A local husband-and-wife design team will soon have their product sold through direct-response TV and at major retailers nationwide through a licensing agreement with Massachusetts-based distributor Harvest Direct.
Chris and Kat Costello, owners of Green Alley LLC, started developing the “zpr bag” in 2007. The product is a customizable handbag designed for teenage girls. Z-P-R is texting language for zipper.
“For us, it represents an opportunity to really sell the bags to the masses,” said Chris Costello. “To make it national and hopefully international.”
Under the deal, Harvest Direct will have exclusive rights to market, manufacture and distribute the product.
“They get a pretty decent cut of the profits, but it’s the best deal for us as a startup company,” Costello said.
The couple invested between $150,000 and $175,000 of their own money to develop the product. Both had previous careers in marketing and had started a small children’s entertainment business before coming up with the handbag concept.
Up until now it has been available through their website and at a handful of small stores and boutiques across the country. With the new licensing deal, their product is expected to be widely available at national retailers within Harvest Direct’s distribution network, which includes Wal-Mart, Walgreens, Target and others. Costello said they will still be sold to boutiques; they are talking about creating a slightly higher-end version for sale to smaller retailers.
But the first step will be the direct-response television. Costello said the plan is to run the ads in five or six test markets and then make rollout and volume decisions based on the response. The company aims to have the ads on air by the beginning of April. Television distribution has always been their ultimate target, Costello said.
They have a current inventory of about 10,000 bags but expect to ramp up production based on the response from television sales. The bags are made in China, and Costello said he expects Harvest to continue with the same manufacturer.
“Through trial and error, we found a really great manufacture that also understands and believes in the product,” Costello said. “It’s a difficult thing to find a Chinese manufacturer not only that you trust and has good prices, but is coming up with ideas and suggestions.”
Last year the couple hired a sales team to aggressively pursue opportunities to sell the bag to a wider audience, and Green Alley frequently attended trade shows and show rooms to find an interested party. That led to talks with four or five distributors, but the company ultimately chose Harvest Direct.
“The folks over at Harvest immediately got it and saw the potential we saw all along,” Costello said. “They also had a really good relationship with a television producer used to creating spots for teenage products.”
Costello isn’t sure how the economy has affected sales of the product; they received their first shipment last August. Since then they have sold 842 units. But he believes it is a product that will be particular appealing during tight economic times.
The bags sell for $19.99, which Costello says is a “magic number” during a recession.
“You can reconfigure it into so many variations, rather than having to have five or six different handbags, you can just have one,” Costello said. “The value proposition is very compelling.”