The start of start-ups

This month’s question

How did you get the idea to start your catalog, and what were your first steps?

A good idea for a business can come from anywhere. When asked the origin of the ideas for their catalogs, some of our panelists cited necessity, while others said that their catalogs were expressions of their lifestyles. But all our small catalogers this month agree that hard work and dedication were necessities to transform their ideas into viable business concepts.

Richard McWilliams is the president of Little Deer Isle, ME-based Harbor Farm, a catalog of country-themed gifts and accessories for the home. Annual sales, more than $1 million; annual circulation, more than 100,000.

The state of Maine has only about 1.5 million residents, mostly dispersed rather than living in one central area. So to have a business where we lived, my wife, Lee, and I knew that we needed to create a catalog. Since we could not bring the customers to us, we would bring our product to them.

Our first direct mail attempt was a brochure with a single product offering: a balsam fir wreath. We distributed that to a limited pool of people with the hopes of growing the business slowly and gradually. We scoured names from a variety of sources, including the Department of Motor Vehicles and local garden club membership lists. We now have a 24-page catalog in a newspaper format.

When we started we made a conscious decision not to use any outside capital, and this is something that always amazes people. This has not only forced us to rely on our own hard work and creative capabilities, but it has also prevented bankruptcy. If we had used capital, and things did not work out, we would have had a huge debt to worry about.

Angela Grieco is the owner of Dayton, OH-based Sundara, a catalog of gift baskets. Annual sales, less than $1 million; annual circulation, 300,000.

I started in the catalog business with a job at Pet Warehouse. While I was there, I juggled five titles, which enabled me to learn a lot about the industry. After six years I decided to go out on my own. I not only wanted to run my own business, but I also wanted it to be about the spirit of giving. So I decided on a catalog that features a collection of unique gifts.

Despite my background in print catalogs, I started on the Web because I had heard so much about how lucrative and easy it was to market in cyberspace. But I found that because I was a new name, it was hard to attract traffic and even more difficult to get visitors to trust the product. So I decided to start over and use a print catalog.

I contacted a list broker and rented a few lists to generate business. This was tricky at first, because when you have a new catalog there’s no way to know exactly who your customer will be. I began to get better responses after a Valentine’s Day-driven sales spurt allowed me to see who my customer really was.

To enable me to concentrate on the creative and marketing aspects of the catalog, I contracted an outside call center and outsourced fulfillment to a company that not only ships but also assembles the gift baskets.

Eleanor Edmondson is the owner of Atlanta-based Bas Bleu, a catalog of books and literary accessories and gifts. Annual sales, $9 million; annual circulation, 6 million.

I had been looking for an entrepreneurial venture when I heard that a favorite catalog of mine – a book catalog – had been sold, and I wished that I had bought it. As an English major who had worked for a publishing house early in my career, a book catalog seemed like a natural business idea. So instead of buying a book catalog, I started my own.

We mailed our first issue in the fall of 1994, and it’s been a labor of love – with the requisite ups and downs – ever since.

Before I started Bas Bleu, I did as much research and planning as I could. But soon it became clear that the time had come just to take a deep breath and jump in. We planned an initial mailing of 50,000, large enough to give us results we could analyze, but not so big that it would break the bank. The sales results for that first catalog were not inspiring, but the emotional reaction from potential customers, such as enthusiastic letters, faxes, and phone calls with the “I’ll buy something next time” refrain, let us know we were on to something.

We started analyzing and fine- tuning what we were doing, in terms of merchandise, lists, paper, printing, production, and mailing. It was very important to be able to afford to stick with it to buy the time to figure out what was working and what was not, and to know what to change and what to retain.

Paula Quenemoen is the executive vice president/co-owner of the Telluride, CO-based Jagged Edge, a cataloger/retailer of outerwear and mountain gear. Annual catalog sales, $225,000; annual circulation, 250,000.

The idea for the Jagged Edge catalog stemmed from our local success in Colorado with our retail locations. I began to envision a catalog as a way to not only drive business and attract customers outside of the Colorado area but also market our philosophy of “the journey is the destination.” Our philosophy stems from an ancient Chinese sage whose name in English was Cold Mountain. His poems from 600 A.D. resonated with me by expressing how to interpret and experience the natural world. I felt that this was an expression of the sentiment we would like our buyers to experience, since we sell the gear for these kinds of physical and spiritual expeditions.

From the beginning we tried to focus the catalog around our philosophy with our photography and copy. But our first catalog was homemade – and hideous – because we had no funds. We learned along the way by doing. I did almost everything myself with a little bit of help from a printer, who I think felt sorry for me. My sister and I compiled a list for the first mailing from our pool of retail customers, and names from the American Alpine Club, and by begging and borrowing for names of prospective buyers!

We use photographs of our staff in our catalog, not high-priced models, which helps cut down on production costs – a useful tip for beginning catalogers. Now we are more sophisticated and competing with top brands, yet we still photograph everything ourselves and use staff members to convey authenticity. I feel that the catalog is an extension of my personality and my passion for the “journey.”

Ken Karlan is the owner of Bethel, CT-based Star Struck, a catalog of Major and Minor League Baseball caps and apparel. Annual sales, $2.5 million; annual circulation, 1.2 million.

I can’t take credit for the idea for the Star Struck catalog because it was actually my son – who was eight years old at the time – who came up with everything, from the concept to the marketing ideas. I knew the idea would work because there was a niche for Minor League enthusiasts who had limited resources for finding Minor League merchandise.

My son also envisioned the format for the catalog, which other catalogers have since replicated. He suggested that we organize the catalog by each major league team and all of its double-A and triple-A affiliates, including information about the home ballpark and pictures of both home and away game caps, as well as batting practice caps.

I had an existing business-to-business operation at the time, so I used capital from that to invest in this new venture. We built an office to accommodate everything from photography and creative to operations, fulfillment, and distribution. We have always done everything inhouse with the exception of printing. We distributed more than 500,000 catalogs in our first year, 1997, and we hope to mail as many as 2.5 million by the end of this year.

The key to growing a catalog in the beginning is to always increase circulation and create an online ordering vehicle to reach an even larger audience. At first, we started with a few products – some of the Minor League and college caps. We kept adding to our assortment and increasing mailings. Now that Star Struck has been named the official catalog of Major League Soccer, we can relive the start-up process all over again.

Stacey Small is the owner of Botanical Animal, an Ardsley, NY-based cataloger of natural and herbal homeopathic products for horses, cats, and dogs. Annual sales, less than $500,000; annual circulation, 100,000.

I owned a newsletter called “The Holistic Horse,” which generated many reader questions about where to find natural products for horses. I then decided to create a catalog that would serve as a marketplace for small vendors that sold these products.

As for financing, I originally used money from an existing business to fund the catalog. Eventually, though, I saw a great future for the catalog and a need for expansion, so I took out a loan. At first, the catalog was primarily a sales device for my own merchandise, but I eventually added other products. Also, I began to realize that most horse owners also had cats and dogs, so I expanded the assortment to include products designed for those animals.

It took about four months to get the first catalog produced. I have a designer who helps me, but I oversee all the creative. I contract out for mailing and printing because these processes require specialized systems. I have used rented lists with some success, but I have come to rely more on our house file buyers.

Eric Steen is the chief financial officer of Norwalk, CT-based Big Enough, a marketer of upscale sportswear for babies, kids, and women. Annual catalog sales, $300,000; annual circulation, 60,000.

Our catalog was inspired by the notion that a true merchant uses all of the various sales devices to reach an audience. Our primary sales vehicle is home shows. We have representatives who go into hosts’ homes and give demonstrations to invited guests. Over the years we have gathered a list of buyers, which enabled us to make the transition to a catalog.

But while it may seem easy to whip together a catalog, our team discovered the various direct marketing pitfalls. For instance, we were eager to circulate the catalog to a large audience, so we rented a list – and it turned out to be a huge disaster. We learned from that failure that we have a high-end product line that relies on the customer being familiar with the brand and its quality. That’s why we do so well with our own house file and not rented lists.

Joe Kawaky is the president of Port Ludlow, WA-based Captn. Jack’s, a catalog of nautical software and other related products for mariners. Annual sales, more than $5 million; annual circulation, 500,000.

I was involved in software development for other catalogs when it occurred to me that conventional marine retailers did not have adequate resources or the knowledge to handle complex navigational software products. So I developed a business model based on a Consumer Reports format and began testing, evaluating, and selling the different products.

I jumped into the production of the first catalog of these products and I realize now how naove I was back then. If I had known how much work was involved I may have thought twice about starting this business! I produced the first catalog single-handedly, spending endless hours writing copy because I had selected such an ambitious format. I also hand-selected rental lists. I dropped a modest mailing of 25,000 copies the first time out. From idea inception to the first mailing took about 13 months.

To start a catalog you need to be dedicated. Outsourcing is expensive, so most catalogers employ the do-it-yourself method. You need to be on top of everything. For instance, after the first mailing went out, I needed to process orders while getting started on improving the next catalog.

Eventually, things began to run a bit more smoothly, and we were able to add a call center, central offices, and a mailing service. But the main thing that helped me get through the tough work in the beginning was my faith in the idea and the knowledge that I was reaching a niche audience that was not being served.

Mary Going is president of Freeport, ME-based Firegirl, a catalog of hot sauces. Annual sales, less than $100,000; annual circulation, less than 10,000.

Until last year I had a Web design company, but once I sold it, I decided to open an e-commerce site of hot sauces. I already had a informational site about chili peppers and hot sauce that I had started in 1995.

We saw a lot of potential on the Web because we would have unlimited space to present product information, and the ability to update our assortment regularly. Still, I recognized the value of a direct mail vehicle, and I had planned to launch one in conjunction with starting the site. I had to delay the catalog for six months, however, as I adopted a child in the midst of starting the business.

When I decided to tackle the production of the first Firegirl catalog, I made it simple. I had a printer that I had worked with on other projects, so I spent a little more money because I trusted him. I did the catalog with Pagemaker software, which I learned by reading a book. I found that I will never be able to put copy for each product in the print catalog, because that would create too many pages and would be very costly. But I do plan to put them all on the Web and highlight certain products with full copy.

My first mailing went to just over 2,000 people who had signed onto the mailing list from the Website. Now I have to batch catalogs for mailings every other week to accommodate all the requests. I’m lucky that I don’t need to rent lists of people who might not be interested in ordering.

We just started working with an advertising agency, and we hope to create a campaign to drive buyers to the Firegirl catalog and Website.

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