By any measure, it was a modest startup. Michael Rock, a New York publicity photographer, made a hobby of shooting erotic pictures. With an initial investment of $500, he took a few favorite images, such as an undressed female mannequin in a store window and a naked man stretched out on a windowsill of an abandoned building, and pasted them on blank wedding invitations. Then he persuaded a Manhattan card store to buy four dozen for 50 cents each. The store sold them all within a week for $1 apiece.
Four years later, Rock's company, Rockshots Inc., does $800,000 in business annually and caters to the growing market for offbeat greeting cards. The cards run the gamut from the blatantly erotic or insulting to the merely provocative. Rockshots is one of thousands of small companies in what is loosely defined as the greeting card, novelty stationery, and gift business. Besides greeting cards, which predominate, typical items include desk accessories, message pads, calendars, stickers, small stuffed animals, puzzles, and posters.
Those who are successful in the business have in common a willingness to engage in some old-fashioned shoe-leather and seat-of-the-pants sales and marketing. Focus-group interviews, statistically reliable opinion research, large-scale test marketing, and other complex, expensive tools of modern marketing research are not needed. Neither are expensive sales promotion brochures, nor a large advertising budget, nor a large sales force.
The critical factor is to get consumer opinion on an idea at the retail level, before investing large sums for manufacturing a product. "The ultimate consumer is the only voter you're concerned with," says Charles Faraone, a former schoolteacher and accountant who founded Once Upon a Planet, a $1 million-a-year New York City card-and-novelty company. "Find a store that has compatible items," he counsels. "If necessary, beg them to take your product for free. You must have feedback from the consumer." Says Raymond Presti, Once Upon a Planet sales manager: "Even on consignment, a lot of retailers are hesitant to take new products. The retailer has to be sold on the person presenting the line."
Sometimes, however, a friendly manner and a good product just aren't enough to persuade retailers. As in many other types of businesses, Rock and Faraone found that hiring a network of representatives ensured wider distribution of their products and a spot in larger, more mainstream stores, where direct selling by an unknown manufacturer would be difficult. Sales representatives take 15% to 20% of the wholesale price of the cards, which is 50% of the listed retail price.
Rockshots struck a deal with Los Angeles-based Holst/Bowen Inc., a sales representative company. Holst/Bowen was paid 20% of revenue for its services, but the liaison allowed Rockshots to expand its distribution to the important California market and other parts of the West. At least as important, the link "gave us respectability," says Rock. "It allowed us to get into the legitimate, middle-class market."
To select a rep, Faraone suggests asking a retailer who carries your type of products to recommend someone. When Faraone first signs on a representative, he prefers to give the rep company a small, promising territory, then expand the area as the rep establishes a track record. Contracts, if used, are simple letters of agreement noting the territory to be covered "In my experience, after thousands of transactions," notes Faraone, "contracts are almost always unenforceable and only the lawyers end up benefiting."
An essential forum for many businesses is the trade show, which reverses the normal business practice by bringing the buyer to the seller. Approximately 14,000 buyers attended the National Stationery Show, the industry's largest, held last May in New York City.
In general, Faraone doesn't believe in working his own booth. "It would take me 10 years in the business before I could get the prime floor space that a good rep can by virtue of his reputation and ties in the business," he notes. Faraone spends up to $30,000 a year doing trade shows but argues, "Even if I were to do only $4,000 in orders, I wouldn't necessarily be discouraged. It's hard to put a dollar level on the contacts and ideas you get."
A booth should be designed to attract the attention of your primary buyers. Rockshots's booth at this year's show was imaginative, even by the sometimes bizarre standards of the industry: It centered around a 12-foot-by-12-foot replica of a high-tech public rest room, complete with toilet stall that visitors were free to decorate with scatological graffiti. In it were displayed a variety of wares, such as a card picturing Dorothy of The Wizard of Oz, who, having inadvertantly wandered into a gay leather bar, exclaims to her dog, "Toto, I don't think we're in Kansas anymore."
The display drew its share of casual browsers, buyers who would not stock the cards but were interested in keeping up with new trends. But it also drew buyers who were lured by the booth's deliberate appeal to a certain type of customer. Karen Balbinder, for example, saw the line as a potential hit with her Los Angeles stationery and gift-store clientele -- "very young, bright" people. Balbinder purchased 11 dozen all-occasion cards and 48 boxes of 15 each of Christmas cards, for a total cost of $225 -- an average order. Just as important to Rockshots as the specific order was the addition of Balbinder's name to the rep's list of clients to follow up.
While most types of businesses require hundreds of thousands of dollars in startup capital, the card-and-novelty industry can offer a chance of success to entrepreneurs with a good idea, a willingness to hound retailers for shelf or rack space, and a few thousand dollars of seed money. "People who have hustled all their lives corne into this business and drool," says Faraone.
Faraone cautions, however, that the gift business is an arena where many fools rush in. There are hundreds of flimsy ideas out there," people trying to sell everything from Preparation Z, a solution that claims to shrink your head and thus give the appearance of more hair, to Your Own Fault, a new version of the Pet Rock. Success takes more than unbridled optimism, suggests Faraone. As in any business, success requires commitment, professionalism, and a reasonable financial investment.