The Small Business Professor

Imitation, the Sincerest Form of Profit

Sharon Rowe, president of EcoBags™, Inc., of Ossining, New York was living in Manhattan in 1989, struggling to and from the grocery store with her infant son. What she needed were some strong, reusable, but light-weight collapsible bags. Sharon’s ecological awareness was heightened by motherhood and she was appalled at the amount of packaging waste found in American life, especially the ubiquitous plastic shopping bag.

Friends going to Europe prompted her memory about the cotton string bags the Europeans use to carry groceries. Thinking this might be a viable business option, Sharon and her husband, Blake, began to investigate marketing and selling them in the U.S. After finding that no one in the U. S. was manufacturing this type of bag, she faxed bag manufacturers around the world and used her personal credit to finance her first order. The bags arrived just before the 1990 Earth Day celebration, a good time and place to test the market, so they rented a table and sold the entire order of 1,000 bags in 3 hours!

During the start-up phase Sharon and Blake sold the bags through local health food stores. In a bit of serendipity, Blake ran into the driver for a large natural food distributor, which resulted in their first 5,000 piece order. Now, 15 years later, the EcoBags™ brand moves about 200,000 units annually.

In the beginning, trade shows were the key to developing relationships with distributors. Much of the company’s growth can be attributed to networking, referrals, repeat orders, and superb relationships with customers. However, company growth has also been fueled by Sharon’s ability to finance creatively, manage credit responsibly, and commit to expensive high technology solutions. For example, Sharon wanted the EcoBags web site to be top-notch. This substantial investment has really paid off; all retail sales are made through their website, which also generates 60% of new inquires.

Early on, Sharon realized that she did not want to grow the business in a traditional way, with an ever increasing number of employees, office and warehouse space. Instead, she created a modern business model based on strategic partnerships and the technology to keep them connected. Each partner, whether it’s a mom working at home or a fulfillment house in another state, is responsible for some phase of the business. Each partner has work time flexibility and Sharon gets regular, computerized reports from key partners and keeps in touch through email and phone contact. She believes this autonomy and flexibility creates a friendly, low stress environment that is good for all. For a company that started out with the motto, “Cleaning up the planet one bag at a time” the formula seems to be working. Sales for 2006 are projected to top 1.2 million
 

The Small Business Professors' Words of Wisdom

In Sharon Rowe’s case history, we see that imitation became the sincerest form of profit. She remembered a product in another market and recognized the potential value in her own marketplace. She identified an opportunity, found a way to make it happen and created a market that had not previously existed in this country. Whether you want to start a new business or expand your current product line, looking at what is being done successfully in other markets can provide inspiration without requiring that you invent something yourself. You needn’t go as far away as Europe; anonymously visiting a competitor in another state may suggest something to create an advantage in your market. Keep your eyes open for opportunity. Your next vacation might suggest a new profit pathway.
 

Case History: EcoBags, Inc.
www.EcoBagss.com

Entrepreneur’s Strategy: Create a new market segment using a popular product from abroad.

Could This Work For Me? Imitating a successful product from another market can be a short cut to profitability.
 

Sharon ... was appalled at the amount of packaging waste found in American life, especially the ubiquitous plastic shopping bag.