Marketer Has Lock on Clients
Robert Paris, 44, worked in the mail-order department of a record store while attending Cal State Northridge. As he pursued a business degree, he discovered an unusual market niche: selling records and cassettes to prison inmates. He started a mail-order business aimed at prisoners, added CDs to his catalog and found himself in a narrow and protected market. Through the years, Paris has relied on his business education and learned how to finesse relationships with vendors and institutions. He was interviewed by freelance writer Karen E. Klein.
I graduated in 1980 with a degree in business administration/marketing from CSUN and decided to launch my own business. I liked mail order because I could start cheaply with a virtual inventory. I listed a couple thousand titles in my first, 12-page catalog, but I had literally none in stock. I just filled orders as they came in and started stocking the titles that were the most popular. This niche also appealed to me because I wanted a market that would have built-in “barriers-to-entry” for my prospective competitors, and this one had a couple of them.
Prisons are concerned about contraband being introduced into the facility, so they have an “approved vendor” system where they authorize only a few companies to ship a certain commodity into the facility. At many prisons, Pack Central is the exclusive approved vendor of cassettes and CDs, so other companies that might want to compete against me are kept out. A second barrier for my competitors came up about 10 years ago, when the major music distributors stopped opening up new “single-location” accounts, and in some cases suspended service to all small accounts.
It is very difficult for new operators to buy directly from the record labels, as I do. Buying direct--rather than from a wholesale middleman--gives me cost savings and a more consistent product flow.
My clientele is unusual, but I have never had a problem with an inmate. In fact, we find that they are extremely loyal and appreciative customers. They are a captive audience, but we treat them very well. You might assume that once an inmate is released, he would try to put everything associated with being incarcerated out of his mind, but apparently that’s not the case. We count many parolees as customers still.
Occasionally, we get complaints from inmates’ relatives who call to check on the status of an order. They don’t always realize that we need a day or two to process the order, then the shipment has to travel from our warehouse to the institution, plus when the package arrives it has to be checked for contraband and the contents must be itemized.
To relieve the facility of some of the paperwork burden, and hopefully ingratiate ourselves with them at the same time, we send a photocopy of the inmate’s order form showing exactly what was sent. Many facilities use this as their log-in sheet, and it saves them the time and labor of creating their own.
I have found that my business education has been extremely important to my success. Accounting, business law and advertising classes were particularly helpful because I could do my own bookkeeping, prepare documents for my accountant, do the payroll tax returns and perform office functions that I would have otherwise had to pay someone to do.
I also had learned about guerrilla marketing. For example, in the early ‘80s, Rolling Stone magazine had filler ads they gave away at the back of the book. One section was reserved for prisoners looking for pen pals. I cut out those ads and used them as labels for my mail-order catalogs. Getting my catalog into prisons was one way I got approved as a vendor at many institutions.
Keeping that approved status takes some relationship marketing. There are about half a dozen firms doing what we do, and in some facilities we’re one of two or three approved vendors. In order to establish a relationship and create a rapport with the decision makers at each facility, I send them all letters detailing the history of my company, telling a little about myself and inviting them to call or write with comments or advise us of any special needs.
The record business is personality-driven and very social, so relationships and reputation play a large part. One time I received a product list from a vendor who dealt in overstocked items. There were 10 cassette titles in his catalog selling for $1.75 each. I was willing to pay $1 per cassette and order 1,000 of each title. For greater impact, I mailed the order along with payment in full. The vendor called to say that my offer was fair, but he did not have 1,000 pieces of every title, so could he ship what he had and send a refund for my balance? Since I did business with him regularly, I told him to let the refund ride.
When I am establishing an account with a new vendor, I contact the credit manager and when they ask for references I advise them to call any of the major distributors, ask for their counterpart and mention my company. I tell them that the person will probably be unfamiliar with our account, then I remind them that a 20-year customer who is anonymous to the credit department is a customer who has never been contacted about a past-due invoice! The last time I had this conversation with a new supplier, my account was opened on the spot.
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At a Glance
Company: Pack Central Inc.
Owner: Robert Paris
Nature of business: Sells cassettes and CDs to prison inmates.
Location: 6745 Denny Ave., North Hollywood 91606
Founded: 1980
Employees: 5
Annual income: $1.3 million
