera couldn't survive on $20,000 in sales per year, but she wasn't sure how to get wider distribution for her product. She called a Doraville, Georgia-based beauty products distributor, Jinny Corp., explaining she was a college student wanting to learn how to get a new product on the market. Roscoe Thomas, vice president of purchasing, met with her and explained the ins and outs of the business. He then gave Sokera a key contact, Chester Cavil of Target Marketing Group, a major manufacturers' representative in the Southeastern beauty products business. (Manufacturers' representatives are independent sales agents who take a 10 percent commission on sales they generate.)
Cavil was happy to meet with Sokera because Jinny Corp. was one of his biggest accounts. The first question he asked Sokera was, "Does your product work?"
"Of course," Sokera answered. Then she explained that salons were using and reordering her product. She didn't realize it at the time, but that's the only answer Cavil would believe. Proving a product will sell is all-important when starting a relationship with a broker.
Cavil felt the product's price needed to be raised to $8.99 to make enough money to pay all the industry middlemen and still support an advertising program. He took some samples and put them in 25 beauty supply stores in the Atlanta area to see if people would pay $8.99 for an 8-ounce bottle. The product sold, and salons soon wanted more. With Cavil's help and positive word-of-mouth, Sokera's 1998 sales soon hit $60,000--setting the stage for greater success.
Get The Big Accounts
In 1999, Sokera and Cavil started calling on bigger distributor accounts and began to pick up some small initial orders. Of course, Sokera would have liked to get big orders right away, but that's not what typically happens with new specialty items. Each salon would buy only a limited amount of Sokera's product simply because each salon was an independent business.
The only cost-effective way for Sokera to reach multiple salons was to work through a distributor who sold a variety of beauty products. When distributors first agreed to take on Sokera's product, they placed small orders because they hadn't yet built up a demand. Over time, however, the distributors convinced more and more salons to handle the product, which in turn allowed the distributor to steadily increase its orders. Cavil also got Sally Beauty Products, one of the nation's largest beauty supply chains, to carry the product line. While the small initial distributor and retailer orders weren't making Sokera rich, they were a key step toward building a substantial sales base. In 1999, Sokera's sales reached $150,000.
While everyone wants immediate success, if you're like most inventors, you don't have the financial resources needed for a large product launch. Instead, you probably need to follow Sokera's example and go through the three-step product introduction process. The benefits of the process are substantial. First, you can get started with a minimum investment; second, your reliance on assistance from others in your industry minimizes the number of mistakes you'll make; and third, you can still end up with a substantial business.
Don't get discouraged if success seems a long time coming. When it comes to introducing a new product, in many cases, slow and steady wins the race.
On The Q.T.
Sokera's formula contains natural, readily available ingredients. It's not processed in a particularly innovative way, and Sokera was told it probably would have to be altered to be patented. Unwilling to change the formula, she protected her idea by keeping it a trade secret--the same tactic KFC has used over the years to protect its "finger-lickin' good" chicken recipe.
A trade secret can be any formula, pattern, device, idea or process. In order to be considered a trade secret, it must: 1) give its owner a competitive advantage in the marketplace, and 2) be the subject of reasonable efforts for protection from outsiders. "Reasonable" is a vague term, but generally, you will keep an idea a trade secret if you get employees to sign nondisclosure agreements regarding the secret, and if you share no secret information with outsiders unless they sign nondisclosure agreements.
While trade secret status is not as powerful as a patent, trademark or copyright, it still offers some protection for your idea.
One advantage to trade secrets: Unlike a patent, they have no time limit. A utility patent expires after 20 years, while a trade secret can last forever. So keep those great ideas hush-hush!
Use publicity TO find your initial customers in business-to-business marketing. Trade magazines aimed at retail stores have extensive new-product sections that are usually just press releases from companies and inventors.
A published press release will definitely benefit your business. First, it's an effective sales tool. Showing that your product has been in major magazines gives you credibility when talking to potential customers. Second, you'll get a list of prospects from the magazine. Trade magazines contain response cards that readers can send in to request more information about products in ads or press releases. Often, new-product sales are made primarily to the people who respond to initial press releases.
To get the word out, check out these books:
- Bulletproof News Releases by Kay Borden (Franklin Sarrett Publishers, $18.95, 770-578-9410)
- The Complete Guide to Publicity by Joe Marconi (NTC Contemporary Publishing Group, $19.95, 800-323-4900)
Fatima's Beautiful Braids Inc., (770) 424-8189, http://www.millesucres.com/takedown
Jinny Corp., (770) 734-9222
Target Marketing Group, (404) 2411506