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HOW I DID IT

How I Did It: Nicole Loftus, Zorch

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As told to Donna Fenn

Industry Leader: Business Services

Three-Year Growth: 10,822.2%

When Nicole Loftus picks up a cheap pen that doesn't work, she doesn't see a tchotchke. She sees dollar signs, because Loftus figures she can do a lot better. In 2002, Loftus launched Zorch, a business that is challenging the tired ways of the $19 billion promotional products industry. Zorch puts corporations directly in touch with a network of manufacturers that meet Zorch's quality standards. Loftus says she sleeps better at night knowing her customers are well taken care of.

Zorch means moving at light speed. Before I started the business, I was working for a company handling customers such as Bank One and Apple (NASDAQ:AAPL). I realized there were too many middlemen and too many people creating substandard, boring products that I would never dream of putting my clients' mark on.

There were three issues that kept popping up. First, buyers would come to me and say, "What's up with your industry? Why does something always go wrong with the order? How hard is it to get 20 shirts to a golf event?" The second issue was pricing. Customers would say, "You're charging way too much."

The third and biggest issue was quality. I'd sit across the table from Steve Jobs, who would insist on personally picking out the calculator to put the Apple logo on. He got it. A brand is an asset, and you need to protect it. Putting your mark on a product that isn't up to the quality of your brand dilutes it. I said, "I'm going to go out and start a company that people trust."

The first two years I spent building and researching. I made sure manufacturers had infrastructure: sourcing power overseas, technology, creative teams that could spot trends, robust operations, and great customer service.

Two major criteria for our manufacturers are product testing and safety. Most of them are domestic importers that source container loads of product every day. They might import a blank mug from China, but they put a logo on it in the U.S. They must prove that their products are tested. We don't want CNN and Wolf Blitzer talking about how much lead is in one of our manufacturers' coffee mugs.

A manufacturing partner that's committed to our clients and delivers will be "Zorched." We give the company a plaque with a big Z on it. We have 12 manufacturers that are Zorched. That means you get better real estate on our website, you get to participate in special stock programs, and you get full access to the end user.

I didn't hire a single employee from within my industry. Most people in the industry don't want to let the manufacturers communicate with the end user. I have a national sales force that's eight to 12 times bigger than my competitors'. That's because we use our manufacturers' sales forces to call on clients. There are probably 600 people in the combined sales force.

All the orders for branded merchandise -- like silk ties for AT&T (NYSE:T), solar cell backpacks for BP (NYSE:BP), and tennis bags for Citi (NYSE:C) -- come through our online system and go directly to the manufacturers. All we do is watch the activity; we don't touch it. It's like air traffic control. Three million dollars is our minimum contract size. When a contract is worth $5 million or $10 million, fast growth is easy.

Last updated: Sep 1, 2008




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