ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, April 21, 1996 TAG: 9604190068
SECTION: BUSINESS PAGE: 1 EDITION: METRO
SOURCE: MEGAN SCHNABEL STAFF WRITER
Libbie McCutcheon isn't crying too hard over her failed bid to appear on QVC's Virginia showcase. It's just tough to stay upset for long when instead the biggest retailer in the nation has agreed to sell your product.
McCutcheon's ForeverKeeps cardboard storage boxes, rejected by the home shopping folks, will have its debut on shelves nationwide at Wal-Mart stores within a week or two.
That's consolation enough for the Roanoke entrepreneur.
"QVC would have been nice," she said. "But compared to Wal-Mart, it's nickels and dimes." Wal-Mart has ordered 21,000 packages - with two boxes per package - as a trial. The packages will sell for less than $10 each. McCutcheon figures she'll make more than $5,000 from this first order.
McCutcheon came up with the idea for her boxes when she couldn't find anything cuter than a plain cardboard box to store her kids' artwork and school papers. She took her idea to her kids' art teacher, Janet Wimmer at Roanoke Valley Christian School, who designed pictures for the box. Then she approached Corrugated Container Corp. of Roanoke County, which agreed to put together some prototypes and, if someone picked up the product, to manufacture the boxes.
She sent samples to Wal-Mart, Kmart, MJ Designs. She mailed letters to even more companies. "I wanted to go national right from the start," she recalled.
Several months passed. Finally, Wal-Mart responded. After a few weeks of negotiations over the price, the company committed to an order. The boxes will be sold nationally, at 1,200 of the company's 2,000 stores.
From start to finish, it took just over a year for McCutcheon's idea to hit the shelves.
This isn't the first time that Bentonville, Ark.-based Wal-Mart Stores Inc. has taken a chance on an unsolicited product idea, said company spokesman Keith Morris.
"There's a lot of opportunity for state suppliers and local manufacturers to work with Wal-Mart," he said.
If customers like the ForeverKeeps boxes, Wal-Mart probably will place another order. If the boxes don't sell, the company will absorb the loss and move on, he said.
"There is a certain amount of risk involved," Morris said. "But without trying, you'll never know."
McCutcheon doesn't stand to lose any money, whatever happens. Corrugated is covering setup and production costs, in exchange for most of the profits. McCutcheon will receive a 5 percent commission on the boxes sold, and she'll pay Wimmer out of her share.
There are, of course, non-monetary rewards.
"It's so exciting to see my idea turning out like this," she said, pointing to the conveyor belt that was carrying package after package of ForeverKeeps boxes to a storage room at Corrugated. "After I get this going, there are so many other things I'd like to do. I want to quit this part-time income stuff and be a true entrepreneur." She and Corrugated are designing a dorm storage box featuring the Virginia Tech logo, and she wants to expand to other colleges.
She had been warned not to let Corrugated into the deal, she said. Radio financial adviser Bruce Williams told her to finance the production herself. She should borrow the money, he said, or take out a second mortgage - whatever it took to remain independent of a manufacturer.
McCutcheon balked. She and her husband had never borrowed money for anything - they didn't even take out a loan to buy their 1988 Pontiac station wagon - and she wasn't about to start now. She would rather leave the risk to someone else and take home fewer dollars.
"I might not make as much money," she said, "but I'm still making more than my part-time wage. I'll just have my 1988 car a little longer."
LENGTH: Medium: 73 lines ILLUSTRATION: PHOTO: Cindy Pinkston. Libbie McCutcheon's idea for a specialtyby CNBbox for keepsakes has taken off with an initial order from Wal-Mart.
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