How Anne Wheeler nearly lost everything

How Anne Wheeler nearly lost everything

Anne Wheeler nearly lost everything after she licensed her baby-care product to a con artist

Necessity is the mother of invention, they say. Sixteen years ago, a Massachusetts housewife named Anne Wheeler noticed that her baby screamed each time she cleaned his bottom with a cold disposable wipe. There was no wipe-warming product on the market at that time, so, despite her limited education and total lack of business experience, Wheeler decided to invent one, with the goal of selling it to all those wipe-weary mothers out there. After years of designing and testing a prototype, she applied for a patent. In 1988, Wheeler and her husband sank $25,000 of their personal savings into Wheeler Enterprises, a company they formed to manufacture and market the Comfy Wipe Warmer. Wheeler used word of mouth, independent sales reps, and a media campaign to get the message out. It worked: across the country, harried moms decided that Wheeler’s Warmer was just what the baby ordered. During her first year in business, Wheeler moved more than 20,000 units. But her success did not smell sweet for long. The Primrose Path In 1989 a sales rep introduced Wheeler to a Florida manufacturing company interested in licensing her product. It looked like a dream come true: she saw herself inventing new products and collecting fat royalty checks while somebody else dealt with the hassle of running day-to-day operations. Wheeler flew to Florida, where she was wined, dined, and treated like a queen by the manufacturer. His enthusiasm for her product was flattering, even intoxicating. When she asked to see the company’s balance sheet, he handed her a slick brochure with an impressive sales-and-marketing strategy but no numbers. Eager to close the deal, Wheeler didn’t press the man. She also neglected to check out his references and background. Springing the Trap The ink had barely dried on the licensing agreement when Wheeler’s six-year nightmare began. She shipped all her inventory to the new manufacturer – who now, according to the terms of her contract, was essentially her employer for the next three years. Consequently, this once doting suitor rarely returned Wheeler’s phone calls and never provided financial statements. Nor did he reimburse Wheeler’s substantial business expenses. Occasionally a royalty check would arrive, but so infrequently that she couldn’t pay her bills. On top of that, Wheeler’s Mexican suppliers weren’t being paid. Worse, her contract barred her from licensing new product ideas to other manufacturers. And although her own manufacturer did nothing to sell Comfy Wipe Warmers, he refused to release the license. The relationship finally bottomed out in 1995, when he filed for bankruptcy and disappeared. Just when she thought she’d suffered the worst, Wheeler saw three copycat wipe warmers on display at the 1995 Juvenile Products Show in Dallas. With her inventory and royalties tied up in court, she had no money to defend the patent. “It was my product, and I wasn’t making any money on it,” Wheeler laments. “All I could do was cry.”

Posted by on December 3, 1999

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