Made in the US?

Wow, the campaigning is just about over. Hopefully everyone voted.

The big topic this year has been the economy and how slow the recovery has been. Unemployment numbers have remained relatively high throughout the summer and hopefully, whoever wins, there are plans to get people back to work.

No big news that jobs being sent overseas has hurt our workers, the GDP, tax collections, etc. Tax breaks for sending jobs abroad has made it attractive to American companies. And it’s somewhat understandable.

Lowering the cost of labor increases profits which increases stock prices which increases individual IRAs and 401Ks. It’s a vicious circle. No one wants their savings plans to lose money but they also want to be able to work so that they can contribute to their plans.

We recently ran a survey with our customers asking if they would be willing to accept a price that reflects the use of products made in the USA.

The results were surprising. A large percentage (67%) responded that they could accept a higher price. That was the good news.

We then wanted to find out if some product names could be substituted with a generic. For example, Kleenex shows up on a number of lists but the schools and teachers use “Kleenex” as a generic term for tissues.

We found that most parents felt that Kleenex, Post-its and Ziploc were brands that could be replaced with a generic product.

But don’t touch my Fiskars, Elmers or Crayola.

Here’s the rub. While Crayola manufactures some items in their Easton, PA plant, most of their products are produced in foreign countries. The same goes with Elmers and Crayola.

So while people want to support American jobs the most popular brands aren’t being made here.

We’re happy to say that, except for these requested brands, most of the items we offer are made in the USA. Maybe it will change someday. One can only hope that companies based here start looking at ways to bring those jobs back to help our economy.

President Obama/Romney, look at the incentives to send jobs overseas and give our unemployed a level playing field.

Binder Problems

Mitt Romney isn’t the only person having to deal with binder issues.

When we first started School-Pak, we made every effort to provide high quality, durable binders. Then came the competition, offering packs with economy binders, much lower in cost.

Naturally, we wanted to keep our customers and attract new ones so we began substituting the durable binders with economy ones. They didn’t hold up very well. They actually fell apart relatively quick, within a few weeks of school.

So off we were to find “the” binder. Our first attempt was with Samsill. Not only did they make a durable binder but they could do different colors for us. As a matter fact, one of our schools sent us their binder and we sent it on to Samsill. They began making binders for us based on the specs from the binder we sent them. Unfortunately they didn’t make the grade either, even though it was their highest quality.

Next up was Cardinal brand. They weren’t able to send us binders by color so we had to buy the assortment and have them de-assorted into colors. Once again there was failure.

Our next stop was Avery. They were able to do a lot for us and also included Boxtops for Education stickers on each binder. We thought things went well until we began getting phone calls from a few schools saying that they were having a problem with them.

We knew that it was the same Avery Binder and our price ($6.82) was lower than what Office Max was charging ($7.29), Target (their site says that the price varies by store. ??? What’s with this? Shouldn’t it be the same regardless of where you shop?), or Walmart ($8.88).

So here we are, ready to go into another school year but unsure of what to do. Why isn’t there a durable binder that holds up?

We finally figured out the problem.

All the binders we used were high quality and durable binders…if they were used in an office setting. None of them can hold up to being carried, dropped, opened, closed, etc., 5 to 10 times a day. They aren’t made for STUDENTS! THEY’RE MADE FOR PEOPLE WHO GO TO THEM ONLY A FEW TIMES A WEEK.

We’ve tried to explain to the manufacturers that “durable” isn’t “durable” in the hands of a student who uses it multiple times a day. They don’t seem to get it.  I’m not sure what they need to make it out of…concrete? I just know that 13 year olds are going to have a different way of using a binder than businesses.

It would be wonderful if teachers were aware of this. Maybe they wouldn’t be asking for something doomed to failure.

As for Mitt, he never said if it was a 1”, 2”, 3”, 4” or 5” binder.  :)

Competition: Fair or Unfair?

Running a business is difficult.

First come up with an idea. Then see if it’s accepted.

Next find suppliers for your product. Realize you’ll be doing almost everything out of your home for awhile but know that, at some time, you’ll need an office and warehouse space.

Secure both and find out you now need to pay utilities, phone service, security service. That’s not too bad except you can’t grow much because the work is too much for two people.

So you start looking for help, paying social security taxes, medicare taxes, unemployment taxes, workman’s compensation insurance plus insurance for all the stock you now have.

Finally you’re ready to go. Except you have to raise your prices to cover the cost of rent and employees. OK, that works and you’re still in the ballpark. Except you need to hire more help and you need to get more sales. So you work out an advertising budget and realize that you won’t be making much of a living on what’s left. But you make it work and find yourself growing.

After 5 years you can finally start taking a salary.

Then: BAM!

You find that the 25¢ ruler you’ve been putting in the kits are on sale at Office Max for a penny. What’s worse? They’ve copied your order blanks (so did Walmart, Target and Office Depot), removed your copyright information, and posted them in their store as a convenience to their customers.

Variations on this theme have happened for the last 15 years. An expensive lawyer could probably help you but you can’t afford it. Not unless you want to go another 5 years without getting paid. So you march into the store, complain to the manager and take all the copies with you. Finally the copying stops. But not the pricing problem.

In Wisconsin, we have an “Unfair Sales Act” or “minimum markup law” that prohibits the retail sale of merchandise at a price that is below the seller’s “cost”. As a rule, everything must be marked up by 6%. It also applies to “loss leader” items, those things that make you come into the store to buy cheap crayons as they know you’ll also buy underwear, socks, etc.

So here’s what I did this year. I contacted the Department of Agriculture, Trade and Consumer Protection to file complaints against Target and Shopko. Crayola Markers were being sold by Shopko for 99 cents. The cost is over $1.75. I waited for a response and was finally sent a letter on Sept 17^th, stating that Target was not guilty of any infractions since “…we have documentation that shows other businesses at or below the alleged retail price. The “meeting competition defense” is an allowable exception.

Sure glad they don’t check drunk driving. I guess if everyone on the road is drunk the “meeting competition defense” would exempt anyone for a fine. Or, how about the prostitutes that work the streets? If there are two of them would they be exempt since they’re the “meeting competition defense”?

Apparently the date of the infraction is the deal breaker. If no one else is advertising a low price, you break the law. That’s what happened to Shopko who was found in violation of 4 product prices.  Of course there wasn’t any penalty. Just a warning not to do it again. I’m sure that it’s as effective with companies as it is with kids.

Just want it to be fair.

Random thoughts as school approaches

Kept thinking about the following last night while trying to sleep:

Random Thought 1 

 Our local Walgreens is promoting a free back-to-school supply event. You go into Walgreens, purchase the items (of course Walgreens isn't discounting the items) and place them into a bin. Makes Walgreens look good (and profitable) helping out kids. Why don't they just donate the items?

The same goes for Wal-Mart, now having a special give-away. C'mon. Why not just donate the items and not sell them? It's no different than the food stores that ask for donations at Thanksgiving and Christmas. It's not really coming out of their pocket. Every year we're asked by non-profits across the country for donations. We do donate to a number of causes but we don't sell them the items.

Random Thought 2

Just had to deal with a school that was asking for a specific sketch book, a Strathmore one. They were for all students in the school from Kindergarten to Grade 8. We were able to supply (our price is just under $9 for the book) to those who bought School-Paks. But what about those parents that didn't order from us. Where do they find it?

We found them at an art store for $19.95 each. Do teachers realize what some of these items cost? Does a Kindergarten child need that quality? Just wondering.

The same goes for specialty compasses, protractors, pens, etc. What happened to common products? Parents are not going to find some of these specialty items without making numerous trips to numerous stores. Of course, that makes us look good. :)

Random Thought 3

Since we're limited by inventory and workers, we close our final ordering date in late July. So how should we answer "Hi, I see that you are out of stock and don't have any more packs. Can we still order?"

Huh? If we're "Out of Stock" it means we're "Out of Stock".

Most schools start taking orders in March giving the parents up to 4½ months to place their order. I'm not sure why they procrastinate for that long.

I wish we could keep enough inventory in stock for the entire year but it's just not possible. 

Random Thought 4

Without a doubt our economy is still struggling. According to the "economic gurus" we need to stimulate the economy again to propel consumer buying. If enough people buy items, we'll need more workers goes the story. So Terri came up with a brilliant idea. We've tried sending it to elected officials but our campaign donations are non-existent so we never get a reply.

Terri is suggesting that the next stimulus be the issuance of debit cards to citizens. The amount doesn't matter (we didn't go that deep into it) but there would be a 180 day expiration date. The cards could only be used for purchases and could not be used to put money in the bank or pay bills.

Just think of a few hundred million citizens with a $300 - $500 debit card purchasing items. The Consumer Spending Index should go through the roof.
Remember, you read it here first!

Summer's half over

Summer keeps speeding by and we're getting a lot of orders. Hard to believe that we're at the half-way point. And we're having a problem with a large supplier, Mead. Apparently the "big" retailers (Wal-Mart, Amazon, etc)have items made specially for them by Mead. So when customers go shopping and find something they like, they ask to put it into a School-Pak. But Mead has restrictions on selling the items to us. They have to get a release from these retailers. That takes us out of the running if a school is asking for the product. We have an agreement with Mead for their products but these don't show up in their catalog as they are specially made. I guess exclusivity is what all of us retailers would like. It's hard enough to stay competitive with multi-million dollar companies. We'd just like a level playing field when it comes to product accessibility. On a side note, teachers are still asking for items that haven't been made for years. We keep getting requests for "Spacemaker" pencil boxes. Sorry. These haven't been around for about 5 years. Teachers may be using "Spacemaker" as a generic term. Unfortunately, parents that go shopping will be looking for it. The same with "Duo-Tang" folders. They're history. The company that bought their manufacturer dropped the name. But back to the good news. The temperature today is a little more comfortable in the warehouse and our workers (college and high school students)are doing an incredible job this summer.

Blown Away

We're starting to price out packs for schools and, once again, it's stunning how the lists have changed.

Back in the day, 1991, when Terri thought of starting School-Pak, the first lists we received from schools had the usual items on it. A box of Crayons, some markers, a couple of folders and notebooks, maybe some colored pencils, a glue stick or two and some looseleaf paper.

We were so apprehensive that the packs cost more than $20.00. Who in their right mind would pay that much just for school supplies? I remember that first year when we went through all the work and sold just 1 pack at one of our 7 schools. We were doomed.

Eventually parents caught onto the idea of convenience and we began to grow. And so did the packs. Soon we were up to 6 glue sticks, 2 packages of paper 6 folders, 6 notebook, compasses, protractors, etc. You get the picture. The price went up yet parents bought because they wanted to be sure to have their kids ready for school.

Our first culture shock came in the late 90's when teachers began asking for tissue! Tissue!!!

What did that have to do with being ready for school?

OK. we added tissue. Of course the next year, teachers wanted 2 boxes of tissue since not everyone brought tissue. Fine, each pack got 2 boxes of tissue.

Oh boy! Sometime in the early 2000's, a new substance was found in schools that changed science and the way we live. They found ... lice!

Now all the headphones had to be wiped down with baby wipes so lice wouldn't spread. Makes sense. But shortly afterward it was noticed that kids had "dirt" on their hands. Here came the hand sanitizers. (Didn't schools have soap and water?)

Oh wait. Next came soft soap for the kids. And it kept growing.

This past year I worked on a quote for a school that was incredible. The teachers were asking for 6 containers (80ct) of baby wipes. A package of paper cups, 24 plastic forks, a roll of paper towels, 24 plastic spoons, 4 (yes 4) boxes of tissue, 3 containers of Clorox wipes and two boxes of ziploc bags (gallon and sandwich).

All told, the pack cost $94.48. When we took out the "grocery" items, the price dropped to $62.62. So the grocery items represented over 50% the cost of the school supplies.

Now with 20 kids in a class (although there are stories of 40 in a class)your looking at 800 sneezes per child or 16,000 to 32,000 sneezes per classroom. No wonder they need all those Clorox Wipes.

Someday maybe we'll go back to the old days. And then we'll lead all the competition by putting sleeves into the packs. They worked well in the past. (Of course, moms probably didn't like it.)

The Hunger Games

We went to see "The Hunger Games" Friday night. Overall, I found most of the film enjoyable. Early in the film there I had a difficult time following the cinematography and editing. The pictures moved a little too fast and switched too frequently. When did it become the "best" way of filming by moving the camera a little. It used to be a steady picture until someone got this great idea to make it look "real". Not a fan.

I did find two things about the experience that I wasn't in favor of. We watched a family go into the theater with their small, age 2-3, son. The movie is pretty violent and loud, probably not appropriate for a little kid. (Boy, am I showing my age!). I'm guessing that mom and dad, not wanting to pay for a baby sitter, nor wanting to give up the movie, just decided that they'd bring the little tyke along. Of course, they'll be hard put to understand why he has nightmares. The move is PG-13 not PG-3!

The whole idea behind the story is that there's a shortage of food in the future. So two children (I guess age 17-18 counts as children) from each of the 8 districts will be selected to fight to the death and become the winner of an annual competition. The kids names are put into a bowl, based on how much food they've eaten. One of the characters, who escapes being picked, has 42 slips of paper with his name on it.

Sitting next to me in the theater was a little girl, about 10 years old, who would have had over 1,000 slips of paper in the bowl. She not only ate constantly during the movie, alternating between popcorn and candy (wrapped in cellophane so it made noise with every plunge of her hand). Not only was in throughout the whole movie, but when she ran out of popcorn, mom emptied her bucket into the girl's bucket.

I could have survived most of it except she had learned how to eat with her mouth open so each popcorn kernel was heard (but not enjoyed) by me.

Mom did show some great concern over her daughter's attempt to get picked in a future hunger game. She made sure she only drank water, not some unhealthy soft drink.