Great Business Ideas: Take Some Advice from the Mail-Order Queen (LILLIAN VERNON)

Great Ideas for your Small Business:

Take Some Advice from the Mail-Order Queen (LILLIAN VERNON)

The first thing i thought when I met Lillian Vernon was, “Wow, I hope I have as much energy and look as great as she does when I’m older!” This petite powerhouse of the mail-order industry started her business on her kitchen table in the early 1950s.

She was pregnant and needed to earn money, but working outside the home was frowned upon at the time. Her father was in the leather business, and she thought she could make money by selling his fashion accessories.

Taking a risk, she placed a $495 ad in the September 1951 issue of Seventeen magazine: “Be the first to sport that personalized look on your bag and belt,” read the ad touting a $2.99 leather purse and $1.99 belt. That ad, placed by Vernon, a suburban New York housewife and mother, garnered $32,000 worth of orders—a huge amount of money at the time.

It also launched a mail order empire. “I make quick decisions based on my golden gut,” said Vernon, who named her firm after the New York suburb of Mount Vernon where she lived. Later in life, she changed her name legally from Lillian Hochberg to Lillian Vernon.

In several interviews, the feisty entrepreneur told me how, despite a lack of formal business training, she turned $2,000 in wedding money into a successful mail order business serving 18 million customers. “To this day, I don’t know how to read a financial statement,” she admits. “I still need help with the numbers.” She doesn’t need any help selecting merchandise. Every year, hundreds of items are submitted by eager vendors.

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Only a fraction ever make it into her slick catalogs. Her biggest hits are the items she dreams up herself. For example, once Vernon received 120,000 orders for the Battenburg lace Christmas tree angels she designed. Not bad for a Jewish woman whose family fled their comfortable life in Leipzig, Germany, after the Nazis threw them out of their home in 1933.
Vernon’s rags-to-riches story is detailed in her amazing autobiography, An Eye for Winners (Harper Business; 1997).

Vernon’s book stands apart from many autobiographies because it combines intimate and often painful details of her life story with practical business advice.

Known for her sharp wit and strong support of Democratic politics, Vernon told me her company has flourished by finding the right professional managers to complement her entrepreneurial style. But the process hasn’t been easy. “At one point, I surrounded myself with experienced veterans of large corporate cultures,” she said. “Unfortunately, they almost killed us—they took analysis to the point of paralysis.”

Now she relies on a team of skilled managers, including her two sons, to help her manage the Rye, New York–based company. Times have changed since she started the business. In the 1950s there were about fifty specialty catalogs; now, there are nearly 10,000, generating about $70 billion a year. The tough competition keeps Vernon busy. A few years ago, she said, 89 percent of the items in her catalogs made money; today the percentage has dipped to about 79 percent.

A few years ago, mail-order industry analysts criticized Vernon for lagging behind competitors when it came to using modern technology. For example, the company, which went public in 1987, didn’t install toll-free 800 lines until 1993.

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Today, the company operates a one-million-square-foot warehouse in Virginia Beach, Virginia, and keeps close tabs on customers with sophisticated computer programs. Vernon said she sells via 180 million catalogs a year, nearly 100 editions in all.

Vernon, the queen of free personalization on most merchandise, offers this advice to small business owners: “Risk your own money, trust your creative instincts, and find someone who can execute your vision.”