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`Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands - NYTi...
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`http://www.nytimes.com/2013/09/01/business/rainbow-looms-success-f...
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`Rainbow Loom’s Success, From 2,000 Pounds of
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`Jeff Kowalsky for The New York Times
`Cheong Choon Ng, above, designed Rainbow Loom, a suddenly popular crafts kit that turns rubber bands into
`bracelets.
`By CLAIRE MARTIN
`Published: August 31, 2013
`
`LAST weekend in Fair Harbor, N.Y., on Fire Island, a few dozen
`children gathered on the boardwalk for the local tradition of selling
`lemonade, baked goods and painted seashells to passers-by at sunset.
`Among the children was Julia Colen, a 12-year-old vacationer from
`New Jersey, who in addition to hawking cupcakes and drinks was
`presiding over a stand overflowing with brightly colored bracelets.
`Julia and a friend had made the jewelry out of tiny rubber bands,
`using a crafts kit called Rainbow Loom.
`
`Enlarge This Image
`
`“We had a lot, at least 100,” Julia
`estimated of their inventory, which
`they priced at $1 to $2 apiece. Sales
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`Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands - NYTi...
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`http://www.nytimes.com/2013/09/01/business/rainbow-looms-success-f...
`
`were impressive that night — “we
`made like $68,” she said.
`
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`based on what you‘ve read.
`
`Julia is among hundreds of thousands
`of youngsters — and parents — in the
`United States who are using Rainbow
`Loom. The kit consists of two plastic
`template boards, a hook, 24 plastic
`clips and 600 multicolored mini
`rubber bands. From it, 24 bracelets
`can be woven into patterns similar to those traditionally
`used in lanyards and friendship bracelets, but more
`complex and colorful.
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`Jeff Kowalsky for The New York
`Times
`Mr. Ng's daughter Michelle, 12,
`worked on a project.
`
`Enlarge This Image
`
`Rainbow Loom is the invention of Cheong Choon Ng , a
`Malaysian immigrant of Chinese descent with a graduate
`degree in mechanical engineering. He came up with the
`idea in 2010 and began selling the kit while employed as a
`crash-test engineer for Nissan.
`
`In the past year, Rainbow Loom’s popularity has soared,
`spurring hundreds of YouTube fan videos and scores of
`so-called kidpreneurs like Julia. Now Mr. Ng is overseeing
`a rapidly growing company that he started from his living
`room in Novi, Mich.
`
`Rainbow Loom began as Mr. Ng’s attempt to impress his
`two daughters, Teresa, now 15, and Michelle, now 12. One
`afternoon, the girls were making bracelets out of small
`rubber bands, and when Mr. Ng tried to join in, he found
`that his fingers were too big. He went to work creating a
`wooden board with push pins, which helped improve his
`dexterity but was too bulky to win his daughters’ approval.
`
`Jeff Kowalsky for The New York
`Times
`The key to selling the kits, it turned
`out, was educating buyers about
`how to use them.
`
`Mr. Ng persisted, adding rows of pins. “I was putting pins
`on two and three and four rows, crisscrossing the rubber bands and making big bracelets,”
`he said. Finally, the girls were hooked, and they began to use the board to make gifts for
`friends and neighbors.
`
`IT was Teresa who later suggested that her dad try to manufacture and sell the loom. His
`engineering background, which includes product design, quality control and
`manufacturing experience, provided a solid foundation for the project, and his brother,
`Cheong Yeow Ng, an engineer and inventor living in Wichita, Kan., encouraged him to sell
`the product online.
`
`As with many new ventures, the first challenge was financial. “All we had saved to invest
`was $10,000,” Mr. Ng said.
`
`When he found that his budget was too small for American manufacturers, he began
`vetting some in China. He sank $5,000 into the molding for the template and the other
`$5,000 into the kit’s parts.
`
`A shipment of 2,000 pounds of rubber bands arrived at the family’s home in the summer
`of 2011. Mr. Ng assembled kits after arriving home from the office at night; his wife, Tyng
`Fen Chan, worked on them during the day.
`
`They had limited success selling Rainbow Loom online, and their early attempts at placing
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`Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands - NYTi...
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`http://www.nytimes.com/2013/09/01/business/rainbow-looms-success-f...
`
`it in major toy stores fell flat. Part of the problem was that people didn’t know what to
`make of the newfangled toy. To educate potential customers, Mr. Ng and his daughters
`posted instructional videos on YouTube, and he bought Google ads to help spread the
`word.
`
`In the summer of 2012, Mr. Ng’s luck changed. The owner of a Learning Express Toys
`store, a chain of 130 franchises, placed an order for 24 looms, and, two days later, she
`called to reorder. Soon, other Learning Express Toys stores were clamoring for Rainbow
`Looms. The key to selling the kits, it turned out, was educating buyers about how to use
`them. Specialty toy and craft stores were just the place for loom demonstrations and
`classes.
`
`For Gary and Molly Fitzpatrick, who own two Learning Express Toys stores in Ohio and
`one in Michigan, the Rainbow Loom has been a boon for their franchises. “It’s a
`substantial portion of our business right now,” Mr. Fitzpatrick said. The kit is listed as one
`of the top toys of the summer of 2013 on the chain’s Web site.
`
`The Ngs initially called on friends and neighbors to help assemble the product, but now
`that work is done in China. Mr. Ng, who left his job at Nissan last fall, manages a staff of 12
`and rents a 7,500-square-foot warehouse near his home to handle distribution. In all, 600
`retailers carry Rainbow Loom, and just over one million units have been sold at a retail
`price of $15 to $17 each.
`
`The most popular state for sales is New Jersey, according to Mr. Ng. Jennifer Grisafi of
`Montclair said that her local swimming club was a hotbed of Rainbow Loom activity all
`summer and that her 7-year-old son now prefers making bracelets to playing video games.
`“He loves doing technical stuff with his fingers,” Ms. Grisafi said. “It’s exciting to see how
`creative he can be.”
`
`Summer camps, many of which prohibit electronics, are another place where the Rainbow
`Loom thrived. And beyond selling bracelets instead of lemonade, children have been
`busily posting how-to videos online. One YouTube user named Ashley has uploaded four
`such videos; the most popular, in which she explains how to make what she calls “a
`starburst bracelet,” has attracted around 450,000 views since Aug. 1. The official Rainbow
`Loom videos have garnered a total of 4.6 million views.
`
`But like any new product in a competitive market, the Rainbow Loom faces challenges,
`including the tendency of children’s toys to fade in popularity. To keep his brand relevant,
`Mr. Ng is focusing on innovation.
`
`“I am working on new tools to make more exciting rubber bands and more bracelet
`patterns,” he said. “I’m also expanding into designing accessories.”
`
`Rainbow Loom has drawn comparisons to Silly Bandz, the springy rubber bands that were
`ubiquitous on children’s wrists several years ago. That company’s founder has branched
`out into watches and other types of jewelry and has formed partnerships with brands like
`Angry Birds and Barbie for themed bracelets.
`
`IF Rainbow Loom attracts imitators, the key to keeping them at bay is having “a secret
`sauce” that no one else can replicate, according to Bill Aulet, managing director of the
`Martin Trust Center for M.I.T. Entrepreneurship and a senior lecturer at the M.I.T. Sloan
`School of Management. Rainbow Loom’s community of enthusiasts could be just that
`sauce.
`
`“If there’s a whole ecosystem around this product, and it becomes very profitable, then
`someone would very likely come in and buy it,” Mr. Aulet said of Mr. Ng’s company.
`
`3 of 4
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`Rainbow Loom’s Success, From 2,000 Pounds of Rubber Bands - NYTi...
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`http://www.nytimes.com/2013/09/01/business/rainbow-looms-success-f...
`
`Aside from that possibility, Mr. Aulet said he believes that outside help will be required to
`expand the business.
`
`“He’ll need muscle of some sort,” Mr. Aulet said. “He’ll need a stronger team, more money,
`more expertise, partnerships. The complexity goes up exponentially as he starts to go
`national. It’s a whole new game.”
`
`A version of this article appears in print on September 1, 2013, on page BU3 of the New York edition with the
`headline: 2,000 Pounds of Rubber Bands, and One Big Success.
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`Rainbow Loom's creator weaves success from playtime inspiration | Crain...
`
`http://www.crainsdetroit.com/article/20131215/NEWS/312159956/rainb...
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`Topics in this article: Nonauto Manufacturing Entrepreneurship Retail
`
`
`
`Innovation
`
`Originally Published: December 15, 2013 8:00 AM Modified: December 15, 2013 8:32 AM
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`66
`
`Two years after going into business, Rainbow Loom
`inventor Cheong Choon Ng was nearing the
`millionth sale of his plastic-pronged device for
`weaving colorful rubber band bracelets.
`
`The $16.99 kits were flying off the shelves of
`Learning Express toy stores, and the former
`Nissan crash safety engineer had an exclusive deal
`with Michaels Stores Inc.
`
`The retail craft giant started carrying the looms and
`hooks in its 1,125 stores the first week of August.
`Rainbow Loom sales skyrocketed for Ng, the owner
`of Wixom-based Choon's Design LLC.
`
`Ng, 45, has moved 3.5
`million units this year as the
`craze to make jewelry,
`headbands, key chains and
`even superheroes out of tiny
`rubber bands sweeps the
`tween market.
`
`Cheong Choon Ng
`
`Ng's product got on Michaels'
`radar after it received a Craft
`and Hobby Association Innovation Award. The
`company's "trend team" saw winner all over it, too,
`according to Philo Pappas, executive vice president
`of category management.
`
`"The Rainbow Loom is selling 10 times better than
`Michaels' previous best-selling kids products,"
`Pappas said in an email.
`
`School by school and state by state, the Rainbow
`Loom finds enthusiastic new fans in 6- to
`13-year-olds. For the most part, parents don't mind.
`
`1 of 6
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`Rainbow Loom's creator weaves success from playtime inspiration | Crain...
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`http://www.crainsdetroit.com/article/20131215/NEWS/312159956/rainb...
`
`Their children put down their electronic devices.
`They loom alone and with friends. They use their
`imaginations to design new patterns. They use their
`creations as gifts, fundraisers for charities and to
`make a little side money. Kid entrepreneurs take
`and fill orders for color combinations that match
`friends' outfits and team uniforms.
`
`CATHERINE KAVANAUGH/PLASTICS NEWS
`Rainbow Looms, from Wixom-based Choon's Design,
`are flying off shelves, moving 3.5 million units this
`year as the craze sweeps the tween market.
`
`"It's so wild. Rainbow Loom is a household name,"
`Ng said in an interview at his lived-in office in a
`small warehouse. "I am still waking up every morning and asking myself and telling myself at the same time:
`Is this for real? This is real. This is a dream come true."
`
`A futon with a blanket is next to his desk, which is covered with food wrappers, paperwork and a computer
`warbling the next incoming Skype call from a business associate. Ng is busy. He expects revenue to top $30
`million this year, and he is looking ahead. For 2014, he plans to release a travel-size Rainbow Loom, a deluxe
`kit and accessory organizers to stay ahead of the copycats flooding the big-box stores.
`
`Ng also designed the Wonder Loom and licensed it to The Beadery, Hope Valley, R.I., and Toner Plastics,
`Agawam, Maine, for a made-in-the-USA version of his hit product. Wal-Mart Stores Inc. sells the Wonder
`Loom for $12.88 in its craft department. The two East Coast plastics companies are making about 150,000
`units a week for the biggest U.S. retailer. Ng gets royalties.
`
`Not bad for a dad who at first simply wanted to join his daughters in an evening activity at their home in
`Novi back in 2010.
`
`Engineering an idea
`
`Teresa and Michelle Ng, then 12 and 9, respectively, were twisting and linking the little rubber bands used to
`tie ponytails into bracelets. Ng recalled doing the same thing as a Chinese boy growing up in Malaysia with
`larger rubber bands to make jump ropes.
`
`Ng sat down with his girls to impress them with his skills, but his fingers were too big to weave bands barely
`a half-inch in diameter.
`
`Engineer instincts kicked in. He got a piece of wood from the basement, arranged some pushpins on it, and
`used a dental plaque remover like a crochet hook to make a single-chain bracelet.
`
`"When I showed it to my daughters, they weren't so excited about it," Ng said. "I tried again with more
`pushpins in multiple rows. It turned out really nice. It was a diamond-shaped pattern and they said, 'Oh my
`gosh, we have never seen one like it.' They wanted to have one, they wanted to know how to make them,
`and they wanted to show their friends."
`
`The Rainbow Loom put a new twist on the basic chain the girls had learned from their mother, Tyng Fen
`Chan, who grew up in the same small town as Ng. They showed their neighbors and friends; everyone had
`the same reaction: Make me one, teach me to do it.
`
`"Everybody got excited," Ng said. "I thought, wow, this could be something big if I'm able to sell it as a
`product."
`
`First, he had to sell his wife on the idea of using their savings — $10,000 in a college fund for the girls — to
`get started.
`
`Ng worked nights for six months, coming up with 28 iterations of the loom.
`
`When he felt he got it right, Ng slipped a loomed rubber band ring on Chan's finger. A few hours later, she
`was on board.
`
`"She told me she thought it would work," he said. "That marked a big change. We were on a new journey.
`She is my wife, my most important partner, and having her agree was the most important thing."
`
`2 of 6
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`Rainbow Loom's creator weaves success from playtime inspiration | Crain...
`
`http://www.crainsdetroit.com/article/20131215/NEWS/312159956/rainb...
`
`Looming success
`
`Ng budgeted $5,000 for tooling and $5,000 for parts.
`He checked out U.S. manufacturers, but he said he
`couldn't afford even the lowest quote of $12,000 for
`tooling alone, and most prices were in the $20,000
`range.
`
`"I turned to overseas, to China, the south area that
`neighbors Hong Kong," he said. "They have already
`been making most of the toys in the world."
`
`Ng said he studied some 15 suppliers about materials, where they got the metal for their tooling, their
`molding processes and their quality control to ensure the looms would be made from a durable, safe plastic.
`
`"The volume wasn't an issue because with the tooling you can usually make 300,000 units," he said. "My
`purchase was 10,000 units, which is really, really small. This was nothing to them. Obviously, I wasn't a
`center-stage customer. But that's different now."
`
`Ng and his daughters visited stores and kiosks at the mall in search of outlets. They were told to contact
`corporate offices but got nowhere. Ng made YouTube videos to demonstrate how the loom works in an
`attempt to spur online sales. That was in July 2011.
`
`Sales were sporadic until a year later when Ng got some bites from independent toy stores. A sales rep for
`Learning Express inquired about the new craft and placed an order for 24 kits and some rubber bands for the
`store in Alpharetta, Ga.
`
`"We shipped it quickly and a day or two after they received it they told me they sold out of everything," Ng
`said. "I said 'Really? How many more do you need?' They said, 'How about 48?' So we sent them 48, and the
`next day they called and said, 'We need more.' They ordered $10,000 worth. I was so happy, but pressured.
`It would take days to assemble that many."
`
`The Ngs had been filling orders out of their house by themselves. They recruited friends and neighbors to
`help them keep up with demand. In fall 2012, Ng left Nissan to focus on his growing business.
`
`More Learning Express stores picked up the product, and its popularity spread to North Carolina, then
`Florida, Pennsylvania, New Jersey, New York and Massachusetts.
`
`The Rainbow Loom is in 2,100 stores and shows up as No. 2 best seller in the toys and games category of
`Amazon.com. The product was featured by talk show host Ellen DeGeneres and a celebrity gossip outlet
`recently revealed Gwyneth Paltrow's son wants one for Christmas.
`
`"Kelly Ripa wore a bracelet, and David Beckham, too," Ng said. "It's crazy."
`
`Two girls who go by Ashley Steph also have gotten 6.1 million YouTube hits in just over three months for a
`tutorial on how to make a starburst pattern. A half million of the hits came between Nov. 19 and 24.
`
`"It's still catching on in the United States and I think it will be everywhere," Ng said. "I think it's more than a
`fad. I think it's a craft. I've seen seven books showing people to make Rainbow Loom jewelry."
`
`Crafters have moved way beyond bracelets. Ng follows their artistic endeavors on Facebook. He scrolls down
`a screen of postings showing handbags, charms, figures of Tinker Bell and The Grinch, and a flag of the
`Philippines. Some kids even went as Rainbow Looms for Halloween in home-made costumes.
`
`"Our family is very humbled by this experience," Ng said.
`
`Made in America
`
`However, Ng said he was bothered by his early inability to manufacture the Rainbow Loom in the United
`States and the contract obligation to turn down requests from other national retailers. So he returned to the
`drawing board and found a way to do both.
`
`3 of 6
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`Rainbow Loom's creator weaves success from playtime inspiration | Crain...
`
`http://www.crainsdetroit.com/article/20131215/NEWS/312159956/rainb...
`
`Ng designed another product called Wonder Loom and licensed it to The Beadery and Toner Plastics. Steve
`Graham, co-owner of both businesses, said The Beadery supplied craft materials to Wal-Mart but had so
`much excess capacity it was only two weeks from closing until he bought it in bankruptcy in February.
`
`Graham looked for a new product for the estimated 30 employees to make. At the same time, Wal-Mart was
`in search of a loom to carry and Ng was trying to hook up with a U.S. manufacturer.
`
`"It all came together in a flash," Graham said. "Choon and I started out talking on the phone. He told me
`he's seen all the bad that has resulted from the decline of manufacturing in Detroit. He said it would make
`him very, very proud to produce a product in the U.S. I told him we have a relationship with Wal-Mart and
`they're interested. If you want to get together, let's do it."
`
`The two businessmen met with Wal-Mart officials at the corporate headquarters in Arkansas in August — a
`day after the retailer held a widely publicized manufacturing summit in Florida to build on its commitment to
`buy $50 billion more of products made, sourced or grown in the United States.
`
`"Again, the timing was just perfect," Graham said. "Everybody had a real sincere interest to make stuff in the
`USA. The other critical factor was that time was of the essence to have a product ready for Black Friday. It
`was an extreme challenge but we have great people at The Beadery. Everybody ramped up in a matter of
`weeks and the presses started pumping out product."
`
`Six lines go 24/7 molding Wonder Looms, which hit about 3,700 Wal-Mart stores on Nov. 8, Graham said.
`Even the rubber bands in the kits are made in America. He is meeting shipping requests of 150,000 units a
`week and hopeful about the implications for other U.S. businesses.
`
`"As a small plastics manufacturer, it was important for us to show a company like Wal-Mart that given the
`opportunity, we can put product physically on the store shelf in eight weeks, which is an incredible
`turnaround," Graham said.
`
`"We're shipping significant numbers of units every week, and I think this demonstrates to a company like
`Wal-Mart that we can compete. They don't need to go to China. We're doing it at a competitive price and
`fast, if not faster, and they don't have that inventory issue. They can call us in the morning and say we need
`30,000 units and that gives them a strategic advantage. Everybody else who is buying from China is done.
`They can't get anything in for Christmas. You can't even fly it in and get it in time because Samsung and
`Apple have all the planes tied up."
`
`Graham said the last three months have been a blur of making molds, lining up vacuum-formed trays, boxes
`and labels, and shipping product.
`
`"The rate of sales right now is extreme," he said. "There are probably 100 people working on this that
`weren't working in September."
`
`However, Ng bristles a bit at the fact that Wonder Loom is in Wal-Mart's craft department while a copycat
`from China is in the toy department. The front page of his website has a "special alert" warning consumers
`about counterfeits being "unsafe." Ng said most are made of cheaper polystyrene that forms a sharp point
`when broken.
`
`He also has some lawsuits pending over a rival kit sold at Toys R Us as well as the C-shaped fasteners that
`hold the bracelets together.
`
`Ng has a lot of legal and business issues to weave into his days. When pressures mount, sometimes he pulls
`out a Rainbow Loom or Wonder Loom.
`
`"It's relaxing," he said. "Once you get the hang of it, you flow with it. There were days when it was hectic for
`me at Nissan. I'd come home and make a bracelet to clear my mind. I think it's good in many ways."
`
`From Plastics News
`
`Topics in this article: Nonauto Manufacturing Entrepreneurship Retail
`
`
`
`Innovation
`
`4 of 6
`
`12/16/2013 3:03 PM
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`

`
`Rainbow Loom's creator weaves success from playtime inspiration | Crain...
`
`http://www.crainsdetroit.com/article/20131215/NEWS/312159956/rainb...
`
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`66
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