Yeager says Acco was simply responding to its customers' needs. "We were approached by our customers to come out with a similar product." She adds, "Of course, we put our spin on it through better manufacturing processes and better packaging. The product also has to meet a certain price point."
No matter how unique and proprietary Linda Froehlich may have perceived the SuperClip to be, in the cold-blooded world of merchandising, it amounted to just another commodity. The price point, as established by the industry, appears to be 99¢ for a package of five, and to meet it, manufacturers, playing at the global level, go offshore, where wage rates are low and environmental laws lax. But the Froehlichs, who grew up and have built their business in the Pittsburgh area, have a different frame of reference.
"We've always thought of ourselves as an American manufacturer," says Linda. Moreover, adds Richard, "we never thought about going offshore, because we wanted to keep control of the quality."
To date, the SuperClip has been made in McKees Rocks from domestic steel. Because of tough environmental laws in Pennsylvania, it's shipped out of state for plating, then back to Pittsburgh, where handicapped workers package it. In all, nine U.S. companies have a hand in producing the SuperClip.
Soon after Meyer first met Linda, he did some market research for her that revealed that people would pay a quarter for a single SuperClip. But a package of five SuperClips retailed for $2.49--or 50¢ each--in order to provide the retailer with its typical 50% markup. Linda contends that Ace has considerable development costs sunk into the product and that once some of those have been recouped, she will lower the price.
On paper that makes sense, given the risks assumed by the Froehlichs and the presumed protection the patent would afford. But the marketplace is less charitable.
"The customer looks only at price," counters Meyer. "Her challenge is, How does she educate the customer that she has a better product? Her prospects are, frankly, not bright." Indeed, as Froehlich began bird-dogging buyers at industry trade shows, she often ran smack into the pricing buzz saw. One buyer from Staples, finally wearying of being approached by Froehlich once too often, blew up, warning her: "Just stay away from me. Until I can sell it for 99¢, I don't even want to talk to you."
She says she received a similar rebuff from the buyer at OfficeMax, who, Froehlich claims, summoned Froehlich to her office in Cleveland on the pretext that she was ready to place an order. Nothing came of the meeting, and a few months later, the Acco MegaClip began appearing in OfficeMax's stores.
Enraged, Froehlich called the buyer. "I said to her, 'Don't you have any allegiance to the American worker?'
"She said to me, 'Get real, Linda. This is business. The only allegiance we have is to our employees and our shareholders.' " (Inc.'s calls to the buyer were not returned.)
As the knockoffs proliferated, the SuperClip began to lose the toeholds it already had. "The buyer at Kmart warned us that we were going to have a problem with price," recalls Richard. Kmart now sells a product in a package simply labeled "5 Super Clips." Those clips are made in Taiwan. Business with Target--which now sells "5 Really Big Clips"--similarly withered.
In May 1996 Linda sent the SuperClip off to Wal-Mart for inclusion in its "Support American Made" program. In mid-June Wal-Mart told her in a letter that the SuperClip had "commercial potential" and would be passed along to a buyer for further review. That process took four months. The deadline came and went, with no response from Wal-Mart. Then, in a letter dated December 2, 1996, Wal-Mart's buyer advised the Froehlichs, "I do not see a need for your product at this time...and I would like to bring the pricing of this product to your attention. I have received comparable products, and your cost is not in line with other manufacturers." In the meantime Wal-Mart had sourced the product from Taiwan in September. Wal-Mart's offering in the oversize-paper-clip category is a Mega Clip--not to be confused with Acco's MegaClip.
Such confusion, however, would be understandable. Based on tool-and-die markings, Richard says, both products might even come from the same factory in Taiwan.
Spokespersons for OfficeMax and Wal-Mart have no difficulty defending their dealings with Froehlich. "The way we procure a product is to always look at several sources. We consider new as well as existing vendors, and we look for the most effective way to present that product to the consumer," says Mike Weisbarth of OfficeMax. "There was nothing unusual or underhanded about our negotiations with Ace."
Daphne Davis of Wal-Mart says, "Even though we say a product may have commercial potential, it still may not be appropriate for our stores." She adds, like Weisbarth, that Wal-Mart always considers multiple sources. Never mind that Wal-Mart ordered its SuperClip knockoff in September--while it was in the midst of evaluating the Froehlichs' product. Evaluations, Davis contends, are done off-site by an independent party, and thus the buyer of the Mega Clip probably didn't even know of the SuperClip.
In truth, in the office-products industry, just as quality often takes a backseat to price, it also runs a distant second to depth. Vendors must be able to present a long line or, lacking that, be able to promise substantial volume in a shorter line.
"You have to be able to show a retailer you can do $250,000 worth of business with them in a single product, or else it's not worth it for them to set you up in their computer system," says Richard Froehlich. Don Peterson, an industry marketing consultant who worked at Acco for 27 years and is now a consultant to Ace, echoes that observation. "There's an edict that comes down from the top of these corporations: Cut the number of vendors," he says. "I've run into a number of companies with great products. Unfortunately, many retailers don't want to do business with one-product companies anymore." That results, he adds, in innovative and high-quality products' sometimes being shut out of the market. Says Peterson of the SuperClip, "This is the best-quality product, and they're not even getting the chance to bring it to market, because they've been aced out by other people who have used their leverage and clout to kill it."
