CLS: My name is Charles Sykes, today is July 17th, 2001. I'm here with Mr. Jeffery Shanken President of Wipeco. So Mr. Shanken you described that you're a manufacturer of rags. Can you give me some idea of what your customer, describe the customers that you sell to, how do you obtain business, your marketing process, etc.

JS: Okay, it's probably changed lately, we used to have sales people go out on the road. And we had people working for us for twenty or thirty years who would go out and actually go call and that's how I started in the business. You'd go door to door calling people, knock on doors, get leads, you'd go open up the phonebook or a manufacturer's guide and we'd go look in the parking lot. See what kind of wipers they're throwing around in the parking lot. If they're using rags or not. I mean I would go and look in the dumpster and see if you see these rags or if you see shop towels or something.

But that's, the sales people, there just wasn't a lot of money lately. Sales people wanted to make more money and we didn't have a huge dollar amount selling rags and paper products. My father always believed in marketing. We always had a direct mail program, postcards, samples out, we started doing that after the sales people kind of faded away. And just then that leads just recently in the last year and I think it's probably taken us nine months to get this rolling is advertising on the computer with our website. That hasn't gone so well.

Then we evolved that into a fax program, junk fax whatever you want to call it. We have a program called Fax Rush. We started faxing out about five hundred faxes a day to wiping rag companies, I mean corporations but we call it manufacturers. And back to the, I give marketing or direct mail, we want to try to direct that, first of all to the right company to find out if they are a manufacturer that can use wiping rags. So it's buying the list we always look at very carefully. Narrow it down in the computer that they have so many employees, that the more employees they have the more wipers they're gonna use. And then trying to direct that to the person that's buying it and that's the hard problem that we find. You know sales people could do that very well on the phone in making call. Direct mail you put a little line on there and now with the computer it's the same thing trying to direct that to the purchasing or marketing person or plant manager, maintenance person.

CLS: Okay so you're doing a direct fax and is there someone doing follow up phone calls from there?

JS: Yeah, they will, well could I show it to you?

CLS: Sure.

JS: It's right over here, no stay right there, I'll show you the fax and I'll give you a copy of this.

That's our fax, that we'll fax out, it's almost the same thing as a postcard that we'd send out and we're offering free samples.

CLS: Right 'cause that was a free offer on the website I remember that.

JS: That really didn't work out so well because the web goes everywhere in the world and I get people in Japan looking for five pounds of rags. And then I would get, but we did clarify that by saying qualified businesses. But I still had ninety eight percent housewives and houses asking for free samples of rags. But what I would do on the web is basically look and we would put down, I'd try to qualify by manufacturers and I qualified by how many employees do you have, what type are you using and most people didn't answer those questions all the way. But a few people did and I think we got one or two customers out of that.

This is the same thing. In the computer we direct this to companies that have more than fifty employees. And they have to check off a box, they will fax it back. I will personally make the phone call and ask them what type of wiper or what they're using for wipers and how they're using them or whatever and certain questions. And get the name of the person who's on there which is great. Then I would give that to the salesmen out there, which is an in house, -- And he will follow up which takes a long time to do. They said I haven't got the samples yet, call me back next week, next week, next week. But after I get these responses back I get about a thirty to forty percent order rate out of that. So it's just a matter of - which is a great response rate. I mean great ratio. I think it was thirty five percent the last time we did the survey. So I mean it's just getting somebody to respond and send this back to you is that they're almost, you know one out of every three is a lot of customer. But I'm sending about five hundred a day out and the cheapest way - don't laugh. I mean it, it's a shotgun effect. I'm gonna land on somebody.

CLS: I understand that, I've been a consultant I understand well.

JS: Right, direct mail people seem to throw that away. Fax, the junk faxes, whatever you wanna call it, I will do some, it's not so hard to do some like two or three times in a three or four month period. Eventually, it might get to the right desk. And they say faxes, they, you know they're always advertising, they say faxes reach about five to seven people in a company that by the time they throw them away, they're across somebody's desk and the mail goes to one person basically. And we direct it on the top to purchasing/plant manager or maintenance. Is it on that one right there?

CLS: Uh-huh, yeah.

JS: Okay. So that rate going back is, you know is way less than two percent of people that respond. But, again the, the price of faxing --

CLS: But you get a high percentage of those that you do -

JS: Right, right and the price of a fax going out is less than a penny or a penny and a half, it depends where the phone call is, and how we have the program running, what time of day we run it, what kind of rate I'm getting from Ameritech. We changed it, you know if you see the (inaudible) we change the, on the fax you can change it free delivery, prices, whatever you want to promote.

CLS: Now in terms of the interface with your customers how do they place orders? Is it primarily phone, is it more of a push, pull where they place regular orders or you wait 'til they call you or, given that you've established a relationship, you've made a first sale with someone.

JS: That's a great question because most people in this rag business order about monthly, monthly orders which is great. So once I get a customer he's gonna order every month. It's almost exactly monthly and there's a few order, people who order a couple times a year, you know but they're small users. Our typical customer, if you want a sizewise of rags there's any, about five hundred pounds, a couple hundred dollars an order.

CLS: Okay. That's an average order.

JS: Two to three hundred, I mean of course we have customers who buy thousands of dollars worth of stuff a month but, and there's customers that buy fifty dollars, three to, three hundred dollar order.

CLS: And I assume your sales people then do some sort of tracking in terms of it that should've been a repeat order or, in terms of, how can I say that, given that it is a recurring business then insuring that you check back if you need more or is just a matter of waiting until they place a call with you? Give me a feel for more, whether it's more of a push or pull kind of thing.

JS: Okay. Like I said the sales people, we had about four or five sales people here 15 - 20 years ago and that's how I started in the business on the road selling. Of course that's how you've got to survive selling any product. We agree with that but our sales --

CLS: Well I assume the one that follows up on this will also do the --

JS: No I don't because that's, I cannot give that lead to our sales people. I've spent a lot of money and effort doing these, the way we're marketing it this way. I expect the sales people to go out and market themselves and get their own leads and prospects. Our sales --

CLS: Earn their keep.

JS: Right earn their keep. I mean if I go and get these leads to our sales people every customer we have here I don't want to say it that, every customer we'd have here would be on commission and I have a built in commission cost. I'm basically working on these and my telemarketing guy but we only have two sales people and they're basically semi-retired. They're not using this as first income and when they started off I did give them a certain chunk territory and/or certain types of customers that needed to be followed up on at least once a year or once a month.

We used to have a salesman that would just call on schools and auto body shops. So he knew that school bids would come out a certain time and he knew a little territory of auto body shops he'd go and call on. But again, usually a monthly customer, once we have them, you know it's hard, there's not too many people who sell wiping rags first of all in Chicago or are manufacturers of them. There's a lot of re-suppliers that I sell to that sell wiping rags or offer it as a maintenance item, as a throw on item for their customers. We sell both retail and wholesale.

CLS: Okay now you currently have a website. Maybe just give me some feel for what you anticipated happening and extent to which your anticipation was realized in terms of, I assumed you established it with some expectations. And I don't know whether was the idea of the free offer increasing business or it was just visability or, you tell me.

JS: Okay I was just waiting until you were finished. Well basically we belong to an organization called SMART which you probably saw on our website, Secondary Material And Recycling Trade, is that off the bottom line on there or not?

CLS: No.

JS: Maybe it's not, okay. But they're located in Washington D.C. and again there's probably two or three hundred of us that belong to this organization that are graders or selling wiping rags. They started at a website basically to go along with the crowd. I was very lucky I have a nephew that's about 25 and went to computer school and got a degree in that. He did it no charge. Set up the website and got us listed and everything. So that was very nice of him and I, we could've spent thousands of dollars doing this. I don't know if I would've done it then. And then we had this idea of putting this free offer on there and then he would I don't know how this works in computer language. How we would re-list it where the free offer, there's free listings on the computer where you could go and get free offers. You could program your computer to look for free offers. Well he was very good at listing us up there, and I would get two to three hundred responses to that free offer but --

CLS: Yeah but you can register with the little search engines. That's how I came across your website cause the first thing I did is went to Yahoo and keyed in Wipeco and it came up with the offer.

JS: I stopped that because it was getting a lot of junk. I mean I don't mind doing this but --

CLS: Right, I'm not buying rags.

JS: We were not marketing ourselves to the right people. And I'm still thinking, I don't, I'll ask you when will this, when will every purchasing agent really have a computer in their office and really be purchasing material off the computer. Everybody has a computer now but are they actually searching the web? There's a lot of purchasing, I'm getting off track here but there's a lot of purchasing sites like the Manstar Municipal.com that if, when you get a bid you could list your bid on these sites, that I belong to those sites. It just by us offering the free offers we're going out to this branch of the public here --

CLS: Yeah and you're not consumer sales.

JS: Yeah right, right and I don't think the guy in the steel mill that's hitting buttons and programming the steel and looking for prices of stuff is really gonna look for free offers and that's who I'm looking for.

CLS: And you have to be able to reach him, he's not searching for you.

JS: Right, right, I maybe got one or two of those, it just wasn't worth the two or three hundred coming through every day. I might do it again, I mean things might change and, or it might be a better way to list it. But he could tell me how to list this, us on the web there for some type of site or some type of organization. I'm just talking. I'm sure --

CLS: No, no I'm making a note of it but --

JS: But yeah I don't know where there, but we're not listed like I said, it was housewives and daycare centers looking for a couple of towels.

CLS: Because you're more concerned with business to business list, not business to consumer.

JS: But, so we had to get a website basically 'cause everybody else was. And it is, it's a selling point, if you know I give out my business card I said look us up on the web or it justifies, it's an easier way to explain your business. You could, I could show all my items and offers there but it's not going as well as I thought it would, the website. I mean the computer is going very well for this fax I'm doing. The, the website is, you know just, everybody else has one I might as well have one. And my nephew did it.

CLS: Yeah and I guess the other thing, my thought would be some sort of student, temporary student to do some sort of research around but I'm sure there are magazines (inaudible) purchasing (inaudible) contacts but that's still more labor intensive.

JS: Oh to list the wiping rags under those sites. Yeah. I even qualified it saying you would have to be a qualified business on my website. And people responded. I just stopped responding to it sorry to say. Some people said I could get in trouble for that and you really can't, I mean.

CLS: In terms of your website give me some information and, is this in house or is it, I don't know how it's set up in terms of whether you have it here or whether it's hosted outside. Is it on a PC here in your facility?

JS: He's in California so I assume he's done something out there.

CLS: Oh okay.

JS: Is that the way you're supposed to do a website, you don't list it on your own computer or I'm not sure how it works?

CLS: No, not at all, there's no standard way at all, it's can be anywhere really. So it could be listed on your provider, you know you don't even have it on the computer --

JS: Right, right, it's not listed on our computers, it's somewhere out in the California site. For safety he said.

CLS: Okay.

JS: I don't --

CLS: But that means also you don't have the overhead of someone... Now when they respond how do you receive that information?

JS: My email. It would come to my direct email.

CLS: So then that site comes to your business email.

JS: Yeah. It was, I mean it's great, to look at it right away and try to qualify it.

CLS: So basically that's it. What I'd like then is just some general demographic information. First of all given that you do have computers here in the business, how are you utilizing them?

JS: Okay first of all the Internet we've only been on it since we had the 2000 problem. So we should, we first went on the computer I think '91 or '92 I mean and whatever they were not Internet capable and we were very happy with it. You know, being a manufacturing business here you buy a piece of equipment, it should last for more than five or ten years. This computer, I mean the last computer we got only lasted about seven years and then we had to change to the new one here. And your question was? How do I use it? I think we're just getting to use it on the Internet and stuff like that. I mean we basically use it for everything from payroll to the billing to invoicing to --

CLS: Okay so you're doing the basic accounting, financials?

JS: Everything, yeah we do even our own payroll. And we're trying marketing on it. I mean that's what really sold me on a bigger, better computer is that we could market and sell off of it. And I just bought this Fax Rush programs.

JS: Right, right, right. We went, after the last fiasco, I wanted what everybody had, everything, all the software better be Windows and this and that, what everybody has, so. But also we bought the same computers in Milwaukee too. So we have PC Anywhere and we have a lot of programs that we could work together and if they have an accounting problem they could call us or we could call them. And that was the same thing we did with the last series of computers and that was you know having a sister company separate, we're a separate corporation but we still could help each other with our computer problems instead of calling the computer guys.

CLS: It was tailored to what you wanted.

JS: That's the way things worked ten years ago. Oh it was beautiful.

CLS: Yeah, yeah that was an independent.

JS: Oh and the guy made a lot of money and he, he went to work of course for a big corporation to do it for themselves but, so I had to buy the standard package. And it's like I, we had a great, another great program we had we could hit a button or print out a report of, we had cycles, if this customer ordered every thirty days, sixty days or ninety days. So I could say I want to look at my customers that order every month that are thirty days or sixty days past their monthly order date. That's like looking at your receivables for the past year but we'd look at our customers. I just had to buy an eleven hundred dollar program to try to do that in this computer and it still just works okay, I mean just to give you an example how to customize it and then to buy another program to try to hit this, to get this one looking at my customers that are, that haven't order in the last month.

CLS: Oh well that answers the question I was asking about the follow up (inaudible) --

JS: Right, well it's very important to follow up on our customers. The sales people, you know they have a Rolodex or a book or a card, the old computer I had, I could give the printouts to the sales people and say look your customers haven't ordered, you ordered last month and they haven't ordered for two months now - call them. It was so easy. And now I got this fancy Internet computer and this and that and, but I bought this program, we just started using it and my telemarketing guy in the middle there Bob does that. And it, he's got a, it's this thick and it took him nine months to get that working. And we're way behind on it and I'm sure I've lost customers. But it's good, I mean in the, eventually I assume this computer will be better than my old computer but I think I'm only halfway there.

CLS: The other thing, I don't know AccountMate so I'll look at that and see but a lot of the standard accounting packages that you have now already have hooks for web interfaces in terms of, customers being able to inquire or place orders etc. So to some degree if you go back and start and decide to expand on your web presence you may find a lot of support was already built into your accounting software for that where you wouldn't have to go in --

JS: Right but a lot of our customers aren't ordering over the Internet. If you wanna ask how they do order most of them do call in. And talk with Vanessa or Julia, how we doing, and they order their product. Ten percent probably fax in their orders. And, a few or some people order right off of that card and say you know I want an order, (inaudible) my samples. And we don't get too many orders over the computer. I mean on the Internet, I don't know why someone doesn't email in order in. That's just not where we were at like you were saying. We do and we have credit cards and everything we do over the computer. I mean we do offer that you can order but.

CLS: Let me just run through a few other acronyms right quick to see what else you do on the computer. Do you do anything, so they're faxing orders, are you tracking any of your customer orders over the computer? In terms of anything you do on the computer around processing a customer order. Or is that strictly outside the computer?

JS: What do you mean tracking?

CLS: Basically given someone that's ordered, placed an order then are you doing, are you entering that order on the computer itself in terms of, thereby, keeping track of the customer's orders, what they've ordered, is there any sort of customer order processing you're doing on the system or is the processing primarily outside the system?

JS: I think I understand your question. You mean as they order we put the order in the computer and a piece of paper goes out to our plant with a picking slip --

CLS: That's right.

JS: Yeah, and then he pulls the order from that. And if it's UPS, she'll print up the labels, everything is done on the computer. I mean we depend on it a lot. Way too much.

CLS: (Inaudible) you do inventory and accounts receivable?

JS: Everything, everything I mean --

CLS: Sales analysis?

JS: Payroll, sales analysis like I said we just started doing that.

CLS: And general ledger in terms of your books?

JS: Yes, way too much.

CLS: Anything in terms of purchasing? Are you using the computer tracking anything around purchases?

JS: Our Milwaukee company does use purchase orders and we do not use them here. Cause as soon as you purchase something you have to expense it, and if I change the order - no, I'm having trouble with it.

CLS: And your Internet connection, that's basically over a modem, --

JS: We just went to DSL, which -- not happy with that.

CLS: In terms of response time or bill or?

JS: Bill. I mean Ameritech sold us the thing and they sent me a two hundred and twenty-dollar bill and oh it's only ninety dollars. Oh we mis-billed you, it wasn't offered in your area, after he hooked up this line. And then the Internet connection we had the wrong phone number for it at first. And that's probably the, one of the biggest problems with the computer, being on the Internet, the Internet connections. That software gives us more trouble and screws up the other stuff in the computer. But we all have computers at home and we're all learning it and it's usually the same problems. You know the Internet connection screwed this up or that or – So to answer that question I mean that's the nightmare sometimes but you guys wouldn't have jobs right? That's what we say here.

CLS: (Inaudible).

JS: Right.

CLS: Continual expansion. You started in 1970, I think it's on the website.

JS: Yeah a little rag business but like I said we had the diaper service business before that and

now we're vertically set up as a greater clothing, separate corporations.

CLS: Okay, okay that explains the discrepancy because when I saw reference to one of the marketing lists it was like seventy years in business and then the website said nineteen.

JS: Right the Continental Textiles, its sister company, in Milwaukee, you could look up their website. And actually for them, the Internet works very well because they are selling clothing throughout the world and somebody in a third world country could actually get access to a computer and find out about us. And we have gotten some very good leads and customers by that way, being worldwide like that and another, I mean like I said we're selling from Australia to the West Coast of Africa to anywhere but the Russian Republics.

CLS: And now when you mentioned the clothing that was still usable that you ship to the Third World countries, that's sold like by the bale there?

JS: Smaller bales than are out there, hundred pound bales, and they're sold by the container, forty five, fifty thousand pounds per container. And the reason they're sold in smaller bales is because these countries they go to they don't have forklifts, trucks or equipment. Stick it on the back, they got fifty guys and they put it on their back and the next question is asked me where is it sold to in that country. And my brother-in-law's been there and it's sold to small little shacks in towns as, the woman that can't go to K-Mart and buy a bra is an example, your underwear I mean. And we're so disposable with our clothing in this country that we get a little stain or rip or a tear and we'll go buy something new like that.

CLS: I've given away bags of the kid's clothes. Okay they've outgrown this so --

JS: Right, well kid's clothing is a good example right. So I mean we purchase that and that's how these charity institutions make money but, our quality of clothing is very, very good in this country. But it's also very inexpensive but on the freight like I explained to you and the way the dollar is.

CLS: Okay. Then just two quick things, one do you have any suggestions given that DePaul is looking at starting a small business support center in the area. Egan Center already has tech training programs, do you have any suggestions for the kind of, what kind of services you would like to see offered or available to you to assist you in growing your businesses? And it's not only the technical end from School of Computer Science. We also have the College of Commerce, they have a Quality Institute, the ISO9000 certification and that sort of stuff, so given the various entities within DePaul, what ways do you think they can be of use to you?

JS: ISO we're, our sister company's trying to do that up in Milwaukee. I mention that, I'm not sure I understood the question. Well how would I use some of your students or people training these days in our type of business?

CLS: Well really not only students but even professors, 'cause a number of professors are industry consultants in various areas and so --

JS: Could they sell wiping rags or? I mean that not to cut you off but I mean our whole business is selling, is marketing and selling. And that's the reason I got, uh, a fancier computer is to sell, sell, sell, sell as my father would say. I'm not sure. I'm not sure I understand the, the specifics of the question. But I know ISO we are working and trying to do that one place.

CLS: Okay and that would apply to them. Even here when I look at the investment technology in terms of experimenting with the web and that sort of stuff. Then possibly there may, if there was a resource available to assist you in expanding on that, experimenting with that, one not only students but also professors and maybe, in some cases what they've done like for the junior experiential services, students have developed websites like community organizations, as a class project so to speak.

JS: Right but where does that help, I mean this thing I was talking about where I could be listed on the web, if somebody knew that specifically. I mean I don't, I guess I could research it or look or see where it would be listed or you could help me or a student or somebody.

CLS: Yeah right I could check with somebody in ecommerce around the search engine you have to be registered with for that.

JS: But I'm not sure I've answered your question.

CLS: Partially you did, one the College of Commerce deals with marketing issues, which I don't know - it was hard enough selling myself as an independent.

JS: Right.

CLS: The other avenue from a technology end given your investment in say accounting packages, you already have networks, etc., and you and the sister company support each other, then too I don't know if there is any kind of technical support that --

JS: Oh yeah, I use that big company New Tech Data and right, it seems like they're on the payroll. I mean and there's certain stuff that we all can't learn in the office here so we depend on them totally for problems and fixes. Instead of just turning it off and turning it on everyday like fixes half the problems sometimes. But --

CLS: Maybe that's because I'm thinking about --

JS: And what is that del, delete, alt, clear is the two buttons I need to know.

CLS: Control, Alt, Delete.

JS: Control, Alt, Delete, that works fine half the time. That got the space shuttle off the ground, didn't it once?

CLS: There's a standard inside joke about Microsoft and that.
Okay yeah then that's the thing I was looking at even in terms of if there was additional, technical expertise in the center that could act as advisors or --

JS: Shoot they'll have jobs the rest of their lives the way it looks like it's going. I mean yes I will definitely need technical advice. Somebody comes to me with this program, a tracking program on my customers. Data Habitat is the program we bought, out of AccountMate that I had to track the customers on those cycles. So somebody developed that, it's called Data Habitat. But right somebody had to sell me that and now I can work with it.

CLS: Okay, I thank you.

JS: Thank you. I hope I answered your questions or helped somebody.