Small Business Spotlight: Miche Bag
By: Donna Fenn
You will not find Corbin Church, CEO of Miche Bag, complaining about the recession. “We’ve thrived in this bad economy,” he says proudly.
The South Jordan, UT-based company sells handbags that are customized by slipping a standard base bag into a variety of fashionable shells. Because they’re reasonably priced — $35 to $40 for the base bag and $25-$45 for the shells — Church says his product is an affordable luxury. “It’s been a depressing time and women want something that’s going to pick them up,” he says.
Based on his company’s growth rate, it seems he may be on to something. Last spring, says Church, “we worked out of my basement with 19 employees and were doing in excess of $1 million a month in sales.” Jayma Woods, the company’s first employee, recalls that when Miche Bag hired its designer, Jennie Platt, “there was nowhere for her to work, so she had to set up her samples in a huge laundry room.” Church explains that the company was so busy managing growth that it was tough to come up for air. He finally moved the company to proper office space last year.
From Growing Pains to Growth
Miche Bag is actually the brainchild of Michelle Romero, who created the bag in 2006 and brought the idea to Corbin Church and his partner Chris Seegmiller, both serial entrepreneurs. Romero receives royalties from the company but is not involved in day-to-day management.
Church and Seegmiller loved the Miche Bag concept, but building a company around it was not easy. “Our first days were painful,” recalls Church. “We sold our first product in July 2007 at a kiosk in a mall. We chose that venue because it gave us a chance to demonstrate the product and get feedback from customers.”
After a rocky start, the business started to pop in 2008, when Church learned an important lesson about how critically important good sales people were to the success of his company. “Our product requires education,” he explains. “At our mall kiosks, if a sales attendant was good they would be up all day demoing the product. But a bad attendant would just sit there. “So in the spring of 2008 the company shifted to a direct selling model, with independent representatives hosting home parties.
By the fall of 2008, 80% of the company's revenue was earned through direct selling; today the company has 200 distributors who invest anywhere from $10-$15,000 in inventory which is then sold through the company’s 4,000 independent reps. “These are ladies that either have a full-time job or they may have a family and are looking for something to do on the side,” says Church. “They're having fun selling these products. Without fail they tell me the bag sells itself.”
Church says the company has recruited an increasing number of reps from the ranks of unemployed and recession-weary people who are “looking to supplement what they have or replace what they’ve lost.” Revenues for 2009 exceeded $25 million, Church says, and his staff of 37 is growing weekly. He also says he receives 75 leads a day from people who want to be distributors or representatives.
Church says he wants Miche Bag’s distributors to have direct selling experience and enough capital to place a $10,000 -$15,000 initial order. Representatives, who are recruited by the company and by its regional distributors, host home shows but don’t stock inventory of their own, so the company has minimal requirements for them. “We do a lot of regional conferences around the country to meet with distributors and reps,” says Church.
Ramping Up the Staff
A growing number of salespeople in the field has required Church to increase his staff at company headquarters to support burgeoning sales. Since the company outsources production, fulfillment, customer service, and Web services, most full-time employees are account executives whose job it is to support the distributors who are the company’s lifeblood.
Here are some of the strategies Church has used to nearly double his staff within the past 12 months:
1. Entry-level employees are recruited from a local labor pool that Church describes as “outstanding”. Most employees are young and are attracted to Miche Bag’s fun, casual, atmosphere and its opportunities for fast advancement.
2. While the company doesn’t have a formal training program, new hires typically shadow seasoned employees and are mentored by them. “You watch the more experienced executives and you learn a lot through experience,” says account executive Brianna Paget, who has been with the company for a year. “Slowly, they start to assign distributors to you.” Church says that the younger employees do their share of mentoring as well, by helping their more senior co-workers with technology issues, such as using PowerPoint and Excel.
3. Church promotes his employees from within. The company’s vice president of retail sales (small retailers account for 20% of the company’s sales), the human resources director and the executive vice president of US distribution were all once entry level employees. “ If they’re proactive about helping their distributors grow revenue, it’s clear from their performance that they’re ready for more responsibility,” he says. “We move them up and then they help us help the other account executives to emulate their success.”
4. The collective intelligence of employees helps Miche Bag grow. “We bounce ideas off each other and you don’t always have management telling you what to do,” says Paget. She recently submitted a proposal for a new email management system that will make communicating with new distributors more efficient. “If you have an idea and they like it, the sky’s the limit,” says Paget.
But one of the best things about working at Miche Bag, says Jayma Woods, is the feedback that employees get from the reps in the field, who are profiting from the company’s growth. “We hear ‘I had a Christmas because of Miche Bag’, or ‘without Miche Bag I would have lost my house,’” says Woods.
For his part, Church predicts that those motivated reps, who he frequently meets at Miche Bag’s regional conferences, will help increase revenue from $25 million to “two and half times that at least” in 2010.