Young entrepreneur builds on winning design
Rick Guerra had already redesigned his exercise machine eight times when the notice came from the QVC television shopping network.
If he wanted to sell the product via QVC, another revision would be needed. But this time, it was just the shipping box that needed a change.
It was a minor item, Guerra notes, but one that points out the delays that entrepreneurs can face when trying to bring a new product to market.
Television shopping shows can offer a great boost for new product developers. A huge audience of willing buyers is virtually assured -QVC received more than 84 million phone calls and shipped more than 50 million packages in 1996 and says it averages 113,000 orders per day. And the entrepreneur can get by with little overhead as no physical retail outlet is needed.
But as the 41-year-old Guerra has learned, acceptance by an operation such as QVC comes with a price. For example, his desire to have his Simpleflex made in America was thwarted by a need to lower the price. The product is now made in China, although an American-made version is available – for a higher price.
The product also had to be redesigned to fit in a UPS shipping box, Guerra says. Guerra did that. But then QVC submitted the product-in-box to its drop test.
“They lift the box a foot off the ground and drop it 11 times,” Guerra notes. If the product is damaged, a box redesign is required. “Mine scratched,” he notes. And thus the box had to be redesigned.
Further, it turned out that the Simpleflex labeling didn’t meet QVC’s requirements – another item for Guerra to address.
But he views all those matters as minor compared to the market position QVC will offer him. The network was ready to cut him a check for $15,000 once the Simpleflex and its shipping box met its specifications. If the initial run sells well, QVC could take the next step and buy $40,000 worth of product and then $60,000, based on a 40% margin it retains.
“They like to work in baby steps,” says Guerra, adding that he views the deal he’s been offered as fair.
As part of the deal, Guerra would have to buy back product that doesn’t sell.
Product evaluation takes about three weeks. Then, it typically takes three months for a product to go from purchase order to on-air appearance, according to QVC.
QVC would also like exclusivity for a year, but Guerra hopes to sideline that requirement; he has the product available at several retail outlets.The Simpleflex system is being sold at Fitness Works in Brookfield and Mequon, Wheel & Sprocket in Hales Corners, Baker’s Fitness in Franklin and Play It Again Sports in Brown Deer. Its $199 selling price will be the same on QVC as it is in local stores, although for QVC sales a shipping and handling charge will be added.
He also donated four of the units to the Milwaukee County Parks Department, which placed them at Veterans Park on the lakefront.
Guerra, a model and personal trainer who hails from Hartland, knew he was on to something when his original plans for a simple exercise product were copied and the resulting product sold. To protect himself this time, Guerra has worked under a patent-pending status.
Guerra has worked on marketing and stress tests for the product with UW-Whitewater, UW-Milwaukee and the National Sporting Goods Association.
The main selling point, Guerra says, is the product’s simplicity.
“I pursued developing Simpleflex to offer a home fitness unit to families looking to acquire endurance, muscle tone and flexibility without having to readjust the unit each time someone performs an exercise.”
He also sees the product as an alternative to lifting heavy weights. Simpleflex lives up to its name; it has no moving parts, although its platform can be adjusted.
If all goes well, within five years Guerra hopes to sell the Simpleflex through his own television infomercial. He’s aiming for sales of 10,000 units per month and has plans for other fitness and health-related products to be offered by his IAF Corp.
So far, the business has been financed with about $75,000 – $50,000 of that from a private investor and $10,000 from local government economic development programs. His minority status and his business location – 14th Street on the Marquette University campus – qualified the firm for the development funds.
While the product has been in development, Guerra has continued his personal training and modeling to generate income.
April 1998 Small Business Times, Milwaukee
