She longed for the embrace of a major retailer, but at what price?
By B. Collins
Sometimes, life doesn’t go according to script.
In the case of inventor-entrepreneur Madeline Canfield, the original screenplay read:
- Invent and commercialize the NanoLite, the world’s smallest light for keys.
- Entice major retailers to sell NanoLites.
- Get rich.
Canfield has been forced to realign her goals and expectations. Reality has a way of doing that.
Since launching her business in 2005, Canfield sought to land the NanoLite in the Walmarts of the world. Occupying space in such retail nirvana meant commercial success, a sure sign that she’s “made it.”
Yet the closer she read contracts with major retailers, the less she wanted to deal with them – at least for the near term. Canfield, a former special education teacher, was particularly alarmed with “guaranteed sales” clauses.
“I thought that was great, there’s a ‘guarantee’ they would sell it,” she says. “But it means just the opposite. A certain amount has to be sold, or they have a right to send my product back and charge me shipping and handling.”
Alternatively, the agreements permitted retailers to dump unsold product to other outlets, including Goodwill stores. When it comes to brand purity, that’s not where you want your new product to appear.
“If the first time you see my product is in a Goodwill,” Canfield posits, “are you really going to buy it at another store?”
Canfield, with the help of friends and family, has invested $100,000 into her venture. She’s come a long way since hand-making NanoLites in her home. She has units made overseas. Yet cash flow is a top concern for her.
When it came to contracts with major retailers, “there were clauses in there that could bankrupt me,” she says.
Instead, she’s concentrating on Internet sales and developing a network of independent sales reps to sell NanoLites to smaller hardware chains and mom-and-pop stores.
She says she’s been “totally impressed” with her Internet sales, which go beyond her Amazon.com virtual storefront. Sales of NanoLites got a boost when someone from online retailer x-tremegeek.com saw NanoLites for sale at a TravelCenters of America and began carrying the product.
“They pay me right on time,” she says. “I get nothing sent back. I just get reorders.”
Ramping up that army of independent salespeople, however, requires more thought. Canfield initially believed arming sales reps with business cards and a few sample cold-call lines would suffice.
“Then I thought, ‘I’m sending all these folks to stores representing me,’” she says. “I realized I could face some legal issues.” What happens if one of the sales agents gets injured while making sales calls? What if one of them goes rogue and says or does something whacked?
She still intends to use commissioned salespeople, “but I’m re-planning before I put them out there,” she says. “I’m using the carpenter’s theory of measure twice, cut once.
“I knew this would be complicated, but I thought the process would be much more linear,” she adds. “You’re constantly revisiting every aspect of the business. I thought as soon as I planned something, I’d move on to the next step. I’ve had to jump back and forth to all these categories. I’m jumping all the way back to the planning stage again.”
Canfield isn’t abandoning her goal of landing NanoLites in major retail stores. She’s “de-emphasizing” that goal until she can find, in her words, a “compatible investor.”
What’s that look like?
Someone who doesn’t want to own “more of the company than I have” and someone who wants a “good return and will pull out in two years.”
While that might be a tall order, Canfield remains confident in her current product – and is eager to roll out others.
“This,” she states, “is not a single-product company. We have new ones planned for next year.” NanoLites, she adds, “is literally just one of a book-full of inventions.”
