Small company, big profit

Paul Carpenter runs Sinol USA, a small alternative-medicine company based in Newtown, Conn. Sinol sells a sinus spray to cure headaches and sinus infections.

Carpenter launched Sinol in 2005. He sold nearly $2 million worth of the spray in 2007 and has already surpassed that figure this year with the help of heavyweight distributors such as Rite Aid and Whole Foods. But Sinol has only two full-time employees: a bookkeeper and a receptionist.

How does Carpenter get the job done? By outsourcing most business functions to a network of partner firms scattered all over North America.

Manufacturing and warehousing happen in Hazleton, Pa. The spray is packaged in Oxford, Conn. The bottles come from a Canadian manufacturer. Carpenter contracts with sales representatives in New Jersey and California, and works with national trucking brokers to find the best rates for drivers. A San Diego business handles his order fulfillment, and a New Haven company manages shipping to individuals. Recently Sinol signed a deal with a marketing and consulting firm based in Washington, D.C.

Outsourcing certainly keeps Carpenter's overhead low but he admits that he's faced problems. For example, a recent shipment of 2,000 smudged labels gave him a headache that couldn't be cured with the sinus spray. But by choosing nearby partners that uphold high quality-control standards, he can usually correct errors as they arise (the labels were redone at the printer's expense). The rare pitfalls, he says, are far outweighed by the benefits of outsourcing.

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