DECATUR, GA., 1973 - My Story, Part IX
Now that I am quickly resettled back in Atlanta in a 3800 sq. foot condominium with my office built in one of the four garages below the condominium floor, I began telephone soliciting to get new lines. The optimum is to find lines with existing volume already established without having to pioneer every single piece of business; but, they, were few and far between. There were two of us, and my new partner was less skilled at cold calling CEO's and presidents, than I was. But, call we did. In a months time we found around twenty manufactures that we represented for the southeast, some of which had some existing business. By then I had identified some big lines that I would go to NY and visit the HQ's with a proper sales call. In my first visit I landed a large gilded gold gift line already in all of the major department stores in the southeast that had an existing showroom at the merchandise market in downtown Atlanta. This was a break-through because it meant we didn't have to pay for a lease. All we had to do was keep it open 4 hours a day while we could use some of the space for some of our other lines as well.
In this merchandise mart in Atlanta there were close to 25 trade shows a year, and that brought-in small store traffic from all over the southeast. Within a year we were breaking even on expenses, including travel, sales commission, show fees, and extra sales help. About this time I met up with a fellow low end cosmetic manufacturer, that specialized in Two-For-A- Dollar make-up products who offered us a partnership for the national sales development part of the company. We opened up all 3,000 W.T Grant stores with a rack-jobbers servicing the merchandise weekly. Sears and Penny's came on stream and we were off and running until we got a giant shock. In fall of the next year WT Grant declared bankruptcy and we were out about $350,000 in cash when they went into receivership. Then the next shoe dropped! Sears and Penny's made a strategic decision to eliminate any SKU's (stock-keeping-units) under $5.00 retail. That took all our merchandise out of 7,000+ plus stores. Since, the company had gone public and the shares were around $12.00, they plummeted to pennies instantly.
The eighteen months or so that followed were pure misery. My partnership became useless because he became addicted to drugs, and became non-productive. This was truly an albatross around my neck, made worse when my step-son picked-up the habit as well and was selling drugs instead of servicing the drug stores he should have been. Anyway, I dissolved the corporation, and tried to figure out how to survive not losing my condominium.
During this 18 month period I tried every scheme imaginable to bring in money. One real promising deal was when a new Florida company announced that they were going to launch a digital contraceptive suppository which was well packaged, and the ad program was substantial enough to make it work. I flew down to Miami, and tied-up a national sales contract all legal and tight. The brochures were mostly printed, and I began visiting all the big grocery and drug retailers, something I was very adept at. I wrote orders for Walgreen's, Kroger, Osco, Eckerd's, Publics, and many others for hundreds of thousands of dozens with signed purchase orders, and top selling shelf space to boot. I covered the nation singing on new reps and it looked like I was going to be set for the launch.
I was nervous about things so I kept in contact with an ad agency in NYC that I knew to keep tabs on the ad space and what they knew about the launch. All seemed on go. I knew how they were going to manufacture the suppositories cost effectively, because the owner told me the process, and it was identical to how we made lipsticks by the thousands in California. It was labor intensive, but labor was no problem in Miami in those days.
It was a couple of months or more to launch, and I decided to take advantage of my credit before I became a pariah. The big demand item that I discovered I could get manufactured in Italy at about $2.40 a dozen was quality fashion sunglasses.
So, I bought around 300 nice Lucite lighted counter displays which held 48 pairs in a 12 inch square. My plan was to wholesale to the southeastern distributors, and to put the Lucite displays into the better drug stores in Georgia and Alabama on consignment. The displays were selling about 3-4 pair of glasses at $10.00 retail in a week. The retailer earned $4.00 for each pair sold, 40%, without laying out any of his own cash. I made $6.00 gross, less freight and net about $5.70 each. This turned out to be a solid cash flow, but time consuming. I needed to have time to sell to the wholesalers, and throw in some fancy private label stuff. I quickly got a few large wholesalers interested in stocking my Italian private label line of sun glasses. There was tremendous competition but I made it work.
In my travels I met a drapery rep. from Florida who lived in Atlanta close by and he interested me in a wholesale drapery business that I could take on the road with me and earn extra commission. He happened to have a small travel trailer and we teamed up to see if we could get along on a trip or two. The first few weeks went along fine and we began making more plans. He had had a successful drapery business in and around the Kennedy Space Center, and after a divorce and remarriage he had settled in Atlanta. I learned the drapery business from him, and opened a small retail outlet that he manned, and I used to keep jewelry, and sun glass inventory which I needed close to home. It was a 50/50 deal.
Next week, the saga gets deeper and deeper!