Billy Jack Shelton started his Culver City business, Shelton’s Sheen Wave Labs, over 30 years ago. He was one of the first manufacturers of ethnic personal care products in the city of Los Angeles. Even after all these years, he still has trouble placing his products in stores. Shelton spoke with Karen Teitelman about the difficulty of placing ethnic products on the market.
I started out with a supply company called Watkins Products. I was doing strictly door-to-door sales. I did so well for them they offered me a franchise in Washington, D.C. and a scholarship. Well, I turned down the franchise but took the scholarship, used it for school. I graduated from UCLA, and then started working for a beauty supply house, when I became interested in beauty products. I started making things in my kitchen and began giving it away. People started to get interested in the stuff I was making.
Over the years I have done private labeling for people, meaning that I make the product and other companies would put their label on it. It was not easy, but I have been able to stay in business.
The biggest problem I have is getting shelf space in stores. I make all kinds of products, but I’m limited by the fact that ethnic products are always put together in a store and there is a limit to the shelf space they make available. All of the stores, and I’m talking about the big chain stores as well as the little ones, will only allow 3 feet by 8 feet of space for all ethnic products. You will notice that if you want to get an ethnic product, they are all together in one section.
Most of the stores won’t deal directly with manufacturers too many buyers running in and out. So you have to deal with someone called a rack jobber. The rack jobbers are the ones who deal with the stores, they stock the shelves and then bill the manufacturers; they have a separate deal with the stores. This is such a difficult situation. Most of the rack jobbers want 40 percent of your sales, they will give maybe 25 percent to the store, and still expect you to throw in a couple of cases of product on the side.
It’s really a situation of swimming or drowning. You have to go under the hammer or get nothing. These stores have contracts with these rack jobbers so you can’t even go directly to the buyer if you wanted to. If you want to survive, you just have to give them what they want.
