Summer 2012 Hot Product; Cool Company

Helios Heating Pads

Name: Michael Pascal, Managing Director

Headquarters: Kirkland, WA

Corporate employees: 7
The company has two private investors.

Countries: US, UK, Spain, Egypt, Australia

Number of specialty retail clients in US: 45-50

Philosophy: “You need to act as if you are a year from now. Keep what is good, change what is not. Set that tone.”

Words of Wisdom: Taking care of the little things makes a big difference.

Heating pads with “magical” demonstration powers and the focus on customer service have made Helios Heater a strong contender in the specialty retail business.

Helios Heater, headquartered in Kirkland, WA, manufactures and wholesales “instant hot magic pads,” in other words, fluid-filled pads that crystallize with the push of a floating coin, and produce soothing heat for aching muscles. Not only are the pads magical, so is the team behind them, setting the tone today for increased revenue tomorrow.

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It all began in 2006, when Helios Heater’s magic pads were introduced to the specialty retail market on a cart in Delaware, and shortly thereafter, in the state of Washington. Cart count has fluctuated from a high of 25 to approximately ten today. Michael Pascal, Managing Director explains that retail was never the goal—it was only a means to an end. “Retail was just to focus on what the market needed,” says Pascal. It was to garner feedback about how to improve the product, the packaging and the way it was sold.

Through this feedback, the evolution of the brand began, with its roots strongly tied to customer service on both the retail and consumer level. “The customers call the shots,” says Pascal. “Feedback from our retailers makes us change whatever we do for next year.”

Igniting the spark

Helios Heater pads are a show unto themselves. The transformation of a cool, fluid-filled pad to a heating source is a visually impressive sight; not to mention how it feels as the heat spreads throughout the pad and is used to comfort a customer’s shoulder or lower back. (See http://www.heliosheater.com to view a video demonstration).

When the customer first uses the pack, it is filled with a liquid—sodium acetate. Sodium acetate, a food-grade ingredient found in salt and vinegar potato chips, is the opposite of ice. At room temperature it is liquid but becomes solid when heated.

To use the product as a heating pad, the customer snaps the metal coin embedded inside. The friction generated by this simple action starts a chain reaction that is enough to create heat. The pad becomes increasingly warmer (but not uncomfortably hot) and can be used as a heating pad while the sodium acetate gradually turns solid. Eventually the pad becomes rock hard and gradually cools off.

The pad can be reused by submerging it in hot water until the material inside becomes liquid again. Once liquid, snap the coin to reuse as a heating pad and the cycle regenerates endlessly. The pad stays hot for up to three hours.

Convenience counts

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Because pads don’t plug into anything, and only need a press of the coin to activate, they are perfect travel companions.

Heating pads come in various shapes: shoulder pads, lower back pads and smaller sizes, that actually fit in your pocket. The liquid contained within comes in ten different eye-catching colors.

“The product is unique because we work from understanding what our customers want. In the beginning, the lower back pad was sold just as it is. And we were asked why don’t you have a pouch to put it in? So we made a fitted lower back pouch, which holds the heating pad tight around the lower body and enables the user free movement, as a permanent part of the product,” says Pascal.

The Full Body Set is the number one revenue-generating product, says Pascal. “The Full Body Set was designed to allow the sales reps as many options to close the sale as possible. It has the shoulder pad with pouch and the lower back pad with pouch. It is the simplest way to go. The sales rep can add any type of product to it based on what the client needs,” he says.

“We learned through time that each client will have a different ‘full body’ need and this way, the client can get what they want,” says Pascal. Additions include the palm-shaped heater, mainly used for arthritis and placed on the wrist; the heart-shaped pad, intended to be romantic; and the classic pad, similar to the pocket warmer, only triple the size, thus lasting triple the time, says Pascal.

Changing the rules of wholesale

In tandem with a hot product are the business strategies behind it. Helios Heater is able to offer retailers big discounts through The Group Shopper, an online group-buying site. “The idea is very simple. It is for retailers looking for greater profit margins. The Group Shopper gathers a group of retailers that come together and buy. They get ridiculous prices, similar to Groupon.com, but on a business-to-business model. The vendor is the wholesaler and the customer is the retailer. We had a huge success with Helios’ products and The Group Shopper last year,” says Pascal. Deals are available to any retailer who is a member; there is no fee for joining.

Retailers commit to the deal with a 30% deposit and then reap the rewards with a dramatic cut in cost, roughly 25-30%. “Basically, the client gets sourcing pricing,” says Pascal. For instance, a shoulder pad that would wholesale for $5 becomes $3 through the power of group buying.

Deals are offered the first day of every month and close on the last. Retailers can buy one or one thousand pieces. “At the end of the month, we close down and production starts,” he says. It takes approximately 45 days from the day the deal ends until the day the goods are shipped within the United States.

There are also “lightning deals” where an immediate delivery of goods is offered at group pricing. “This happens when a wholesale company wants to push products quickly or when one of the buyers cannot make final payment for his ordered shipment. The group can then offer these goods for all members to take advantage of,” says Pascal.

“The Group Shopper allows us to know for sure we are covered, as opposed to spending advertising dollars, where we aren’t quite sure what we will get with our dollars. Since we first advertised on The Group Shopper, our wholesale transactions are approximately 2,000-2,500% more than last year,” says Pascal.

Helios Heater also started offering flat rates from USPS as shipping options for products that otherwise would be quite expensive to ship via other shipping channels.

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The retail connection

Helios strives to assist retailers in any way they can. For those new to the specialty retail world, or even to Helios Heater products, this often means suggesting a retailer place a smaller order than initially planned. “We recommend start-up packages for beginners that start with the lowest amount of product they can get. You don’t want to spend a lot of money on something you don’t know about. There are companies in the market that ask for a deposit or a huge order in the beginning,” he says. But Helios is in this for the long term. “We think larger scale and want customers that are going to be happy,” says Pascal. “A happy customer raving on a blog about your product makes more money than anything else,” he adds.

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A retailer testing the waters can try the product for as little as $275, an experienced merchant might spend $2,000. Helios backs the product through a lifetime replacement guarantee, for both vendor and customer, as long as the vendor continues to work with them. “You can exchange items at the store, no questions asked, and who knows, maybe customers will pick up additional products while they are there,” says Pascal.

Demonstrations are an important part of sales. “You will see the numbers change if you demo,” says Pascal. Retailers can also play the Helios DVD at their unit—the DVD shows how the product works.

Some customers are amazed by the demo and purchase it simply to show their friends, says Pascal. “When they see it and feel it, that is the point of sale. They have to be impressed,” he says.

Others desire the heat for its instant pain relief. “In cold weather, athletes have a need for heat. It relaxes you, it soothes you. This makes a great gift,” says Pascal. He says that retailers need to figure out the customer’s specific needs—be it for the shoulder, or back or spot warmers.

“If a customer feels the pocket warmer and they immediately put it on their shoulders, retailers would know the shoulder pad is the way to go,” says Pascal.

the need is identified, getting the facts right about how the product works is critical, says Pascal. Worker training is important, he says.  Guidelines for specific sales scripts, including how to reuse the pads, are given. “It is a simple product to be trained on and sell because the product works the same way, whether it is for the shoulders or the back,” Pascal says.

Since the pads come in a variety of bright colors, Pascal recommends using display units with mirrors to play off the bright colors and attract passersby.

Retailers and associates can be trained on-site for a total of 3-5 days. Associates are trained not only on the specifics of the product but how to maximize sales, how to sell multiple products at one time and how to keep an open mind for your own innovative solutions, says Pascal.

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A step ahead

No doubt with a product this effective and with so much “Wow” in the telling, there is competition out there. “All companies are good,” says Pascal. “We look at the competitors in the market with respect. Some might do a better job in an area and that becomes our focus,” he says. And if that area is price, Helios reacts immediately. “If competitors offer products to retailers at a lower price, we will break it 5% while supplies last,” he says.

“The company you deal with is as important as the products you sell,” says Pascal. This philosophy combined with winning and effective products have brought Helios unparalleled success.