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look there is hope... we need more of these....
Entrepreneurs
Remade in America
John Turrettini, 01.12.04
Jamey Bennett started off manufacturing his reading lamps in China. Now he uses a U.S. plant--and it has nothing to do with patriotism
If you have invented a novel reading lamp, the next step is to have it made in Asia, right? That didn't work out for James Bennett. It wasn't just the midnight calls to Guangdong Province, China that got to him, or the hassle of changing manufacturers when the first one refused to accommodate his suggestions. The final straw: When he ordered 5,000 LightWedge devices, only 2,000 arrived, four months late and many with lenses scratched and "some kind of mysterious goop" on the clear plastic surface. Even before the damaged shipment, the delay had already cost him $1.5 million in lost wholesale revenues.
A big setback for a guy who'd thought up the idea at age 17 as an adjunct to his collection of neon-light paraphernalia for beer drinkers. Three years ago Bennett put the dream to work by spending $30 on acrylic, switches and aluminum. His idea was to modify the so-called light pipe effect, where light beamed in on the top edge of a piece of glass comes out the bottom edge. His innovation was to shave a hardcover-size flat piece of clear acrylic into a gentle, continuous wedge, with light-emitting diodes shooting light into the fat top end of the wedge; the gradual fall-away of the glass forces the light out evenly across the surface, illuminating the page beneath it. Result: better light distribution than standard lamps and minimal excess glare to disturb bedmates.
Prototype in hand, Bennett wasn't ready to start making the LightWedge yet. "‘Build it and they will come' is the stupidest business plan," he says. "You have to get demand first." He should know. As cofounder of Internet home loan provider LendingTree in 1996, Bennett built a Web site and amassed hundreds of loan applications before approaching banks. (He cashed out of LendingTree, pocketing an estimated $2 million.)
Bennett's first plan of attack with LightWedge was to hit up contacts he had in the book industry, where he'd made his first million at the age of 27. That's when he sold an umbrella Web site for publishers, called BookWire, to a unit of Reed Elsevier. Old connections opened doors at Barnes & Noble; he cold-called Levenger, the mail-order vendor of furniture and gadgets for readers. They liked what they saw. "The LightWedge definitely had ‘ooh' quality," says Steven Leveen, Levenger's president.
With commitments for orders, Bennett plowed in another $60,000 to complete the design and engineering. He then met with a Taiwanese trading company to get to a factory in southern China. With another $80,000 of his own for letters of credit, he bought the tooling in China and began production in early spring 2002.
For the first several months it all hummed along nicely--until plans for a paperback-size version. The factory brushed aside all requests for any modification to the original design. Fed up, he took his new business to a plant in Shanghai. Mistake: The factory couldn't produce the right plastic textures or build to spec; Bennett spent months rejecting faulty prototypes. The late, defective shipment proved a breaking point. "If I spent a week out of every month in south China overseeing every detail, I could get what I want, no problem," says Bennett. "But I don't have the resources to do that."
Time for a radical fix--bringing the manufacturing back home. He solicited five bids for the work. A Canon factory in Newport News, Va. that makes laser printers and cartridges, among other things, won. Within three months LightWedge was back in production. It was a costly move: $140,000 in new tooling and $40,000 in dies still in Shanghai. Bennett also took a hit to the bottom line: Unit costs in the U.S. are 20% higher than in China. All worth it, says Bennett, adding that the plant is turning out "beautiful stuff." He is paying $8 apiece for reading lamps that retail (at Barnes & Noble) for $35. He's counting on netting $200,000 pretax on sales of nearly $2 million for 2003.
Once revenues reach $10 million or so, Bennett, now 35, plans to sell the Nantucket, Mass.-based firm and may launch some new consumer product. If he does, you can bet it will be made in America.
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