Editor's note: This tour of small businesses across the country highlights the imagination, diversity, and resilience of American enterprise.

The bankruptcy of American Apparel produced an embarrassment of riches for Judi Henderson-Townsend. In January, the retail chain shipped 900 nude fiberglass figures from closed stores to Mannequin Madness, her Oakland, California-based sale-and-rental business. But the new inventory included some unpopular models: kneeling mannequins, supine mannequins, headless mannequins. Henderson-Townsend just gave those away.

"It ended up being a huge promotion," she says. "People were telling their friends, posting on social media. They were taking mannequins away by the truckload."

The eruption of startups in 2000 tossed off a few odd sparks that keep the San Francisco Bay area from becoming a bland tech scene. Mannequin Madness is one of them. The company was born in San Francisco; now it occupies a warehouse in a mixed-use section of Oakland, just below Jack London Square. It is Henderson-Townsend's third location as she seeks ever-larger garrisons for her expanding silent army. The new space is inviting--it's light and airy with triple skylights, a showroom, a photo studio, and an event space. If not for the mannequins, it wouldn't be creepy at all.

Mannequin sales and rentals is not a big-ticket industry. Henderson-Townsend sells about 600 mannequins a month on average and expects to crack $1 million this year for the first time since the company's founding. But she gets some stock free, so margins are generally good. And uses for secondhand mannequins are surprisingly abundant. Businesses rent them for trade show booths. Women use them to display old bridal gowns at anniversary parties. Online vendors photograph garments on them. Artists buy them, whole and in pieces, for projects.

"Pinterest has been a huge boon because I did not realize how many crafty projects people can do with a mannequin," says Henderson-Townsend. "You can put a skirt of pine needles on it and make it into a Christmas tree. You can make it into a lamp or a table. One lady turned her mannequin into a mailbox.

"People are even putting them on drones now," she says.

Henderson-Townsend also caters to aficionados on the hunt for rare models, such as Rootstein-brand reproductions of former "it" girls like Joan Collins, Cher, and Twiggy. "They are typically gay men," she says of her mannequin collectors. "They dress them up. They create little vignettes in their houses."

A rare Rootstein mannequin might sell for $1,000. Less exotic products go for about $200. And the variety! There are mannequins with athletic builds and mannequins in yoga poses. Dancing mannequins and squatting mannequins. See-through mannequins and pregnant mannequins. Plus-size and ethnic models take a little longer to move. "We're conditioned to think mannequins are thin; they are tall; they are young; and they are Anglo," says Henderson-Townsend, a 50-plus-year-old African-American woman.

"For every dog there is a bone," she says. "For every person there is a mannequin."

An early failure

Looking back, Henderson-Townsend recognizes the omens. As a child, she would stand transfixed before holiday window displays. Her favorite toy was a Barbie. "I was an only child, and Barbie was a big companion for me," she says. "Really, mannequins are just giant Barbie dolls."

Henderson-Townsend studied journalism at the University of Southern California. But competition for jobs was fierce in the Woodward and Bernstein era, so she parlayed her communications skills into a corporate sales position at Johnson & Johnson. There she sold baby powder to retail chains and sutures to physicians and hospitals. "I liked the black-and-white of being in sales," says Henderson-Townsend. "But I was always more creative than what I was doing."

In 1986, with Johnson & Johnson planning to relocate her for the third time, Henderson-Townsend left, toting a severance package. She used that money to start a business acting as a rep between artists and advertising agencies. "I did it for two years and failed miserably," she says. Convinced she was not cut out for entrepreneurship, she sought safety in corporate America, selling United Airlines' computer reservation system to travel agents.

Henderson-Townsend was living in San Francisco--"in my 40s and low-grade miserable"--when the internet swept into town. "By some miracle" she landed a job at OnFlow, a startup selling rich-media advertising. It was her first experience in a small company. "I could see the decision-makers up close and personal," she says. "I saw that they were not any smarter than I was. They just had a lot more confidence."

Feeling entrepreneurial again, Henderson-Townsend took a business class. Still, no ideas presented themselves.

Then Tina Turner came to town.

Startups for dummies

In 2000, Henderson-Townsend was searching Craigslist for Tina Turner tickets when she stumbled across an ad from a man selling mannequins. She imagined covering a life-size human figure with mosaics and planting it in her backyard as a sculpture. Henderson-Townsend arranged to check out the merchandise.

"I went to see him at his warehouse," she says. "There were mannequins everywhere, in different stages of dismemberment. I was kind of creeped out."

The seller was a former window dresser, now owner of the only mannequin rental business in Northern California. Driven out by skyrocketing rents, he was moving back to Vermont within a week. Henderson-Townsend quizzed him about the business. Were mannequin rentals really a thing? He showed her a long list of clients.

Henderson-Townsend went home and talked to her husband. The next day she returned and paid $2,500 for the entire inventory.

The couple had recently redone their home's hardwood floors and planned to buy new furniture to match. Their living room, consequently, was empty. That's where the mannequins landed first. "There were bodies all over the place," says Henderson-Townsend. "It looked like we were having a big party."

When the seller dropped off his inventory, however, he neglected to hand over the customer list. By the time Henderson-Townsend called his local number, he had decamped. Without the list she wasn't sure how to drum up business. Setting up a website was a greater challenge for small businesses than it is today. And she'd just missed the deadline for that year's Yellow Pages.

"I realized if someone wanted to rent a mannequin, they were probably going to call Macy's or Nordstrom's," says Henderson-Townsend. "Well, those stores don't rent mannequins. But they were happy to refer those calls to me." Henderson-Townsend visited the visual merchandizing departments of department stores and clothing chains and asked them to send mannequin seekers her way.

She also offered to take unwanted mannequins off retailers' hands. For stores that were closing or remodeling, "it was cheaper to give them to me than to get big expensive dumpsters to throw them in," Henderson-Townsend says. To this day, Mannequin Madness gets much of its stock this way. Even when stores charge her for newer or very high-quality mannequins, it is for pennies on the dollar.

Henderson-Townsend's pitch to retailers is also environmental. Typically mannequins are fiberglass or Styrofoam, and their stands are metal or glass. "None of those things need to be put in landfill," she says. In 2003, the Environmental Protection Agency gave Mannequin Madness an award for repurposing 100,000 pounds of product in one year. "We do four times that now," Henderson-Townsend says.

Bring on the bodies

Shortly after 9/11, OnFlow closed down, and Henderson-Townsend decided to go all in with her startup. Mannequin Madness had a website by then, and business was growing. Around that time, Sears underwent a wide-scale remodeling and offered the new business its stock, boosting inventory to 600. "We took a cargo van one weekend and hit every Sears we could from Fresno to Sacramento, collecting mannequins," says Henderson-Townsend. That infusion of inventory allowed her to offer mannequins for sale as well as rental.

Henderson-Townsend took back her living room. But mannequins thronged the basement and garage of her home and huddled beneath canvas tents in the backyard.

One day, about five years after Henderson-Townsend had started the business, a city inspector accidentally wandered onto her block while she and her husband were on vacation. He discovered 60 coffin-shaped boxes--a shipment from Nike-- stacked in the couple's driveway. "They said I had to close shop or move," says Henderson-Townsend. Mannequin Madness relocated to a warehouse in Oakland. (Customers have always shopped for mannequins online but also buy from the warehouse. When the business was in Henderson-Townsend's home, they went there.)

Many early customers were eBay or Craigslist sellers wanting to display clothes or jewelry. Others needed mannequins for events. Days after her first website went live, a Canadian business rented one for a ski industry trade show in Tahoe, Nevada. "Someone might be opening a condo and the bottom floor was retail space they had not rented out yet," says Henderson-Townsend. "They would use mannequins to create little vignettes to suggest what the space could look like."

Mannequins and mannequin parts--on offer in the company's "Bone Yard"--were also put to more creative uses. "We got a lot of business at Halloween. Burning Man was a big part of our early years," says Henderson-Townsend.

Mannequins don't bend and so must be dismantled for every change of clothes. Henderson-Townsend encouraged customers to bring garments to her warehouse to see how an outfit looked on a particular model--and also how easy it was to get on and off. "If someone is taking a lot of photos they need something they can dress and undress quickly," she says. If it's a store window where the mannequin's clothes don't change and appearance is the priority, "they might want something that takes more effort but has more pop to it."

Swati Kapoor has been renting and buying mannequins from Henderson-Townsend for more than a decade to show off the sparkly, romantic garments she designs for Swati Couture Indian Fashions. She deploys the figures at trunk shows and bridal expos, and on her website and social media. "Because of Judi, I get to display my clothes on something so high-end that it is like a real, beautiful woman," says Kapoor. "I have been able to establish the image I want in people's minds without spending a ton of money."

Business models for models

In a niche industry, Henderson-Townsend realized, you've got to go as broad and deep as the product allows. For years, she has been playing variations on the mannequin-sales theme.

For example, most of Henderson-Townsend's used stock comes from her region: Harvesting mannequins from around the country is not economically feasible. Then, a few years ago, the women's apparel chain BeBe, in the midst of a remodeling, asked if she could help it find businesses like hers in all the places it had stores. "I said, 'Give me a couple of days,' and I started Googling," says Henderson-Townsend. Searching for the industry term "display figures," she was able to identify used mannequin companies in other cities; she then reached out to see if they could take BeBe's stock. Now she provides that service for other national retail chains, collecting a small fee from the mannequin companies for acting as a broker. "I am the FTD of mannequins," she says.

Henderson-Townsend not only helps retailers liquidate their mannequins, she also sells to them. Around 2008, Mannequin Madness became a drop-shipper for Chinese manufacturers so it could offer retail stores new products in more styles and at greater volume. "With only used mannequins, I was limiting myself because I could not go back and reorder," she says.

The new warehouse and showroom, meanwhile, caters to events such as trunk shows and corporate off-sites. And Henderson-Townsend will soon manufacture the first product of her own creation: neoprene bags to protect mannequins in transport.

"What I try to do is make myself like a lighthouse," she says. "I don't know everything that is out there. But when anyone is looking for something related to mannequins, I want them to come to me."

Published on: Sep 12, 2016