Lisa Williams, PhD, recalls watching a segment on CNN and hearing a little African American girl tell anchor Anderson Cooper that brown skin like hers looked nasty. The cable network had commissioned a study aimed to recreate the landmark “doll test†from the 1940s which revealed that African American children often preferred a white doll over a brown doll because white was associated with such attributes as good, nice and pretty. CNN’s 2010 study showed racial biases and preferences towards white or lighter skin tones were still prevalent.
It was that episode that convinced Williams to launch a multicultural doll collection in 2010. “I did not want to see another little African American girl fail to choose the doll that most closely resembles her precious face because that child does not view the doll as being equal or more beautiful than the white doll,†adds the founder and CEO of World EPI Inc. in San Diego, California.
Williams had been approached by a Walmart buyer to manufacture dolls in 2009 because of her understanding of the multicultural market. At the time, she was selling a line of children’s books in 1,500 of the major retailer’s stores and generating around $500,000 in annual revenues. “I didn’t know anything about making dolls. I knew how to write and evaluate literature,†says Williams.
Today, her Positively Perfect doll collection is sold exclusively in over 3,000 Walmart stores nationwide. The custom skin toned dolls, reflecting the diversity of African American girls, retail from $9.97 to $19.97. The line has grown from two dolls to over 20 different dolls in three categories: infant (which can be placed in a baby’s crib), toddler, and Divah (Dignified, Intelligent, Vivacious, Attractive and Humanitarian), for older girls. Each doll has a unique look and back story. For instance, Divah Zair is a straight A student and artist, while Darling Dana wants to be a scientist.
Williams has grown the World of EPI into a million-dollar enterprise that employs a staff of 12 people and expects to generate between $5 million and $6 million in revenues from licensing fees and royalty payments in 2013, up from $2 million in 2012.
The company received the highly coveted designation as Walmart’s 2013 Minority Supplier of the Year. A further testament of EPI’s relationship, Williams is partnering with the retailer to develop a new collection called “Fresh Dolls.”
Later this year, the firm will unveil a Latina category. “Other cultures don’t have dolls to represent their beauty and
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A Tempestuous Journey
At the height of her professional career, Williams left academic life to start EPI Books in 2003, self-financing the business with roughly $50,000 using retirement funds and credit cards and another $50,000 from friends and family. She contracted out to authors and illustrators to produce coloring, activity, and story books that were racially inclusive. She worked with printers in the US and Mexico to publish the books which she warehoused and shipped to Walmart stores. “Walmart had these huge purchase orders. On Tuesday, you could get an order for 20,000 books; on Thursday you could get another order for $30,000 books,†she recalls.
Shifting from publishing to toy manufacturing involved a totally different business model, says Williams. Unlike with the books, she doesn’t keep inventory. The dolls are made to order and are shipped directly from the factory to Walmart.
Her biggest challenge was learning the industry from the ground up. “I didn’t even know what dolls were made of,†she jests. She did internet searches and visited Walmart stores to see what dolls were already on the shelves. She flew to China to visit factories to see how they manufactured dolls.
“Once you see what is out there, you can see what is missing and then that way you can better serve Walmart’s customer. And you have to have a good understanding of their distribution channel; your product can’t cost more than what they typically offer. You have to offer innovative products,†notes Williams. Also, she didn’t just sell one book she offered an entire book collection. Just the same, she created a line of dolls.
Another hurdle was dealing with the “status quo.†Chinese manufacturers tried to get her to take existing sculpts for white dolls and simply paint them brown. Williams didn’t need to get a patent but she did need to get a copyright on every design and sculpt that EPI created.
Once she found a manufacturer she liked, Williams negotiated a payment term where she paid a percentage upon ordering, a second payment at shipping and final payment after Walmart paid her for the product.
But the factory tried to “blackmail†her with the very first shipment by charging more than was agreed upon. Refusing to back down, she says, “I told them they could sell the dolls on the dock because I wasn’t going to pay them. They released my shipment.â€
With the second factory, Williams arranged for Walmart to pay them directly for the shipment and in turn the factory would pay her a royalty fee. As the volume began to grow more than she could finance, Williams was able to secure a letter of credit.
But when that manufacturer shipped damaged dolls directly to Walmart stores, Williams told the retailer to cancel the order. “That year I went without any revenue. It devastated my company and led to bankruptcy.â€
Walmart, however, stood rock solid, giving Williams guidance on how to steer her manufacturing selection process such as checking the firm’s track record, financial stability, and relationship with other retailers. She also gained assistance on streamlining operations and costs. “We are more efficient. Our margins are better. Our profits are better.â€
EPI’s strategic plan to grow is to expand into such categories as party wear–decorative plates, cups, hats, balloons, etc. “We also want to move into apparel and even animation,†adds Williams.
To learn more about becoming a minority supplier and landing big contracts from major corporations check out “The Billion-Dollar Supplier Diversity Club” in the Dec/Jan issue of Black Enterprise magazine.