At PaperDirect, nobody worries about where the next hit product will come from. The Lyndhurst, N.J., business, which sells computer paper via catalog, counts on customers for great ideas.

Quarterly Show Us Your Stuff contests yield up to 500 suggestions per event, 5 to 10 of which "lead toward new developments," says president Warren Struhl.

Example: one customer matched PaperDirect papers, envelopes, brochures, labels, and cards in an attractive arrangement that became the model for a line of presentation sets. Another idea has prompted the company to organize a formal reseller program for the 20% of customers making a living from its product line.

"People were always sending in unsolicited stuff," recalls Struhl. "We thought we'd reward them for their efforts." The top entries win money (the first prize is $500 in company credit; runners-up get $50) and fame in the quarterly catalog's "Great Ideas from Our Customers" column. Three years of ideas have helped pump sales from $1.1 million in 1990 to about $70 million last year.

Another customer suggestion has led PaperDirect into a new niche. In January it launched Technique, a how-to magazine for desktop publishers. PaperDirect is building the circulation by leveraging its 500,000-name database of vocal shoppers. -- Vera B. Gibbons

* * *