A Funny Thing Happened On My Way To The Poorhouse

by Heather Allard on October 16, 2008

I have waited six months to write this post for many reasons. Had I written it last spring, my theme song would have been this:

Time has given me perspective, and now, my theme song is:

I hope you enjoy hearing my story. I think it’s an interesting one, full of twists & turns and for the most part, it has a happy ending. It’s made me who I am today–The Mogul Mom.

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As most of you following my blog know, I entered into a licensing deal with a big baby products company after my third child, and first son, Brendan was born 2006.

Brendan had major health problems (severe eczema, allergies, RSV, ear infections, etc) and required my full attention. Like a “perfect storm”, this coincided with major growth for my company–my second invention, Blankeaze, was picked up by One Step Ahead and forecasted sales were BIG.

Motherhood trumped entrepreneurship and I had to do something with my company. And fast.

As fate would have it, I read an article about Summer Infant in my local paper. They’re based in RI, too and the article talked about how they’d gone public and were looking to expand their product offerings. Ding. Lightbulb moment.

So, I pitched them on buying my company and they bit–but with a licensing offer instead. They said they could incorporate my products into their lineup very quickly and that my royalties would be handsome. Very handsome. So, I signed the licensing agreement with great confidence & relief–it was a “win-win”. They would manufacture & market my products, I’d receive royalties. Things couldn’t have worked out better. Or so I thought.

Turns out that “incorporating” my products, Swaddleaze & Blankeaze, took longer than they thought. If you visited their website, you would not find my products listed on there. Why? Because unbeknown to me, they had to first revamp their entire website, which took a whole year. My retail & wholesale customers couldn’t find my products and I bet you know what happened–sales waned, interest waned and my royalties waned. Over a one year period, I earned about $1700 in royalties. No, I didn’t forget a zero. $1700. Divide that by 12 months and it’ll make your heart stop. Mine practically did.

Before the licensing gig, I had been earning about $7000 per month in sales. I used this money not only to contribute to our family (of five!)income but also to make monthly payments on the loan I’d taken to start my business. So now, I had $141.66 per month to accomplish this. And I haven’t even finished the story.

Being a huge Google fan, I am a big user of “Google Alerts”. Basically, you can have Google search for anything and if they find it, they’ll email you an alert. I had always done Google Alerts for Swaddleaze & Blankeaze to see if either of them were being mentioned in the news. So, I decided to set up a Google Alert for Summer Infant even before I pitched them. I wanted to learn about their company so I could make a well-informed presentation. After I signed the licensing deal, I kept the Google Alert so I could stay abreast of their earnings, news and press releases.

Can you guess how I found out that Summer Infant had purchased one of my biggest competitors? Yep, trusty Google Alert. Kiddopotamus, the maker of SwaddleMe, was now part of the Summer Infant “family”.

How would this affect me? I had no idea. But I figured it couldn’t be good for my already paltry royalties. So, I made it clear to Summer Infant that I was VERY open to any alternatives to the licensing deal, say, a buyout for instance.

About a month after they bought Kiddopotamus, they offered to buy my patents and trademarks. Their initial offer was laughable and I did manage to negotiate a better sale price. But frankly, I was at their mercy. I was struggling and desperate to pay off my debt that was accruing interest at warp speed.

Did I get a fair price? Only God and Summer Infant know for sure. But I can tell you what I DID get–an education that no money could buy. Here’s what I learned about life and licensing deals:

LIFE:
1. I have everything I need already.
2. Motherhood is the most important job on earth.
3. I will not die if I don’t have the latest bag, shoes or designer jeans.
4. My children will not die if they don’t have 72 Webkinz each.
5. God answers all prayers. Sometimes, the answer is “no”.
6. My husband is a keeper. He stuck by me even after I had caused great financial stress for our family.
7. Be kinder than you have to — everyone is fighting some kind of battle.
8. Being “poor” makes you “rich” in gratitude for what you DO have.
9. Living “without” can become a way of life.
10. Even after everything that happened, I am still so blessed in so many ways. Thank you, God.

LICENSING:
1. It’s BUSINESS, not personal. Bottom lines trump boo-hoo’s. This is hard to understand for mom entrepreneurs, because for us, our businesses ARE usually personal. They’re like babies to us.
2. Things don’t always go as planned.
3. No one will care about your products the way you do.
4. Expect communication breakdowns. Or no communication at all.
5. It’s not always the best option for small, mom-owned companies.
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P.S. In no way am I vilifying Summer Infant. They are a great company that continues to grow under wonderful management. I wish them much success with Swaddleaze & Blankeaze (which has over 300 5-star reviews on the One Step Ahead website!), as well as their other fine products.

Post by Heather Allard

Heather Allard is the founder of The Mogul Mom, wife to Scott and mom to Hope, Grace & Brendan and The Dude, her 95-pound Boxer/Shepherd mix. She’s been a mom entrepreneur since 2001 and has built 3 successful businesses, including one she sold for six figures. Read more about Heather here.

Heather has written 389 awesome posts.

{ 18 comments… read them below or add one }

1 Lilypods October 17, 2008 at 12:48 am

Heather! Thank you for sharing your story. Such great life lessons. The songs made me laugh too.

A Funny Thing Happened On My Way To The Poorhouse

Post by Heather Allard

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