License to sell: the partners at Overbreak LLC, better at marketing innovation than incubating it, have made hits of toy concepts others have developed.

0ne of the hottest-selling items for kids this past holiday season was a Mylar, flying saucer-shaped balloon of sorts that doesn't float away when you toss it in the air, but sings like a Frisbee in slow motion.

The folks at Overbreak LLC didn't invent the HoverDisc, but they developed and marketed the product, along with the digi-draw tracing kit and Rainbow Art paint set. They're among the toys and novelty items that are handed over to the Sun Valley firm, which then puts them on the market, with a portion of sales paid back to the inventors as royalty fees.

"We are innovators of unique ideas," said Dayne Sieling, a co-founder and president of the firm. "Some of those ideas come to us on a cocktail napkin."

They started out introducing products at kiosks and carts set up inside roughly 400 shopping malls and similar high-traffic locales, rather than on shelf space at the major retailers. Later, they started advertising on television, fulfilling orders through mail order.

"You've got little Johnny and mom right there at the kiosk where they can see a product being demonstrated and brought to life," said Sieling. "It's about as grassroots as you can get. We call it 'in the trenches selling."'

Sieling, along with the husband and wife team of Arie and Ricky Aharon, launched the company in 1999. Sieling had worked as a toy and novelty distributor and the Aharons were clients.

In its first year, the trenches generated $3.5 million in revenues. Last year, they reached $31 million and the staff, which totaled three at inception, is now 65.

Scouring the globe

Through a combination of kiosk and the "As seen on TV" sales, Overbreak unloaded 4.2 million pieces of its three core products last year, 3.2 million of which were HoverDiscs. "We knew it would be popular, but we didn't know it would do as well as it did so quickly," said Sieling.

The HoverDisc, the creation of a gymnastics teacher in Nashville, retails for $14.95. Both digi-draw and Rainbow Art sell for $19.95 each.

The challenge in identifying the next hot seller is getting to the inventor before the big guys do. Sieling and Arie Aharon discovered Rainbow Art at a tiny toy show in what they'll only describe as "a very small town someplace in Europe."

"Put it this way, we've racked up a ton of frequent-flyer miles," said Sieling. "We go to all kinds of rinky-dink shows around the world and I'd say 90 percent of the time nothing comes of it. We scour the globe looking for ideas that no one else is paying attention to."

Overbreak also hires what it calls "spotters" to keep an eye out for potentially good ideas. One of its most recent discoveries hitting the market is fonefree, a cellular phone accessory that provides a wireless hands-free option by drawing power through FM radio transmitters instead of batteries.

Wider roll-out

The rise in revenues and employment has led Overbreak to expand its Sun Valley headquarters and its local distribution center, which handles roughly 15 percent of all sales. The company also has warehouses in four states, London and Hong Kong.

And having established a track record for its three biggest sellers, Overbreak has attracted the attention of big box retailers such as Wal-Mart and Toys R Us, which took on the digi-draw and Rainbow Art products about a year ago and more recently began selling the HoverDisc.

One of the first chains to sell the products was Pittsfield, Mass.-based KB Toys Inc., which, like the kiosk vendors, uses in-store demonstrators to attract customers.

The company waited until November to pick up the HoverDisc, but nevertheless, the toy represented a significant portion of KB's Christmas sales nationwide and will remain in stores through summer, according to Fred Hurley, vice president of merchandising for specialty items.

"I'd actually seen the HoverDisc ads on TV and heard it was doing extremely well in department stores across England," said Hurley. "Sell-through percents for us over Christmas were in the double digits, and we haven't even kicked off the demonstration market for that item yet."

The company is now trying to boost Overbreak as a brand that retailers will recognize and track. Same for the inventors, who, according to Sieling, are starting to come out of the woodwork.

"We're still going to be building up those frequent-flyer miles, but in the last year or so we've been getting more calls and e-mails from people who want us to help launch their ideas," said Sieling. "These guys are hearing about what we do and they're starting to come directly to us now."

PROFILE

Overbreak LLC

Year Founded: 1999

Employees in 2002: 22

Employees in 2003: 65

Revenues in 2002: $12 million

Revenues in 2003: $31 million

Goal: Grow revenues to $100 million by 2010

Driving Force: Inventors seeking funding and exposure

JACQUELINE FOX

San Fernando Valley Business Journal