Invent It, Sell It, Bank It!: Make Your Million-Dollar Idea Into a Reality (27 page)

Start by visiting the Consumer Product Safety Commission website. It’s packed with information for consumers, businesses, and manufacturers alike. Also study California’s Proposition 65. California is aggressive about regulations and has the strictest restrictions regarding cancer-causing materials and chemicals of any state in the country. Prop 65 was an initiative that required California to post a list of cancer-causing materials and update it every year. Check to see if anything used for your product is included on that list. If your product can pass inspection in California, it can probably pass inspection anywhere else.

Fortunately, upon placing an order, many retailers will give you a terms and conditions guidebook that generally includes a list of manufacturing guidelines that must be met if you want to sell in their stores. You need to make sure that you meet all of their requirements, not just so that you can build a good relationship
with the store but also because noncompliance usually results in your being required to pay regulatory fines. In the worst-case scenario, you could be forced to take your product off the market until the issue is resolved.

How can you make sure your product passes inspection? Most of the time your retailers will give you quality assurance guidelines, and sometimes they’ll identify an issue and help you find specific help to address it. Ultimately, though, the responsibility to comply with rules and regulations falls on your shoulders.

QUALITY CONTROL IS YOUR JOB

Manufacturers generally ask their clients to pay 20 or 30 percent down upon signing a contract, with the rest due upon shipping. You want to know about any manufacturing imperfections before the order leaves the port or for the stores, because once your product ships, it will be too late to fix the problem and you’ll still be required to pay your remaining balance. Hire an inspection team to pull a percentage of your units at random from the production line. You tell the inspectors what to check—color, stitching, finish, joints, any relevant production details—and how much of a “tolerance” you will have for defects.

Tolerance for Defects

Most people set their tolerance levels at plus or minus 1 percent, giving the run a small amount of wiggle room for minor issues like tiny dirt spots or color that’s marginally off. So if your inspector pulls fifteen samples of your product and finds that there is only a small dirt spot or one loose thread on one item out of those fifteen, that’s a good indication that the production run overall meets your standards of quality. If the inspector notices that nine out of the fifteen samples have a zipper that catches
rather than glides smoothly back and forth, that’s a reliable indicator that there’s a problem with the entire batch.

Now you can show your factory the inspection results and demand that they fix the problem. You have leverage because you’re under no obligation to pay your balance until the product ships, so it’s in the factory’s best interest to comply. Don’t ever turn your back on your product, no matter how good your relationship is with your manufacturer. You have got to keep your eyes open (in person or through an inspection team) because no matter how good your relationship is with your manufacturer, glitches will happen. And when they do, you want to make sure that you aren’t forced to eat the cost of someone else’s mistake.

The Aches and Pains of Expansion

I began manufacturing overseas somewhat reluctantly, and in the beginning it was an extremely bumpy ride. For the first five years of my career I had exclusively created my consumer products out of plastic and made them all in Chicago. I did pay more than I would have had I gone overseas, but I liked that my products were being made in the United States, and that I was able to be at the factory all the time watching, learning, and making sure my products were good quality.

I owned close to thirty-five molds and was making over twenty-five successfully selling products. I was on a prolific creative roll. Then I realized it was time to start making things out of wood—that was just the natural next progression for me. I designed a new wooden jewelry box that I called the Gold and Silver Safekeeper. Unfortunately, I discovered that it would be extremely cost-prohibitive to make it in the United States. I sent my sample to several U.S. manufacturers to get quotes, but the same jewelry box I could make in China for $45 would have
cost
me $200-$250 to make it in the United States because of the
intensive labor, the parts, and the intricacies involved. I needed to make the product overseas or it would fail.

Then something exciting happened. QVC saw my prototype and selected it to be a “Today’s Special Value” (TSV) for November. A TSV is a product specially featured for a select twenty-four hours at a special low price that day only. November was the best selling time of the year. It was a spot that everyone who sold at QVC coveted, and I was ecstatic. I had no connections to overseas manufacturers, so QVC paired me up with a supplier they had worked with before. I had learned so much about dealing with American manufacturing, but now I needed to understand a whole new international regulatory and tariff system.

My jewelry boxes have an antitarnish lining that is made in the United States, which meant that the lining would have to be exported to China in order to be assembled into the boxes, then imported back into the United States in the finished product. That posed an unexpected problem. Factories have to have special licenses and quotas in order to export something into China only to export it back out again. It’s not something that’s done often, so though he had been doing business for years, this new supplier didn’t know he needed the license, nor how to get one. Now I was stuck. We needed to start manufacturing to make delivery on time for a November TSV, and time was running out. The TSV was a big deal to us and to QVC, my biggest customer, so everyone was in a bit of a panic.

If it sounds too good to be true, it probably is.

QVC had a vendor whom I’ll call Louis. Hearing about our situation, Louis told my director at QVC that he would do us all a favor and help me get the product made at no profit to him. Those were his words: no profit.

I asked Louis to sign a confidentiality noncompete agreement, which he promised he would do, but he urged me to immediately send him my sample overnight because his supplier from China was in his U.S. office for one day only and was leaving in the morning, and they needed to see the product. I was not comfortable with this. Normally I would never send samples of a brand-new product to get a manufacturing quote without first getting a signed confidentiality noncompete. I told him I’d prefer that he sign it now. He said there was no time—it was 8 p.m., and I had one hour to get the box to FedEx before it closed. He promised he would sign in the morning. This TSV opportunity was a big deal to me, so against my better judgment I sent the sample without his signature.

Don’t ever, EVER, do anything against your better judgment.

This supplier was a bad guy. He never sent back my confidentiality noncompete. He strung me along for weeks without showing me a sample. Two months later, he also had never signed our sourcing agreement, a document I send to all my suppliers and that people typically sign within a few days. He’d send it to me without redlining any of the changes he had made, which is highly unethical and forced my attorney and me to spend hours rereading the entire document every time it came back to us. We spent two months going back and forth over this document. I was trying to stick with him because the TSV was such a big deal to me and to my vice president and director at QVC.

The final straw came when he sent me back a final agreement stating that he would be the sole manufacturer not only for this jewelry box but also for any jewelry box I made in the future, and that I would only make a nickel per box! This from the man who had said he would help QVC and me as a favor, for no profit.
That’s when I called the VP at QVC, explained what happened, and told him that I had to pull out of the TSV because I couldn’t sell my soul to the devil. He understood.

I lost that wonderful pre-holiday spot, and by the end of the entire fiasco I was out $50,000 in legal fees. But proving my theory that the worst things that happen to us are often blessings in disguise, three great things happened as a result of this awful experience:

1. Right after, I met a supplier who did sign my confidentiality noncompete and we went on to make hundreds of products together.

2. That supplier, John, became a dear friend.

3. The following year, QVC selected the jewelry box for their November TSV, placing an even higher order than the year before.

Few people realize how complicated it can be to produce even a relatively simple-looking product. Dan and I eventually went to China to visit the factory where our wood full-length mirrored jewelry cabinets are made, and what we saw was impressive, even for us who were familiar with manufacturing processes. Every piece of the product—the frame, the earring bars, the bracelet bars, the necklace bars, the mirrors—are separate pieces that are made first and then assembled. Each has to be cut, stained, dried, and recoated, one
at a time. Then there’s the frame for the entire cabinet, which measures 60 × 3 × 14 inches. Once a frame is painted, the workers hang the piece on a giant hook attached to an overhead conveyer belt. Imagine walking into a factory the size of three football fields and looking up to see a merry-go-round system like what you might see at the dry cleaner’s, spinning these large cabinets around in a circle above your head. There’s no place to store them, so they just stay up there until they’re dry and ready to be removed for final assembly.

“The strongest swords are forged in the hottest fires.”

—C
HINESE
PROVERB

When we told the factory to make 40,000 of these mirrored jewelry cabinets, we could not imagine the scale such an order represented and how much space it would require. The product required many steps to assemble, from connecting the mirror to the frame, to lining the interior with antitarnish fabric, to inserting all the pieces inside that hold the jewelry—not to mention the sanding, the staining, and the thousands of packaging boxes. It was impressively well orchestrated and organized. People don’t realize what is involved in making many of the products they use every day. I was in awe.

PACKAGING

You want to work with a reputable, responsible manufacturer because you want to make sure that your customers have the best possible experience when they buy your product. But equally important is the experience your customers have with your product before the point of purchase. Your packaging is a stand-in for you, selling your product when you’re not around to demonstrate and explain its qualities and benefits. In the same way that the opening line of your pitch must be carefully crafted to engage and intrigue a buyer or investor, your package must telegraph everything you want people to know about your product—in a
single glance. It is what speaks to your consumer at the moment of truth, the point of sale, when consumers stand in front of a retail shelf and see your product lined up along with all the other competitors vying for attention. It should say, “Me. Choose me. I’m just what you need. Here’s why.”

Package design is a science, tapping into human emotions and even reinforcing consumers’ feelings about themselves. Tools are usually packaged in such a way that whoever picks them up feels a little bit handier, a little more confident that they really can build that deck in the backyard. Computers, mobile devices, and their respective accessories are often sleek and compact, appealing to a contemporary, minimalist aesthetic that makes buyers feel like they’re just a little bit cooler than they were before they made their purchase. Cosmetic and fragrance companies spend a fortune designing packaging that makes women feel beautiful and elegant when they buy a jar of cream or a bottle of perfume.