Judi Henderson-Townsend explains how she tapped into technology in order to grow her fledgling used mannequin business into a smart and savvy enterprise.

By: MATT ALDERTON

Most folks work with people. Their co-workers eat, breathe and, if they're lucky, sleep. Not Judi Henderson-Townsend. Made of fiberglass and plastic, her co-workers spend their days posing and posturing. That's because they're not people; they're mannequins.

Henderson-Townsend founded Mannequin Madness, her used mannequin business, in 2001. Based in Oakland, Calif., it wasn't a planned venture. Instead, it was a whim. Working full-time for a dot-com in the San Francisco Bay area, she was surrounded daily by serial entrepreneurs and wanted badly to join their ranks. She'd had a business 15 years earlier, after all, and had loved it; it failed, though, and she was scared to enter the small business ring for a second round. Still, when the opportunity for entrepreneurship presented itself, Henderson-Townsend pounced.

"One day, I was surfing on Craigslist," she says. "A guy was selling a mannequin—I was going to buy a mannequin for an art project I wanted to do—and when I realized that he was leaving the state, and that there wasn't going to be a place to rent mannequins in the Bay area, I bought his entire inventory. I had a week to make my decision; if I'd had too much time to think about it, I probably would have talked myself out of doing it."

Suddenly, immediately, Henderson-Townsend was a business owner again. She was also a fish out of water, though. "I had never touched a mannequin before," she says, "and I had never worked in retail."

While Henderson-Townsend lacked industry experience, connections and know-how, she had plenty of what others in her field lacked—tech savvy—and she used it to build a thriving business, one arm, leg and torso at a time.

Mannequins, Mannequins, Everywhere
In its earliest days, Mannequin Madness was a part-time, home-based operation. That means that Henderson-Townsend's home, including her basement, her garage and, eventually, her backyard, doubled as a mannequin warehouse. She started with 50 mannequins, and then, within a very short period of time, she was suddenly swimming in 500.

After Sept. 11, when her dot-com employer folded, Henderson-Townsend took her walking papers home and began focusing full-time and full-force on Mannequin Madness. She formed strategic partnerships with department stores, which started out as her customers and quickly evolved into her suppliers, as well.

Retailers were an obvious market, though. In order to take her business to new heights, Henderson-Townsend needed a fresh idea. And she found it online.

"Many people who ran this type of business before were coming from the artistic standpoint and didn't have Internet savvy," she says. "Because I worked at a dot-com, though, I knew how to apply my online marketing skills. So we were one of the early adopters, in terms of used mannequin vendors, to have a strong online presence, and right off the bat we started reaching customers I never would have thought about marketing to, just because of the power of having an Internet presence."

Thanks to her Web site, Henderson-Townsend quickly discovered new markets who were interested in buying or renting her mannequins, including event planners, who wanted them for decoration; trade show attendees, who needed them to display their products; artists, who transformed them into props; and even lawyers, who planned to use them as models in court. Thanks to the Web, Henderson-Townsend didn't have to find these customers; they found her.

From Stitches to Glitches

Despite her success, Henderson-Townsend has encountered many challenges in the maintenance and growth of her business. Of course, she's used technology to overcome them all.

For instance, a sole proprietor with just one part-time employee, she has opened mannequin outposts in San Diego, Las Vegas and New York, and faces frequent hurdles in communicating with and managing the independent contractors she's hired to run them. Her solution? A free online meeting system, which Henderson-Townsend uses to contact and collaborate with her remote team.

Perhaps her greatest challenge, however, has been inventory. "We don't have the luxury of ordering product when we need it," Henderson-Townsend says. "We have to order it when it becomes available."

Because the company typically must buy inventory quickly and en masse, it is often drowning in mannequins, which are large and hard to store. More than that, though, because it has inventory all over the country, in multiple sales channels, and of varying quality, condition and value, it simply gets hard to keep track of things.

In an attempt to wrap her arms around her inventory problems, Henderson-Townsend went in search of software. What she found, however, was discouraging. Companies had designed inventory management systems robust enough for her needs, but they were intended for large companies. Systems geared for small businesses, meanwhile, proved weak and inflexible. "We have big business needs, but we have a small business budget," she says.

The Cutting Edge

In January 2006, Henderson-Townsend found the answer to her problems when she was awarded a $100,000 technology grant from Intel. With that money, she hoped to invest in a radio-frequency identification (RFID) system for her business, which would help her organize and catalog her enormous inventory. Even with $100,000 to invest in technology for her company, though, Henderson-Townsend ran into roadblocks. The solution she was looking for—an enterprise management system that supported RFID and integrated all of her inventory, CRM, accounting and fulfillment activities—didn't exist. She needed customized solutions.

"Even having a huge technology grant," she says, "I find that small business owners really don't have the luxury of being able to be early adopters of new technology."

Still, by a stroke of luck, Mannequin Madness found a vendor willing to build the technology it needed; its beta test is being released in December 2007.

How to Turn Techie

Of course, you don't need a $100,000 grant and a fancy inventory management system in order to make technology work for your business. A little goes a really long way, according to Henderson-Townsend. Consider her quick tips for turning your company into a tech-savvy enterprise: