Covering the Market

Cardie Molina wasn’t always interested in making money. Self-described as “kind of a hippie” in her younger days, Molina considers herself a late bloomer making up for lost time with her business: importing vinyl fabric.

Sales tripled last year to $180,000 and her colorful tablecloths and other products have caught the attention of Crate & Barrel and Bath & Body Works at Home, a unit of Limited, which recently surprised her with an order.

“All of a sudden I wanted to be in business and wanted to make a lot of money,” said Molina, who considered “a bunch of ideas” before starting Oilcloth International in 1995.

Her research included taking classes in small business and poring over business books, including one by well-known futurist Faith Popcorn that listed 10 consumer trends expected to shape buying patterns. Molina said she knew she had a winner when her products’ qualities dovetailed with nine of them.

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She imports the brightly colored, durable and inexpensive fabric, printed with slightly retro designs, from Mexico. Tablecloths and place mats made from the material are popular in homes and restaurants in Central and South America. Although true oilcloth--cotton fabric waterproofed with oil--was once a staple in American kitchens, it fell out of favor decades ago. The modern, vinyl version is not widely available here.

Filling that gap boosted Oilcloth International’s sales from just $60,000 in 1996 and $10,000 in 1995. Although last year’s volume fell far short of the $300,000 Molina had estimated, she has high hopes for 1998.

The company’s growth has been exhilarating but it’s taken off in directions Molina didn’t expect. She had hoped to sell bulk fabric or yardage but found that most customers wanted it pre-cut into tablecloths or other products, a more labor-intensive operation with the same profit margin as yardage sales. Also, although she has enjoyed working with local specialty stores such as The Soap Plant in Echo Park and Table Manners in Santa Monica, Molina has glimpsed the dizzying opportunities of the mass market--even Martha Stewart’s company, which sells home goods through Kmart, is interested in her vinyl products, Molina said. The sales potential for private-label manufacturing could be enormous.

Molina, trained as a librarian, doesn’t like risk, though, and says she has taken a cautious approach to growth. That’s why the forks in the road worry her.

“It’s scary to do that. It’s a risk. And, like I said, I am a risk minimizer,” Molina said.

Taking too narrow a view of a product line, though, can also expose a company to risk. That’s where an outside consultant can help.

In Molina’s case, consultants Jean Gipe, director of the Apparel Technology and Research Center at Cal Poly Pomona, and her associate Paul Miner, a veteran of apparel manufacturing, clearly saw the need for the company to pursue sales of both yardage and products.

“We told her the manufacturing will drive her fabric business,” said Gipe, who also is a professor at the university. “It didn’t occur to her that she has to sell fabric to the manufacturers. The two are very complementary.”

The consultants were also adamant when it came to Molina’s other dilemma--whether or not to plunge into the mass market for home goods. Their advice: Don’t do it. In their opinion, Molina has a long way to go before she exhausts the sales potential of her company’s specialty-product niche and regional markets. And the voracious demands of the mass market are not suitable for every company, or entrepreneur, they cautioned.

“Cardie said something that hit home with me,” Miner said. Despite her “Why not?” talk about supplying Martha Stewart’s company, Molina had “made it very clear she wanted to carve out her own niche and have fun at what she is doing, and is really not interested in growing into a $10- or $20-million business,” he said.

That won’t be possible, the consultants said, for any small-business owner who dreams of selling to a mass marketer such as Kmart or J. C. Penney. The reality is the “volume of product you have to crank out, the quality specifications and tight delivery schedules and lower profit margins,” Gipe said. Molina would have more time to enjoy her favorite part of the business--the creative side--if she focused on developing her niche, the consultants said.

Miner estimated that the company has the capacity, based on current cash flow alone, to increase sales more than 50% to $300,000 this year. The company’s potential partners for growth are right under its nose, said Gipe: existing customers and sales reps.

The consultants also gave Molina advice on how to choose qualified sales reps, an area that frustrates Molina and many other business owners, as well as suggestions for improving her production operations and financial reporting. Their key recommendations, though, centered on broadening and diversifying Oilcloth International’s product lines with input from customers and sales reps.

Gipe sees three broad applications for Molina’s product: yardage for fabric or craft stores, personal accessories such as tote bags or makeup cases and home fashion, including place mats and tablecloths.

She discussed the pros and cons of yardage sales and advised Molina to focus on craft stores because fabric stores “are going through major shrinkage at the moment.” Once Molina gets her vinyl fabric into craft stores, she should think about developing a complementary set of products, perhaps designed to encourage consumers to create their own products with the material, Gipe said. The company already offers some personal accessories, but Gipe urged Molina to consider expanding the line.

“The fabric is low-maintenance, durable, fun and colorful enough to be appealing, fashion-wise,” the consultant said. That also works to its advantage in the home-goods market.

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Gipe suggested a two-part program to diversify the company’s product line and increase sales. First, Molina should invest time to find out what customers really want. Second, she should do a better job tracking sales details. “She has just been trying to figure that out on her own, without really looking at where her business is coming from and talking to customers more about some potential for growth and development,” said Gipe.

There’s obviously no point in developing products in a vacuum, she said. In addition to discussing new products, Molina should determine customer interest in exclusive deals--a monopoly on selling certain prints, for example. Or perhaps the personal-accessories fabrics would not be available for bulk sales. Creating a seasonal or holiday line is another possibility, Gipe said.

The point is to “really develop a relationship with her customers, of being responsive to their needs and growing her business and her customers’ business,” she said. Molina needs to develop a plan to actively cultivate working with her customers and then make a commitment to “sit down and have some eyeball-to-eyeball time with buyers,” Gipe said.

Feedback from the sales reps also needs to be improved, Miner said.

“She also has to be a little more analytical about what she sees going on in her business,” said Gipe. Molina should make better use of her financial software to track sales in the three major areas of her business and determine the appeal of specific prints and products. That information will be vital as she works to strengthen her product-development process and diversify her line.

“She kind of stumbled upon something that has its own special quality about it, and is having fun finding new ways to use it,” Gipe said. “She’s just barely scratched the surface.”

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This Week’s Company Make-Over

* Name: Oilcloth International

* Headquarters: Los Angeles

* Type of business: Vinyl fabric importer, wholesaler and product manufacturer

* Status: Sole proprietorship

* Owner: Cardie Molina

* Founded: 1995

* Start-up financing: $10,000 in savings

* 1997 sales: $180,000

* Employees: None; relies on contract workers.

* Customers/clients: Bath & Body Works, Crate & Barrel, Table Manners in Santa Monica, Soap Plant in Los Feliz, Bazaar del Mundo in San Diego, Freemont City People Mercantile in Seattle, Devony’s in Berkeley

Main Business Problem

Direction of company

Goal

Have two or three distribution centers for yardage, add several global suppliers, boost sales, create a brand name.

Key Recommendations

* Create a more diversified, balanced product line by working more closely with customers and sales representatives. Find additional qualified sales reps.

* Stay in specialty niche market.

* Improve analytical skills by using financial software to keep better track of product sales details.

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Meet the Consultants

Jean Gipe is a professor and the director of the Apparel Technology and Research Center at Cal Poly Pomona.

Paul Miner, a 20-year apparel manufacturing veteran, is a production manager at the center.