Last winter, Rick and Roxanne Henningsen were all ready to launch their Blizzerator three-in-one ice scraper, snow brush and squeegee. They had stores ready to receive $50,000 worth of product, thousands of preorders and customers on a waiting list.
But to their dismay, when they received the initial 6,600 units from their manufacturer, they were shocked at the product's subpar quality.
"It was so far below our standard of excellence that we had to cancel all orders and sent the 6,600 back," says Rick, 53, of Glen Head. "We couldn't compromise."
Unfortunately this type of hurdle isn't uncommon.
Outsourcing on trust
"When outsourcing a product, quality control can be problematic," says Walter Reid, a business adviser with the Small Business Development Center at Farmingdale State College. "The manufacturer might not comply with all quality control agreements in the contract and may make changes to make the manufacturing easier."
The Henningsens had agreed to certain specifications with their Canadian-based manufacturer, but upon receipt of the product, saw the manufacturer cut corners. Plastic buttons had been used where stainless steel had been specified, the paint job was shoddy and one component wasn't attached properly, Rick says. "We couldn't trust them to remanufacture," he says. So the Henningsens were forced to delay their launch.
"It put us in a tremendous amount of financial jeopardy," says Rick, who estimates the ordeal probably cost them more than $150,000, on top of the roughly $500,000 they had invested in the project, forcing them to sell several personal belongings including Rick's custom 100th-anniversary Harley.
Know thy manufacturer
To try to avoid such a situation, it's important to know the manufacturer you're dealing with and ask for references, advises Reid. If you're selecting a manufacturer outside the United States, consider finding a trade outsourcing agent who can recommend reputable companies and ensure quality control during the manufacturing process, he says.
The Henningsens secured another manufacturer within three months, using contacts through their marketing firm. They ultimately aligned with Indianapolis-based Draco LLC, a warehousing, fulfillment and distribution provider that got high recommendations from customers and works with a manufacturer in China. This time they have a U.S. representative from Draco overseeing quality control there.
They were able to keep the good faith of many of the stores that had wanted to carry their product last season by immediately mailing an apology letter explaining what occurred, along with a $25 gift card. Reid says this was a smart move.
"I think they understood we weren't going to settle for just anything," says Roxanne, who prompted her husband to design the Blizzerator in 2010 after being frustrated by the snow-removal products on the market. At 5-foot-2, cleaning the roof of their cars has always been a challenge for her, she says, noting the Blizzerator, with a handle that extends to 55 inches, makes the job much easier.
Now that the Henningsens are once again ready to launch their product in brick and mortar stores nationwide, they're in talks with distributor Plews & Edelmann in Dixon, Ill., which has relationships with about 50,000 retail stores and is considering adding the Blizzerator to its product line.
"It's kind of an all-in-one tool," says Jim Zalzalah, Plews & Edelmann's new-product development manager -- one he said helps overcome some of the shortcomings of other snow-removal tools.
The Blizzerator will get a test launch in 15 select Sam's Club stores nationwide, says Rick. Several other retailers are interested, and the Henningsens expect to be in 500 stores nationwide by next year. The tool is already being sold on Sears.com, Kmart.com and Blizzerator.com. It retails for $24.99.
With the positive feedback, they've quadrupled production to 30,000 units.
John Murphy of New City, N.Y., who ordered his through Sears.com, says "it looks and feels very sturdy," and he'll "put it to the test the first snow we have."
AT A GLANCE
Name: Blizzerator in Glen Head
Co-founders: Rick and Roxanne Henningsen
Product: Three-in-one ice scraper, snow brush and squeegee
Revenues estimated for 2013: $200,000-plus