The following article was first published in the December, 1954 issue of Science and Mechanics.
Starting with a bushel of old magazines and $250 for homemade experimental equipment, Ralph Chapman created a $100,000 industry, the largest of its kind west of the Great Lakes. Like most people with a new idea, Ralph was told the “days of golden opportunities” were gone and if it hadn’t been done before, it was obviously no good! But the idea of turning old magazines into cash was too good to stop, and Ralph Chapman didn’t discourage easily.
By keeping your eyes and ears open, you can make a business opportunity as Chapman did. First, he learned his market and discovered a need-either a new product or a new method which would lower the costs and benefit both consumers (with lower prices) and businesses (with increased sales). Even then he didn’t plunge right in. He experimented with low cost equipment until he was sure he could meet the competition and satisfy the need. Finally, he projected his experiments into full scale production. These are the A, B, Cs of setting up a manufacturing business the right way-and the rules apply as well to an opportunity you might discover.
Today, his own community with a population of 20,000 can’t begin to supply his factory with raw material-old magazines. The carloads and truckloads of waste paper that arrive at his Oregon plant come from such large cities as Portland, Seattle, and Spokane.
His company, Western Pulp Products, Inc. located on the outskirts of Corvallis, hums with activity, making decorative paper containers for florists to the tune of 6,000 every 8 hour day. All this has grown up in just two years from an original outlay of $250-plus an adroit use of common sense.
Ralph Chapman was always interested in ways to reclaim waste material and had manufactured hardboard products from waste forest material before starting Western Pulp. After a successful career in this field, he retired he retired in 1951 to experiment on other uses for waste products. On a trip to the east in 1949, he had noticed an abundance of paper floral containers in florists’ windows made by eastern manufacturers. “How much,” Chapman wondered, is it costing to ship these containers to the western states? Why isn’t there a plant to use waste paper on the West Coast, too?”
Left - An early paper repulper, de-linker and doctoring tank.
Right - a second-hand electric range for $15.
Retired and with time on his hands, Chapman began to find the answers to his own questions. First, he looked into the potential market in the western states for papier-mache flowerpots. The task of interviewing each retail florist in the states west of the Rockies would have been endless. A questionnaire could have been sent out, but Ralph knew most people consign questionnaires to the wastebasket unopened. On the other hand, there were ten main floral wholesalers who could speak pretty well for all the retail florists in the area. So Chapman asked them simply, “Do you sell paper floral containers to the florists in your territory?”
“Yes, but only a few,” a typical reply stated. “Florists tell us there’s a big demand for some type of floral container that’s low-priced. There are some inexpensive ones, but the freight is terrific on these light but bulky products. In fact 30% of the sales price is freight. Take a small order; say $10 for instance. This costs the florist an additional $3 to get it here from the east.
“There’s a potential market for 10,000 a day in this part of the country-providing, of course, transportation charges can be lowered to… well about 5 or 6%.
“The florists,” continued the wholesaler, have numerous occasions for low-priced flowerpots. Just think what inexpensive pots would mean to Mr. and Mrs. John Q. Citizen, and to the florists in increased sales.”
Ralph Chapman knew one way to reduce freight charges-build a plant in the west. Checking with local freight agencies he found that he could deliver his products to potential customers at 1/4 the freight rate florists had to pay on orders from the east.
The groundwork laid, he was ready to put money behind his ideas. Not much yet, just enough to set up a models experimental laboratory where he could work out a method to turn waster paper into profit.
On the outskirts of town, he found an abandoned building complete with railroad siding and a truck loading platform. He didn’t need these any more than he needed the 7,500 feet of floor space, but the rent was only $75 a month. The first purchase-materials for making a small repulper and combination de-linking and doctoring tank-cost about $200. There was no labor cost because Chapman built all the experimental apparatus himself.
A flexible rubber hose was attached to an old vacuum pump which had been rescued from a junk pile. The other end was attached to a wire mesh form (mold). The mold, at that time, was merely a wooden form with holes bored in it and completely covered with screen. With the vacuum pump in operation, the mold was set in the doctoring tank and a partial vacuum “sucked” a layer of pulp solution against the wire screen, forming a container. The vacuum pump was allowed to continue “sucking” after the form was lifted from the doctoring tank to speed the drying process. But this wasn’t fast enough.
The heart of the factory is a 32’ diameter wheel, made from various sizes of pipe and needing only one operator to turn out 1,000 pots an hour. Automatic arms dip different sizes and designs of inside forms in and out of a circular concrete trough filled with pulp. While the molds are submerged, a vacuum “sucks” the pulp against the form. The operator takes the pots as they are ejected and transfers them to drying trays.
By making floral paper containers on a modest scale, Chapman picked up many trade secrets. He learned what chemicals were best for emulsifying ink, how much water was required for washing pulp in the doctoring tank, which chemicals were best for waterproofing, what the vacuum pump capacity requirements were and how much compressed air was needed to eject the newly formed containers from the mold. These answers can’t be found in books. They can only be found as Chapman found them-by making a $250 investment in experimental equipment and lubricating it with midnight oil.
Now that Chapman had the answers, he considered it safe to go ahead with a $60,000 investment to expand the corner experimental laboratories to cover the entire 50 x 150-foot floor space in the same old, abandoned building. First, he purchased basic power tools-a big arc welder, machine lathe, power hacksaw, plumbing tools and woodworking tools. Next, he hired a crew who built every piece of equipment in the entire plant. And in the end, his records showed that it was more economical to start by building his own equipment rather than having it built for him by hired labor.
One reason for the factory’s success is Chapman’s “sixth” sense in finding waste materials that can be turned into cash. But the real key to his success is his knack for designing and building machinery that can speed production and lower labor costs.
Apparently, the potential market of 10,000 pots daily estimated by the wholesale florists two years ago is a reality. Western Pulp has never met difficulty in selling their entire output of 6,000 pots daily.
One large concern recently placed these containers on the market for domestic use. Until that time, Chapman had sold his products to the florists only. Now, if housewives and other consumers purchase this paper pots as readily as florists have, the potential market will increase by thousands per day.
Ralph Chapman turned his $250 investment into a $100,000 industry in 2 years by using waste material purchased through waste paper dealers. Here’s a clue for you the next time you get an idea to turn waste into profit. Test your idea against these criteria: (1) will it lower prices for people like you and me and (2) will your idea increase sales opportunities for people in business? If the answer is an honest yes to each question, you have a sure-fire product with a wide-open market. That was Ralph Chapman’s experience. END