WE'VE MOVED!

I apologize for being away for such a long time. As with any new business, a lot's been happening and the blog has been sadly neglected. Some of the changes/happenings include a new website at www.paceasy.com, along with a new shopping cart reached either through PacEasy or through www.makelifeneat.com, and a new blog site! Still working on the color scheme and organization, but it's a necessary change. So, please visit at www.cluelessentrepreneurs.com

WHAT IS YOUR "NATURAL GIVE"?

This will be a quickie on a topic that is becoming more relevant as we become more well known—charitable giving.

Face it. When you are small and cash flow is a frequent struggle and bills are mounting, it is difficult to shell out cold, hard cash every time a charity rings, and it often does not feel right, which is what this blog is really about.

As a business, we are solicited to provide products and cash for charities, gift bags, raffles, auctions, and the like, or provide time to various causes and charitable events.

Some of these requests hit like a lead balloon, and some actually feel pretty good to me. I took a look at the types of things that felt good to us and those that did not, and this idea of a Natural Give hit me. Asked about startup businesses and charitable giving the other day, I turned to this idea of Natural Give.

I define Natural Give as that type of giving that feels effortless and sustainable to you and your company, that feels right whether it results in sales or PR or not. We have discovered that our natural gives are 1) small product donations to local community events for raffles and auctions; and 2) providing entrepreneurial mentoring time to local youth; and 3) providing information to and sharing experiences with other business people who read this blog. Having defined our Natural Give, we stick with it. We do not sponsor teams, or donate cash or multitudes of gift bag freebies to local organizations (one organization wanted a gift bag donation of 300 pieces, a little much for us right now).

Peter Shankman’s help-a-reporter site is a great example of a very successful Natural Give that I am sure involved some money, but mostly Peter’s time and his natural talent for connecting people. In an effort to help reporters and sources get together, Peter created a thrice-daily email that in a very short time has reached over 16,000 people, connecting them all and helping everyone. We have certainly benefited from help-a-reporter, and the reporters we have contacted have certainly benefited from talking to us.

So, instead of feeling guilty every time you are solicited to give, find your Natural Give and stick to it. Remember that there are others out there whose Natural Give is different from yours, so many types of giving are occurring all over the place, even though you are not participating in all of them.

SCAMS

The other morning I received an intriguing email from someone wanting price lists, if I shipped overseas, and if I took credit cards. We startup manufacturers love to get emails like these, but this one just did not seem right. Here is the text:

Hello Sales,

I am interested in purchasing some of your products, I will like to know if you can ship directly to Australia, I also want you to know my mode of payment for this order is via Credit Card. Get back to me if you can ship to that destination and also if you accept the payment type I indicated. Kindly return this email with your price list of your products..

I await your quick response.

Kind Regards.

Mario Hernandez

Addresss

3M SUPPLY AU

184 Darley Street

Mona Vale,NSW 2103

Australia

Phone: +61 243 607 865

FAX: +61 243 636 6785

I put the email address in Google, and not much popped up, but on Mr. Pinball's site, this address was listed on the scammers page. Thank you Mr. Pinball! I emailed Mr. Pinball, thanking him for taking the time to keep up the scammers page, and he sent back some very helpful information:

Hi Gretchen.

I'm glad you found out about this thief. We are contacted daily by people like yourself who discovered our list of scammers and are grateful they found us.

If you run across any more of these types of scammers, please forward their emails to us and we'll post their information for all to see.

These scams are primarily from outside the USA and as such, little can be done about them. If they have a confederate inside the US (such as someone sending a counterfeit check) then that US-based person can be prosecuted.

I recommend any of the following courses of action.

1. Ignore any further contact from the scammer. They will just go away because they will realize that they are getting nowhere with you.

2. Lead them on and let them believe you are interested. If they want to pay you with a credit card, then let them send you the credit card information.
Report the credit card information to the credit card company as stolen.
Then tell them the credit card number is bad. They will often volunteer another card. Repeat until they run out of numbers or lose interest.

3. If they want you to pay them for something, then just ignore them. Do NOT educate them as to how you found out they are a scammer. Educating them just makes them better at fooling the next person.

4. Report them to their email provider at the designated abuse address, which should be something like abuse@yahoo.com and get them to terminate the account. Be sure to include full headers so they can verify that the account is being used for fraud. Terminating an account will stop all the scams in progress with that account and so will probably be the most helpful. The main problem with doing this is that it may take several days for the provider to get around to verifying and terminating the account. Although I can't recommend this, sending lots of email to the account can fill up their mailbox and prevent them from getting mail. Doing this sort of action may violate your email provider's Terms of Service and may get you in trouble--that's why I don't recommend this--but be aware that it is probably the *most* effective action that can be taken once you report them to the appropriate abuse account.

Whatever you do, DO NOT cash the check they may send or send them money.
Attempting to cash a known counterfeit check is a felony. Sending them money means you will NEVER get the money back. These countries where they want you to wire the money do not require a government ID to pick up money, so any money you send will be lost with no recourse.

Regards,

Daina

I will know what to look for when something does not quite feel right from now on. I am sure as we grow, we will be the target of more types of scams having to do with manufacturing. I will post them as they happen.

For now, please do be careful and if you have been caught in a scam, please post a comment.

INDEPENDENT REPS PART 3 - HIRING ONE

First off, look for reps who work with products you sell. If you sell a toy product, don’t sign on with a rep who sells housewares. Second, look for reps who sell to those outlets and regions in which you are interested, i.e. brick-mortar retailers, catalogs, online retailers, large chain stores, independent specialty stores, nationwide, regionwide, etc. When putting out information about what you are searching for, be sure to include your parameters. Personally, I would steer clear of any rep who claims he/she can do it all and cover everything. It just does not work that way.

Based on our aforementioned education, when a rep is interested in our products, we have a sheet prepared that we hand to them. If they still feel like working with us after reading the information, then we move forward.

Here is what our sheet contains:

1. A company introduction. One short paragraph about what our company manufactures and where our products are currently sold (not names, just regionally or nationally).

2. A sentence or two defining what kind of rep you are looking for (e.g., “if you have proven experience with placing _________, __________, or _______, we would be interested in talking to you.”). Also, list your preferred outlets in this paragraph.

3. For our screening process, we ask for a resume that includes or is accompanied by 1) list of current retailers they work with, 2) three business references, 3) the names of three buyers the rep works with directly and their contact information, and 4) a list of product lines the rep represents.

We then include our full contact information and where to send the resume and supporting information.

In some cases, we will work with the rep without having all of the information. If the rep does not flinch at the information we request and run the other way, they probably are quite interested in selling our product and confident they can do it.

Once a rep is interested, we negotiate an agreement. We have devised our own agreement, and that is the one we use. It covers everything, including territories, payment terms, and the number of samples that will be provided.

Now, with all of this in place, we are comfortable working with reps and confident that we will not incur financial disasters in doing so. Good luck! Feel free to contact us with any questions.

INDEPENDENT REPS PART 2 - WHERE DO YOU FIND THEM?

What seems ages ago, we went searching on the Internet for reps. We emailed a couple, never heard back, or when we did, they did not want to rep our products. Why not? We will never know. We have been told that it’s because no matter how good your product is, reps just don’t like to touch new products because it’s too much work. I can’t back that up with any solid evidence. Our banker recommended us to a couple of local reps, clients of hers, but neither of them called us.

We went to a public trade show and a rep stopped by. He was interested in our products, made all sorts of pie-in-the-sky promises, then promptly disappeared from planet earth after the show and we never heard from him again. Lucky for us, he did not take any product or money with him. As green as we were, we probably would have given him whatever he wanted.

Others I know have been contacted by reps who saw their products in a store already, or online. Reps like this, I think, because they know the product is sellable.

Lately, a number of chat rooms and forums for specific industries have been popping up, where manufacturers, reps, retail business owners, and industry buyers chat, trade info, and scout prospects and products. One woman I know recently picked up a rep this way. These forums can be as specific as baby carriers and as general as toys. I have not yet discovered one for our industry, but it is probably only a matter of time.

Ultimately, we did not find any reps, they found us at the buyer shows we attended. We currently utilize three agencies. So far, the arrangement is working well, and we like the individuals with whom we deal.

I am sure there are other avenues for getting in front of reps (winning awards, Oprah contests, maybe a plug on Donny Deutsch). One way is to piggyback on an existing product. If you have a friend or family member making a similar item or in the same product category, you can probably contact the reps they work with to see if they might be interested in repping your product as well.

Another possibility is introductions by your booth neighbors at trade shows. We have actually seen this one work. For the most part, your booth neighbors are just as passionate about what they do as you are about what you do, and they love to share information and introduce you to their reps, especially if they know you are just starting out.

At our Chicago show, we spent three days next to Lightning Nuggets. A plug here for Lightning Nuggets: they manufacture fire starters from waste wood products and recycled paraffin. They are an excellent company, and we keep in touch with them. You can buy their products at Lowe’s, Fred Meyer, and maybe Home Depot. They were very nice, heard about our rep woes, and then proceeded to spend the next two days teaching us all about the world of reps. We came away from the show with priceless knowledge and the confidence that we could indeed “do” the independent rep thing.

I will cover what we learned about hiring reps in my next entry.

INDEPENDENT REPS PART 1 – THE HORROR OF IT ALL

Most startup manufacturers are led to believe that gathering a harem of reps around you is the holy grail, and that if a rep shows any interest at all, jump on board! Please, please do not leap just yet.

Horror stories abound about reps. One horror story I especially liked was the rep who demanded lots of samples and then ended up selling them at flea markets. Luckily, the client found out and stopped sending him samples before too much financial damage was done. I was chatting with one of my B Team buddies this morning, who relayed the story of the rep agency that took 80 samples off of her hands, after which she never heard from them again.

Most horror stories I have heard regard scads of samples provided, or scads of money paid, after which the rep is never heard from again. It is enough to make anyone recoil in horror at the thought of even acknowledging the existence of independent reps. This is unfortunate, as there are some excellent reps out there. Sorry reps, but if you are reading this blog, I can’t undo the damage that those who have gone before you have done.

We now work comfortably and confidently with three rep firms. In the next entry or two I will tell our tale, which I hope most of you will find useful.

TRADE SHOWS PART 14 - MOVING IN AND OUT THE FREEMAN WAY

The buyer shows add another layer of complexity to the trade show experience. It is called Freeman. Freeman is a company that contracts with the company actually organizing the show. Freeman corners the market for handling the freight, booth building, electrical, video and other services for trade show exhibitors at shows across the country. They utilize union labor for all of their activities, which works well for Stanley Tools, not so well for startup entrepreneurs. I have no problem with unions and one of our products, the Bin Buddie, is and will always be made with American labor.

Chicago

We had to ship our booth to Chicago. As mentioned in an earlier posting, it was quite easy! We packed our boxes, called Freeman, the Roadway truck came and loaded the boxes, and the next time we saw them was at our booth space in Chicago. Our boxes were taken away and stored for us during the show, then returned to for repacking. We repacked them, left them at the booth, and about a week later, they were delivered back to our doorstep in Seattle. It cost us $1000 for this. We have researched a cheaper way to do this, and it’s not the shipper that’s the problem—they were about $200-$400 of the bill. The other $$400-$800 was what Freeman charged to unload the boxes at the loading dock, take them to our booth, store our boxes, and then get them back on the truck after we had repacked them. In reality, we paid $400-$800 for what amounted to maybe an hour’s worth of work for a couple of guys, since our stuff was in six very manageable boxes weighing a total of 300lbs. Not a lot of stuff. At this rate, someone is making a ridiculous amount of money.

Las Vegas

Freeman bled us dry in Chicago, so we had no more money to feed them in Las Vegas. The man on the other end of the phone was nice, but he had trouble understanding the concept of PacEasy being a startup and not being able to pay $400-$800 for loading and unloading 300 pounds twice in the span of six weeks.

Freeman indicates that you can indeed haul your own stuff in and out at these shows, and herein lies the tale. You show up at the loading dock, but you can’t haul your own stuff in from there. Because the loading areas are controlled by union labor, you can only watch helplessly as they unload your stuff, put it on a cart and take it to your booth for you as you walk beside the cart. We had one cart load of stuff and the bill for the 15-minute load and walk job would have been approximately $300.

Alternatively, we were able to move in through the front doors. So, were able to park and move in just fine with our handtruck (which handtruck we had been told we could use) no problem. It was a longer walk, but that $300 we saved was the price of our hotel, so for us it was a no-brainer. We got our stuff in, got set up and had a very successful show.

Our decision not to utilize Freeman's services was confirmed when, on my trips to the booth, I kept passing a Teamster member and Freeman contractor napping on a roll of carpet. This might have been fine, except that this guy was on the clock, and the people standing in the nearest booth did not seem too happy that he was napping on their dime. Apparently and through no fault of their own (a Freeman problem, they explained), their boxes had not arrived at the booth. Mr. Teamster, apparently having nothing else to do, decided to nap until the goods arrived on the scene. His nap lasted 45 minutes. There was a great deal of activity occurring all over the place, so I find it hard to believe that there was nothing else for this man to do other than to take a nap on this exhibitor’s dime.

Moving out, was pretty much the same. We had our handtruck, a smaller cart, and as Thomas broke things down and packed boxes, I wheeled them out. For an hour we did this. On my last trip into the building, a young man began shouting across the lobby, then whistling. No one could figure out what was going on. Apparently, my handtruck was not “allowed” in the building. I found it rather odd that, after using it to move in and move most of my goods out, it would suddenly be a problem. In addition, many other exhibitors were doing the same thing. I checked with one of them and he indicated that he does this for most of his shows and this was the first time there had been a problem.

Apparently, we were all supposed to utilize the cart service. You know, the one that previously quoted me $300 for 15 minutes of labor. Additionally, the people running the cart service were to decide when we would be able to utilize the service, which could have been the next day if they felt like it. Remembering the napping Teamster, I informed the young man that I did not have $300, unleashed a verbal torrent of logical argument at him, and then turned and walked away, leaving him stunned and speechless. Gee, was it the logical part?

Freeman does have a rather vague definition of handtruck it uses to attempt to force you to pay $300 or more for 15 minutes of cart service, but since we had been approved on the way in, and we had loaded in and almost completely loaded out, I could not see what this person’s problem was. If he was concerned about a safety issue, one guy was using an electric cart with a plywood platform tied to the back of it with what looked to be a shoelace. The man would put the cart into high gear, and the platform would swing wildly from side to side, smacking aside anything in its path. No Teamster in sight showed the slightest interest in this man.

Overall, our best advice to startup entrepreneurs would be to keep your dealings with Freeman to a bare minimum and watch every fee they want to throw at you. Do as much as you can do yourself, and if you do have to utilize Freeman/, have someone at the booth at all times supervising to make sure you are not paying for nap time.