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Inventor of Sidewalk Chalk moves into eCommerce - An inspirational story like no other - Amazon Seller Tips with Marcia Reece - Part 1
January 17, 2022
Marcia Reece Inventor of Sidewalk Chalk moves into eCommerce - An inspirational story like no other - Amazon Seller Tips with Marcia Reece - Part 1
Things we discussed in this session:

A. Part 1

B. Part 2

Things we mention in this session of Seller Round Table:

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Transcription in this episode:
[00:00:01] spk_0: Welcome [00:00:02] spk_2: to the seller roundtable, E commerce coaching and business strategies with and er not and [00:00:07] spk_1: amy Wiis. Hey everyone what's up. This is Amy, we's Andy is out today but we're still going to have an amazing episode and let's see what's the episode number, episode number 126 of the amazon FB a seller roundtable And today I have the amazing, just this woman is amazing, She's amazing. She's a legend. When I first met her, me and my assistant ended up sitting on our chairs and it was like fireside chats with Marcia and we were just listening to everything that she had to say because she was such an amazing story. So I'm so excited for Marcia to share her story with you today. Let it inspire you. Let it overcome your help you overcome your barriers because if one thing that Marcia does not do, she doesn't quit so far. No, no, it's not time yet, Marcia, welcome to the selling roundtable. It's so [00:01:11] spk_0: great to have you. Thank you so much Amy, it's so good to be here with you and your audience and and like you said, it's been quite right and I guess I'm old enough to have experienced the highs and the lows and survived in both. [00:01:26] spk_1: Yes, definitely. So speaking of being old enough to survive the highs and the lows on this show, we always ask you to tell us a little bit about your background and I know with you it's could be the entire show because you have such an amazing story, but tell us a little bit about your journey to e commerce and your background as much or as little as you want to tell us. And while you're doing that, I'm gonna mute and share it around to the live channels [00:01:58] spk_0: already. Well my journey started about 40 years ago. I had two Children and my daughter liked to play with creative art activities. And so one of the things that she liked to play with was chuck, but the chuck at the time was that skinny blackboard stuff like the size of your little finger that came from china. It was dusty, dirty broke, full of lead, it stained, it was a rotten mess. So in 1978 I decided there ought to be a better way to make chalk. And this was before computer. So I went to this place called the library and started researching how to make chalk. I spent the summer experimenting and I came up with this never has yet been duplicated, fabulous formula. It is hard dust lys clean chalk, you can wipe it up and down your clothes and it doesn't come off and yet it washes off with rain or water. So without knowing anything about retail wholesale. I decided I was going to start selling sidewalk chalk. Well, it actually happened in kind of a bizarre way and I won't take all of our time today, but we did end up selling chalk to craft fairs around colorado. And it wasn't long before stores started calling me wanting to know how to buy our product. That led me to a trip to the Denver merchandise mart where I found a wonderful lady who's now passed away and she taught me all about wholesale and case packs and you and all of it. So we started selling to a lot of gifts and toy stores in the Rocky Mountains. And then my son who was three, challenged me and said, mom wal mart says they only buy american products, you should sell them our chuck. Now at that time, Wal Mart had 66 doors, that's how long ago this was and I brought these props to show your audience because I want people to understand. I was just a mom in Niwa Colorado with two kids. I didn't have any sophisticated product background, which you're about to see, but I had a fabulous product, This is the product that walmart bought When Leslie 40 years ago and it was as primitive as can be. These chalks were squirted out of pastry tubes, they looked like coloured dog turds, but we got our shot to put this and another school, we had a box that held six sticks into nine of their stores for a test market with a guaranteed buy back that whatever didn't sell in 30 days, we had to buy back. So it was a gross of each product into nine stores. Well I'd never sold that much product to one store and I was afraid of the buyback. So I hatched this idea that I would call each of those nine store managers, I would ask them if they would host a sidewalk chalk contest in their parking lot. Now back then there weren't very many Walmarts, only 66 stores in the whole chain, their stores weren't big and busy. So they were thrilled to have something happening in their parking lot. I then went to these little towns in Colorado. I talked to the newspaper. They all agreed to come cover this story, walmart agreed to give a 1st, 2nd and 3rd prize to every kid that entered. And then I found some famous person like the school superintendent of the librarian or somebody to come judge the contest. Well, these contests became crazy fun. And back then the newspapers really only round ran color on the front and back of their newspaper. The inside was all black and white. So our story with the pictures of these kids on their, their art made the front cover of every one of these newspapers because it was in full color. So that was very successful. When those 30 days were the fourth day after the fourth contest, I got a call from my walmart buyer and he said, we have a problem. And I said, what's sad? And he said we are out of inventory in these stores. And I said, where do we need product and win During that 30 days we restock those nine stores nine times which was amazing for us. So after the 30 days were up, I called my buyer Steve and I said this was fabulous, can we get a few more stores? And he said Marcia, I think you better come down to Bentonville and see me. So I made my first trip to Bentonville Arkansas and it was nothing fancy, let me tell you. And he met with me and he had a sprocket the whole sprockets agreement white spreadsheet on his desk and he was looking through it and he said, I don't understand this, you are the top selling item in the toy department and your packaging and presentation suck. And I said well what do you think we should do? So we went out to their plan a grand room and he showed me blister card packaging and so I said great, we will convert to blister packaging. So based on that I invested in a six station automatic blister machine and then we ship this product into 14 of these stores. We did 14 chuck contest 14 rinse and repeat again massively successful. But this is a flag [00:07:23] spk_1: you created at this time. So what what about what year was this? [00:07:27] spk_0: This was 1979 or 1980, [00:07:30] spk_1: 1979 or 1980 and you actually did you do this packaging yourself, you said you invested in a blister packaging machine, sheen [00:07:39] spk_0: To put the blister on the card. I had an artist in boulder colorado and this was my daughter over here is my daughter Suzanne, my son Ross. They were on our packaging and it was just, it was still, it was pretty primitive, but it was way better than this. So we did the 14 stores with this and I did a flat blister because right at this time we were the first company to invent molded shape chalk. No one had ever made that before and I had come out with circus and dinosaur and some zoo characters and I didn't know what would sell best. So we was just mix them up in here and my buyer was tracking on his end what was selling best. So after the 14th store test that month, he said, okay, come back down, we need to talk again. So we went from, this is so fun. We went from this To this to this molded sticks with our name on it. It says our kids sidewalk chalk on each piece. They were in their own blisters so they didn't slide around and then they gave us chain wide, they gave us all 66 stores that led, to uh, and each time we would get this media coverage on these news [00:08:58] spk_1: Marsha, can I ask you just because I'm fascinated with the product development packaging as you know, like I teach every step in the process and I just think it's so fascinating because nowadays we can easily get someone else to make that packaging and it's so easy nowadays that we don't necessarily know what goes into it, right? Like what, how a package is made. So you went from kind of like in the beginning when you had what you call the color dog turds, right? Um were you just like using the material and laying it out on a paper, something like what was production like for that? And then when you molded it, did you guys create the molds yourself and pour that material into the molds? [00:09:44] spk_0: We did. I actually found a candy company in Oklahoma that I don't know if they're still in business that made chocolate candy molds. Like if you wanted to make chocolates for a wedding party or and so I called that company and asked them if they would make molds for me and their molds. As I remember our first molds held like 20 pieces of chalk and you would pour the slurry in and then you would scrape them off and let them dry. Oh this was so primitive amy but we were making a lot of chalk by then. So then those molds were not strong enough or big enough and the big turning event happened. I would send all of this media, my newspaper articles and magazines, we were in Fortune magazine and entrepreneur and Abc NBC and Cbs. Denver, our local stations covered our little story. Then I got a call from the executive producer of Abc World News tonight with Peter Jennings and he wanted to come cover our story that's when everything blew up. And um they did come, we made the hold and I asked her, I said nobody like Peter Jennings has ever come to in Iowa colorado, would he come to my Children's elementary school and give a little talk about his work at Abc news and she said he would. So I hired the argument. I asked the art department to come to a whole mural about abc news and Peter Jennings where they parked the school buses so they moved all the school buses. All these high school art students came and did this beautiful mural and I made A. B. C. Logo cookie cutter out of copper because it was soft and malleable and I could make a cookie cutter and I made 700 cookies to give away to everybody at the high school and elementary school. So we killed myself to make this day about Peter Jennings. Then when they did our story, he was already in love with our little kids and the fun. So we had, when this story actually aired, we had two minutes and 20 seconds on World News tonight which used to be a 30 minute show with commercials out, 20 minutes of news time. So we were 1/10 of their show and no one you know this back so long ago I didn't know one once it aired. If you didn't see it, you missed it. But I happened to hear barry Serafin saying coming up next, a couple of kids chalking up their future in colorado. So I ran into the house and put a VHS tape in my so I do have a copy of this segment and then the next morning I went into my office and I was so depressed because my parents didn't see it. My sister didn't see people, I wanted to know that we were doing something. All missed it. But I got a call from a man and I recognized his name and when I picked up the phone and said good morning, how can I help you? Can I say a bad word on your show. [00:12:49] spk_1: Absolutely his work [00:12:52] spk_0: to me exactly were why the fuck is walmart getting all this publicity. And I said sir, they're buying our product in all their stores and I can't get your buyers to return my call. He was the head of Kmart who had 4200 stores. So he then asked us over the phone to drop ship two cases 48 pieces each to each of his 4200 stores. We were not a vendor of record. We had to hand type 4200 invoices. There were no computers yet. It was total brain damage. And he said, can you do it in five weeks missy. And I said yes sir, we can. I had no clue when I hung up the phone how we were going to but we did. I'm sure we lost money on the order because we hired every temp we could get to help us make all this. [00:13:43] spk_1: I'm sure as well that You that was the importance so that was an investment because at that time you know and I've heard you tell this story before which you know that was that was for me. So now everybody else gets to hear it. But you know you the way you said it was at that time Walmart was tiny. You had just like 40 some stores or 60 stores, 66 stores and you said Wal Mart was a pimple on Kmarts but which is not the situation anymore because you know now Kmart is so much is gone right. But yeah so you know and I think the other interesting thing so you show the importance of believing you can even when you don't know how like boldly walking through any door that is open for you that was [00:14:38] spk_0: scary. Amy we could have totally imploded but I was young and I was I would work around, I would work 70 80 hours sleep for two and go again. I was not going to fail because I had my own money invested in this, I had my own my pride, this was like my third child, this little company. Well then after wal mart happened and we shipped it successfully. Then we got uh target nationwide and we got twice arrested nationwide. And then this is the last show and tell [00:15:08] spk_1: you said you went after Kmart after Kmart and then you got in Target two is rushed nationwide. So by that time you went from doing a few like you went from doing these major invoices for all these stores everything and overnight you scaled so that one decision, like I just wanted to spend a moment on this because this one decision where you took a chance and made it happen, like you said you lost money on that deal, you could have said no, but that one decision catapulted you through major retail and turned you into a just an incredible company and brand and you know, and that's what led to what you're holding up now which is this incredible three [00:15:56] spk_0: million Mcdonald's three packs. Now, this one did just about kill us because that's a lot of chalk, if anybody can imagine one million or something, this was overwhelming. And then this led to we did six other national food kids meals. So one thing led to another at this point we had to production facilities in the U. S. Going around the clock. And and this all happened over about a 12-month period. It didn't happen completely overnight, but we didn't have to test with Target and toys r. Us. They already had seen our product at Kmart. Um, then we ended up ended up opening three factories in Asia, which I was one of the first Western women to go open a plant in china. And that was quite an experience back then. Um, and now that I have stay well copper, I'm absolutely honored and thrilled to say we are completely made in the USa and that was what got us into walmart 40 years ago, was made in the USa product and here we are now, back made in the USa. So in many ways a me it's gone full circle, but as naive as I was back then, that's how naive I have been on learning e commerce. It's been a very hard journey for this old dinosaur to learn e commerce. [00:17:24] spk_1: Yeah, I mean it's not a quitter. Well, and I wouldn't say that it's any less difficult for anyone getting into e commerce because the competition is fierce. People don't play by any rules. Right? And so I would love to ask you a question. You said, we didn't have to test, you know, I know so many of our e commerce folks can learn from your experience in retail and we all want to know, you know, and you have years of experience in retail. So you said I didn't have to test in Target or toys r us because they had already seen our products, they had seen that, What does that mean to test? So you said at first you shit like a case of each one to kmart um what does it mean when you have to test in retail and can we still expect that? [00:18:15] spk_0: Probably and what that means is they're going to put you in a smaller number of select stores, they're going to monitor the velocity of your sales and if you sell to their standards and to the buyers standards, then they will give you chain like distribution. They don't still give that out without knowing that your product is going to sell. And it is, I still call it a test and and it's usually 30-45 days. It may be 60 days and then they'll check your sales and see how you've done. Um, to move forward. We are just now finishing retail packaging to go into brick and mortar retail here in the States. And again, I want to do testing because I want to make sure that our product will sell before we ship chain wide because most of these big accounts now will make you guarantee a buyback if your product doesn't sell and I do not want to get involved in buybacks. So hopefully they will give, hopefully now I want to test, I want to know that it will sell before we ship chain wide. [00:19:22] spk_1: Yes, that makes sense. So you're making sure that you're testing before. And I think that's what most people can expect to get overwhelmed thinking about retail because on amazon you do get to test, you do get to launch your product and kind of test and see how things go right. But in retail you also test, you test in smaller amounts of stores before you're going nationwide. But the other thing is when you finally do go nationwide, amazon is one store, you know, and walmart as you mentioned, you know, how many stores they have now, I forgot how many, 8100 stores or something. CBS has 9400 stores I think. Um, so, and now even the top 50 retailers also have e commerce platforms and the two are not the same. The brick and mortar is not connected to the e commerce side. So you know, we all have so much to learn whether we're in e commerce and figuring it out or we are trying to expand into brick and mortar channels. Um, there's so much to learn and, and we can learn from each other. So so I know you're, let's go take you from, you sold your company, right? You soldier your chalk company. And what year was that that you sold it [00:20:44] spk_0: In? That was February 9, 1990s. You know, the days your Children were born, I'll never forget that day either February 9, 1990 my life changed forever. I had first been made an offer to by my company from the extra sketch company Ohio art and I had gone through nine months of due diligence with them and we did not come to a deal, but I'm very, very proud to say we ended up best friends and usually when you've invested that much time and money putting a deal together and they fall apart. Usually people don't like each other, but the chairman and I have become best friends. His sister is my best friend. We talk every day on the phone. She's a dear dear lady, I love all of his family. They become like my, they are my family. I go is [00:21:34] spk_1: the company still in business today? Are you still still getting? [00:21:39] spk_0: But they sold about four years ago to a Canadian company. So the original people I dealt with are no longer there, but at your sketches, it's a classic toy brand as well. But I, so I was pretty depressed when that sale fell apart because I was in over my head with Cash flow. We were shipping so much product and all these national retailers, one, I always used to call it 2% net never, they would pay like in 90 days or 120 days, but they were ordering product every 30 days because our product was consumable. So it was a cash flow nightmare. So I needed to sell the company. We were growing so fast. I knew I was going to bankrupt it if I didn't sell it and we were in every, we were in mass specialty education, gift toy fast food. We really had a complete grid of us retail. And so when that deal fell apart coincidentally I got a call about three weeks later from my Dallas rep Gary McCoy and Gary used to always call and say hey sunshine how you doing today? And I said I'm great Gary, what's up? And he goes have you ever thought about selling your company? And I said well why would you ask? He didn't know I had been through nine months of this because you never let your sales people know when you're really up against the wall. And he said there's a company that's very interested in your distribution. They didn't care at all about my product but they wanted my distribution because we were vendors of record at all these [00:23:13] spk_1: major then they have to start on the shelf valuable. [00:23:18] spk_0: Very valuable and it still is today. And so he said I want you to call I said Gary stop if they're interested you have them call me I don't have time to Chase a rainbow. And so 45 minutes later Amy I got a phone call from the chairman of the world's largest toy company. Now I'm just a little farm kid from southeast Iowa this is big stuff to me. So he started telling me about their company. They had a product that had done really well in Japan. They didn't have any U. S. Distribution and they wanted to buy my company and put this product into my distribution. That product was a little product called power rangers. [00:24:05] spk_1: Mm [00:24:06] spk_0: And that's what happened. I had the company sold within 33 or four weeks. I got everything I wanted because he wanted that distribution and we put a six person launch team together and took that to a billion dollars in 14 months. In 1990. A billion dollars was a lot of power rangers. It had never been done in the toy industry before. It took barbie 30 years to hit a billion dollars for one year. So it was a big big deal [00:24:35] spk_1: your company and your distribution and what you built out of nothing out of your kitchen basically our [00:24:43] spk_0: dog turds [00:24:44] spk_1: catapulted another company. I mean we think about even with the power rangers brand is today you were a part, you were a pioneer to [00:24:57] spk_0: not [00:24:58] spk_1: to mention you know back when you started when you move your factories to china back then there was nothing in china. It took companies like yours to go to china and build them out. It's like what Mexico and some of the other countries that were trying to source from now it's what they need. They need companies to come in and grow with these manufacturers and you did that as a woman in a country where at that time china has gotten a little bit better but I have a china trip. I go to china often and I see the still to this day it [00:25:36] spk_0: was so primitive back then it was truly one of my factories was in Guangzhou. My first was in Shenzen, then Guangzhou and my last was in chaman. And when I stayed in my Guangzhou hotel, I never let my bare feet touch the floor. I always had slippers on. It was the showers had they weren't even what we would call a shower. It was horribly pitiful, but it got what I needed done. And uh, we have come a long way and as I say, I am very, very honored and thrilled to be part of the USa manufacturing. Uh, [00:26:15] spk_1: I agree. I I feel to say I have one product made in the U. S. And I'm very proud of that and I'm happy to have conquered that because it's not easy. It really isn't easy to get a product made in the USa. So all right, So we went from, you started this company out of nothing with your kids. Getting people involved saying yes to open doors. Even when you didn't know how you were going to do things and you ran into a cash flow problem, which is so many people in e commerce, we have the same problem. Everybody who has inventory has this problem right? And you get to the point where you're too big or you're too small to grow as big as you need to grow. And so you got in a position where you needed to sell and back then selling a business was not the same as selling a business today. So you went through that whole thing and you know, it's a whole different ballgame. So I have to tell you [00:27:14] spk_0: my wonderful sales story at Ohio work. Thanks for tuning in to part One of this episode, [00:27:20] spk_2: join us every Tuesday at one PM pacific standard time for live Q and A. And bonus content after the recording at [00:27:26] spk_0: cellar round table dot com, [00:27:28] spk_2: sponsored by the ultimate software tool for amazon sales and growth seller S C o dot com and [00:27:34] spk_1: amazing at home dot com.