Summer 2009 Magical Millions

“Everyone loves a magic show,” says Aviel Shor, president of Tricks R Us, home of Mr. Fuzzy, in Las Vegas, NV, with 50 plus cart locations. Shor has crafted a thriving business on a worm that emotes—he can be daring, curious, shy and loving—and a captivating show that leaves audiences in awe. These shows, or demonstrations, draw shoppers in like magnets. After all, who doesn’t love a dose of free entertainment while shopping, especially for the kids? Individual shoppers soon multiply into crowds, mesmerized by a worm no bigger than a magic marker crawling through the center of compact discs, giving goodnight kisses and jumping from one cup to another, like magic.

Magical appeal

Mr. Fuzzy has been sold through carts and the concept has been enormously successful. There are many reasons for the company’s success, says Shor, who quickly reels them off. “First, there is the high mark-up of the product. This is a great advantage profit-wise to the owner. Secondly, there are low start-up fees. The owner of the cart invests almost nothing and risks nothing. It takes only three days of training before [retailers] start to produce money quickly,” says Shor. “We have a very professional team here and our trainers are the best. It’s not a solicitation product; it catches the customer’s eye. It’s good for all ages and genders. It’s new, and every new product in the first year or two is really successful,” he says.

How are the Mr. Fuzzy’s many magical feats pulled off? While no true magician reveals his secrets, Shor will tell you tricks are performed by manipulating an invisible thread connected to Mr. Fuzzy’s nose and body. By maneuvering this thread, the demonstrator can make his worm appear “real” and “alive,” says Shor, as if it’s moving on its own.

Magical is also the word that comes to mind for Shor’s quick rise to success. His introduction to specialty retail came about in 2007 when he joined a distributor of Dead Sea products. Shor traveled to various locations teaching retailers how to sell cosmetics and set up their business.

mr fuzzyNot only did this experience introduce him to the world of specialty retail, it introduced him to the world of demonstration products. So when he launched his own specialty retail demonstration business, less than a year later, he was able to pull from techniques that were useful and cast aside those that were not. One of the techniques he chose to cast aside was that of the sales approach. “You were supposed to stop people,” says Shor, referring to mall shoppers passing by the cart. “The way it was sold, some people got the impression it was cheap.”

Shor knew he wanted to venture out on his own, but he didn’t have a concept he felt strongly about. And then one day while searching the Internet, he found one: Mr. Fuzzy. Well, not Mr. Fuzzy exactly, but the product about to become Mr. Fuzzy. “After researching more about this product, I thought, ‘Wow, this is perfect for us. I can make it part of a show. I can catch the eye of the person walking by and they can come up to the cart by themselves’,” he says.

Building the business

Shor didn’t jump into business alone—he brought along an experienced partner, Niv Goldman, who is co-owner of the company today. They met when Goldman was on vacation in Naples, FL and discovered they were both looking for new opportunities. When Goldman heard about the concept, “I knew it would be a huge success,” he says.

mr fuzzyAnd this is exactly what it was when Shor and Goldman opened their first cart in Houston, TX at the end of 2007. With Mr. Fuzzys flying off the cart, they quickly opened five more locations throughout the area. Customer reaction was so strong, in fact, Shor saw some customers arrive on the scene after a show, witness the long line of customers waiting to buy the product, grab one for themselves, and then get in line, without even knowing what it was they were buying. He calls this the wave effect. “People follow each other,” he says.

After the holidays, Shor and Goldman decided to move headquarters—they packed up their carts and headed to Las Vegas. “It was success from the first moment,” says Shor. The first cart they rolled out wasn’t even completely ready and they still pulled in close to $3,000 on opening day.

2009 and the show gets bigger

When something causes a sensation, word gets around fast in the specialty retail industry. Before they knew it, retailers were banging on their door to start their own Mr. Fuzzy business. So Shor and Goldman decided to distribute their product, and soon enough they had 50 cart locations under their belt. They plan to increase that number to 400 by year’s end.

The company still has some locations of their own, but the number has been pared down significantly. Last year, company-owned locations totaled 21; today they total eight. “Last year the main focus was on retail,” says Shor. “This year we decided to make it huge and put most of our effort into wholesale.” This strategy appears to have paid off. According to Shor, the company has “grown profit-wise five times more than the year before.” And as the company has grown, so have the roles of Shor and Goldman. Today, Shor focuses on the leasing end of the business and Goldman on product development and shipping logistics.

The path to success

“What we’re selling is the trick,” says Shor. “People want to find out how it’s done.” And at the price, $14.99-$20.00 depending on location, “everybody can afford it,” he says. Each Mr. Fuzzy comes with an instructional booklet to learn the tricks. It also gives customers access to the Mr. Fuzzy website where they can learn tricks by watching training videos.

While magic worms have been in the marketplace for close to thirty years, says Shor, his is different.

“I created the character, Mr. Fuzzy. I made it more human,” he says. Shor changed the material used in making the product and the way it was packaged, as well. “We took it one thousand steps up,” he says. Another thing separating them from the competition: “We were the first ones that took the product off a shelf and made [the worm] the central character in a magical, fun show,” says Shor.

And the show is what it’s all about. It’s a perfected demonstration. One of the key demonstration strategies Shor teaches his retailers is called the wave system. “Like you’re catching a wave, if you’re a surfer. When people see other people stop, it makes them more curious,” he says. The demonstrator learns how to catch a wave, and bring more people to their show, before his best tricks are revealed. The tricky part is, “he still needs to keep the people on his cart interested until he has enough people to do the main show,” says Shor. If done successfully, a demonstrator can be surrounded by as many as 50 people.

Other sales techniques retailers taught include how to close a sale—you’re 50% of the way there when a child has Mr. Fuzzy in his hand, says Goldman—and how to have multiple sales. “All of this is very easy. It’s not like with other demonstration products—where there are many of them to talk about—and so the explanations can take up to an hour,” says Goldman. The show takes about two minutes and the rest is in the closing.

mr fuzzy

Mymrfuzzy.com

Because a lot of people weren’t reading the instructions on the package, and it was easier for them to learn by watching, Shor and Goldman created a website for kids to learn how to do the tricks, step by step, by watching training videos. After entering their user name and passcode—included with every product—kids can learn the Pen Flip, Crawl, CD Jump and Kiss, to name a few. For example, the Kiss shows a demonstrator standing in front of a table holding Mr. Fuzzy, with the invisible string attached to the worm tucked into his pants. He places the worm in a cup. As he pulls away from the cup and bends over, it naturally tugs on the string and pulls Mr. Fuzzy up for a goodnight kiss. A similar technique is used to make Mr. Fuzzy jump from cup to cup.

While teaching tricks was the primary objective in setting up the site, future goals include the ability to have kids communicate with other kids, or rather, have the website become “an interactive interface,” says Shor. The website also allows the depth of Mr. Fuzzy’s character to be shown through a “story of the week” link where Mr. Fuzzy’s weekly adventures are shared through a developing story.

Let the magic begin

For retailers interested in getting started with Mr. Fuzzy, Shor, Goldman and staff assist in as many ways as they can, including cart design. They can also provide custom-designed carts for areas where they might not be available or when centers are fully leased. “We’ll bring our own units, as long as there is a spot for electricity,” says Shor.

Training is another important part of the Mr. Fuzzy experience. Retailers are trained extensively on-site, or at corporate headquarters. A three-day training period focuses on the many tricks Mr. Fuzzy performs, as well as how to effectively draw huge crowds using skilled demonstration techniques.

Start up costs range from $1,000-$3,000. This fee includes plenty of Mr. Fuzzys, DVDs, T-shirts and polos. In addition to this cost, retailers need to provide two LCD screens to play a demo video and supply their own cash register.

In exchange, retailers selling Mr. Fuzzy can expect to make around $100,000 in sales per holiday season for a location, says Shor. With a high mark-up—1000% and up—retailers have the flexibility to offer their customers incentive packages, or deals, such as, “Buy three Mr. Fuzzys and get one free,” or “Buy three Mr. Fuzzys and get a free DVD.”

As for which centers Mr. Fuzzy does best in, Shor says his product thrives in all types of malls, from A-plus centers on down. This is a great advantage, he says, “because the higher the class of mall, the more they charge for rent, but with Mr. Fuzzy you can make the same amount of money in a D mall with low rent.” All that’s needed is traffic. A location that thrives on entertainment, such as a tourist area, is ideal.

The newness of the product is certainly an attractive part of the package. Customers walking the malls’ common areas are looking for something new, says Shor, and that is what he and Goldman are giving them. Something new, something fun, something magical. Even better, they plan on keeping it fresh through the introduction of additional products featuring Mr. Fuzzy’s trademark character. (There may even be a future TV cartoon.) All this from a worm. Of course, this isn’t just any worm; it’s a worm that makes people laugh, smile and wonder. A worm that draws a crowd and makes a profit. A magical worm that Shor and Goldman have built a specialty retail empire on.

mr fuzzy

Underwater Photography By Studio J Inc.com. All other images provided by GSI Global.