How To Make Over $10 Million, Selling Whiteboards To Hospitals
For 20 years, a little known company called Magnatag Visible Systems in Macedon, N.Y., has thrived making highly specialized versions of an item that couldn't be less special -- the erasable whiteboard. In the commoditized world of office products, this is no small feat. Basic, cheap whiteboards flood the shelves of office-supply stores. There are dozens of higher-end brands aimed at the professional market and classrooms. So universal is the whiteboard as a teaching tool, that UPS has made one the centerpiece of its current ad campaign "Whiteboard" to educate consumers about its services.
So how does a tiny manufacturing shop tucked away on the shores of the Erie Canal compete amid the fray? The answer: by taking the common out of the commodity. Instead of mass-producing generic boards, Magnatag goes the opposite route, selling whiteboard systems tailored for hundreds of applications, from athletic scheduling and church groups, to hospitals and mortgage brokers. Instead of a plain, white surface, Magnatag boards are printed with customized grids and graphics and come with equally specific supplies such as magnets, lettering, symbols and card holders.
A manufacturing plant seeking to reduce on-the-job injuries might post a "SafetyCross Safety Motivational System," which uses a variety of green, yellow and red magnets in the shape of a cross to highlight "accident-free" days. A sales operation with a large fleet of cars could opt for the "Vehicle Service Monitor" with specific columns dedicated to inspection needs. There are boards for advertising agencies and music instructors. The White House Communications Agency this month purchased a 4'x8' MagnaStaffer organizational chart.
So specific are Magnatag's applications that the company's 75-year-old founder, Wally Krapf, chafes at being dubbed a whiteboard maker. "Our boards are problem-solving devices -- they are aspirins for people's headaches," he says.
That medication doesn't come cheap. Individual boards range from $100 to about $1,500, while systems of multiple boards go for $10,000 and up. Due to volume of kits -- more than 2,300 -- Magnatag boards can't be found at retail; Mr. Krapf sells only via his own Web site and catalog. But turnaround time is quick: Boards typically ship within three business days, a byproduct of Mr. Krapf's meticulous inventory management. To date, he's sold more than half a million boards and says Magnatag's revenue is "in excess of $10 million and quite a bit above."
[Via - Startup Journal]