He Made Millions,Selling WhiteBoards To Hospitals

By admin at June 28, 2007 | 4:25 am | Print

The doctors on NBC’s “ER” series used a Magnatag on set to keep track of patients. This year, the New Orleans Saints mapped NFL draft picks on a Magnatag. A Colorado sheriff’s posse swears by their Magnatag for plotting search-and-rescue mountain missions. “You can get to people faster,” says volunteer Norvan Huff.

For 20 years, a little known company called Magnatag Visible Systems in Macedon, N.Y., has thrived making highly specialized versions of an item that couldn’t be less special — the erasable whiteboard. In the commoditized world of office products, this is no small feat. Basic, cheap whiteboards flood the shelves of office-supply stores. There are dozens of higher-end brands aimed at the professional market and classrooms. So universal is the whiteboard as a teaching tool, that UPS has made one the centerpiece of its current ad campaign “Whiteboard” to educate consumers about its services.

So how does a tiny manufacturing shop tucked away on the shores of the Erie Canal compete amid the fray? The answer: by taking the common out of the commodity. Instead of mass-producing generic boards, Magnatag goes the opposite route, selling whiteboard systems tailored for hundreds of applications, from athletic scheduling and church groups, to hospitals and mortgage brokers. Instead of a plain, white surface, Magnatag boards are printed with customized grids and graphics and come with equally specific supplies such as magnets, lettering, symbols and card holders.

A manufacturing plant seeking to reduce on-the-job injuries might post a “SafetyCross Safety Motivational System,” which uses a variety of green, yellow and red magnets in the shape of a cross to highlight “accident-free” days. A sales operation with a large fleet of cars could opt for the “Vehicle Service Monitor” with specific columns dedicated to inspection needs. There are boards for advertising agencies and music instructors. The White House Communications Agency this month purchased a 4’x8′ MagnaStaffer organizational chart.

A Magnatag whiteboard had a recurring role in early episodes of NBC’s ‘ER.’

So specific are Magnatag’s applications that the company’s 75-year-old founder, Wally Krapf, chafes at being dubbed a whiteboard maker. “Our boards are problem-solving devices — they are aspirins for people’s headaches,” he says.

That medication doesn’t come cheap. Individual boards range from $100 to about $1,500, while systems of multiple boards go for $10,000 and up. Due to volume of kits — more than 2,300 — Magnatag boards can’t be found at retail; Mr. Krapf sells only via his own Web site and catalog. But turnaround time is quick: Boards typically ship within three business days, a byproduct of Mr. Krapf’s meticulous inventory management. To date, he’s sold more than half a million boards and says Magnatag’s revenue is “in excess of $10 million and quite a bit above.”

That’s a small slice of the overall whiteboard market, estimated at roughly $2 billion in annual sales world-wide with about half coming from the U.S., according to one of the largest players, Acco Brands Corp. of Lincolnshire, Ill. Acco, which also owns well-known office supply brands such as Swingline and Day-Timer, markets its whiteboards under the Quartet name and sells to consumers and businesses mainly through big-box office-products chains such as Office Depot. “We’re more mass scale than specialized niche product,” says Acco spokesman Richard Nelson.

Other U.S. manufacturers have notable chunks of the business, though few if any produce the array of applications that Magnatag does. “We do some customization, but people still prefer plain in the marketplace,” says John Rouse, senior vice president of Ghent Manufacturing Inc., a large whiteboard manufacturer in Lebanon, Ohio. Other producers, such as Marsh Industries Inc. in New Philadelphia, Ohio, focus on niches such as the educational market. Still, “to some extent, one board does look like another,” says Bill Singhaus, Marsh’s executive vice president of sales and marketing.

As such, Mr. Krapf has managed to carve out a respectable sweet spot with his buffet of systems. “When you take a generic tool, and turn it into something that is very specifically about the need for a customer, then they will take the time to seek you out,” says Seth Godin, author of several best-selling marketing books including “Purple Cow” and most recently, “The Dip.” “What most people do when they go into business is they try to fit in, and what he [Krapf] did was try to stand out.”

Mr. Krapf started his informational display business in 1967 hawking a myriad of products, including traditional green chalkboards jury-rigged into displays with magnets and printed lines. He dabbled with whiteboards in the early 1970s, but it wasn’t until the mid-1980s that he landed upon his cash cow magnetized product made of a porcelain-like coating he calls “MagnaLux” over steel. While his company, W.A. Krapf Inc. doing business as Magnatag, still sells a range of items including fabric boards and photo-posting panels, whiteboard systems are now his best seller.

To date, Magnatag has spent little on marketing other than mailing catalogs.
His site:http://www.magnatag.com
More at:http://www.startupjournal.com/columnists/enterprise/20070627-bounds.html

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