RegalWare drops multilevel market line
By Charles Rathmann, of SBT
Kewaskum-based Regal Ware has abandoned a product line sold through multi-level marketing parties similar to those used to market brands such as Pampered Chef and Tastefully Simple.
While Regal Ware, which recently purchased the West Bend Co. in nearby West Bend, sells many of its products through in-home demonstrations, the Regal Gourmet line represented a departure for the company.
"It wasn’t really multilevel," said Doug Reigle, senior vice president of direct sales at Regal Ware. "We refer to it as a party plan model. A representative will get an override on someone he or she recruits. We wound up paying about three generations deep. In a true multilevel like Amway, they pay about six levels deep, and after that there are some volume incentives."
Apart from compensation structure, the Regal Gourmet line differed from the rest of the Regal Ware line in that representatives and hostesses were pushing individual items ranging from nonstick gourmet pans, rolling pins, sauce pans, cookie sheets and skillets to timers, spatulas and other accessories.
"Typically, our distributors will either do what we call one-on-one sales and cook a dinner for the family and show them how they cook more healthfully in less time, Reigle said, "They typically would sell an entire set of cook ware – about 25 pieces."
According to Reigle, the line was not performing to expectations after two years. In time, according to Reigle, the company could come back to market with a similar product line.
"We really do want to," Reigle said, adding that the difficulty involved in finding the right people to lead the sales effort was a barrier to success. "The real problem is that I was so focused on the integration (of the two companies) that I was not watching what the people were doing. It’s the old adage that if you get the right people on the bus, and get them in the right place on the bus, everything goes smooth. But we were looking at a minimum of a six-month search and another six months to get them up to speed. We were looking at another year down the road before we were there. I am hoping we could bring it back at a later time when we could do it right."
While in-home sales generally do not require much in the way of formal marketing or advertising support, the company did have an advertising budget to support the product launch.
"We did run some advertising in some national magazines as well as spot markets where we were concentrating on getting some growth," Reigle said. "We recruited 10 people in those markets to help develop those markets for us."
Important markets for the product launch included metropolitan areas in Wisconsin, Minnesota, Tennessee and Illinois, according to Reigle.
According to Regal Ware president Jeff Reigle, other products from his company and West Bend may be eliminated, but for different reasons.
"We both made pie pans, and they are pretty much identical, and you really don’t need two pie pans," Jeff said. "There are some very low-volume cookware items that will be eliminated. … There are multiple reasons for the presence of low-volume items. Sometimes you take on a new customer that you intend to grow, and they don’t grow. Sometimes things just run their life cycle."
June 27, 2003 Small Business Times, Milwaukee
