Jim Caldwell first became interested in making infomercials in the late 1980s after seeing a TV sales pitch for motivational tapes.
While buying $350 worth of the tapes, the former host of such short-lived game shows as "Tic Tac Dough" decided to start his own infomercial firm to hawk business opportunities and products.
"I saw them making money and thought 'I can do this, too,'" Caldwell said.
He launched his own company, Sherman Oaks-based Future Thunder Productions Inc., in 1989 and has since produced about 35 infomercials, hosting most of them himself.
The company has seen revenue jump from $400,000 in 1992 to $1.9 million in 1999, in large part because of lucrative deals that Caldwell made over the years for a cut of sales from the products featured in his infomercials. He believes revenue could reach $5 million this year on the strength of those contracts.
Some clients come to Caldwell with products already in production, while others don't even have a patent. If he believes a product is useful and can be easily demonstrated on television, he negotiates for a percentage of sales either on the products sold directly through the infomercial or on overall sales.
Along with producing infomercials, Caldwell has also hired manufacturers, media buyers and anyone else needed to bring early-stage products to market.
"The fact is, if I choose right and I create a home run, I have a royalty stream," Caldwell said.
The use of infomercials has steadily expanded over the past few years as big-name companies like Toyota and Apple start using the format, said Elissa Myers, president and chief executive of the Electronic Retailing Association, an industry trade group.
In April 1998, a total of 250,000 infomercial spots were aired on cable and network TV channels, according to the Infomercial Monitor Service. In the same month last year, 300,000 infomercial spots were aired.
"Business is expanding exponentially," Myers said.
For Caldwell, success came after a few false starts. He started out by traveling to home shows in search of new products for his first infomercials. At a show in Italy, he found the Electro Dynamo, a household product designed to clean, polish and wax floors as well as other household surfaces.
He featured the product in one of his early infomercials but it proved to be cheaply made and unable to do all the things promised. Sales were dismal. "Certainly I learned a lesson about shabby manufacturing," he said.
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