Hi John,
How’s it going?
I think we last had oysters at the Brooklyn in Seattle about 15 years ago.
I have been working on my own company the last few years, still using your advice.
We are very small with all the normal small business struggles, but would not want to be doing anything else.
I look at your blog all the time.
I hope everything is well
Tim
tim,
Yes, all is well, and I remember you got the free ticket out of evergreen air, outdoing my expertise...
glad to hear from you! Cool item, are you working on "what is next" for your line...?
Can I blog your note and its reference to your product?
John
Hi John,
I’d forgotten about that. I think I met my wife on that trip. They should have charged me for that ticket….
We are working on the 2012 products, some ScreenDeck related, some still in thought phase. Some people worry about the meaning of life but I worry about #1, cashflow, and #2, new product ideas….
Sure you can blog this.
Thanks
Tim
Tim
5 comments:
John,
Thanks for posting this and thanks to Tim for sharing. I really dig the screen deck product. I see on your website that your product is offered at Fry's. I was curious whether you could share your thoughts on working with a big box retailer. Do they do small orders?
Thanks again!
-sash
Hi Sash,
Thanks!
Retail chains need quantity & sell thru. Poor sell thru = short & costly relationship.
Tim
Tim,
Thanks! I appreciate the reply. My understanding is that sell thru is the actual amount sold to the customer by the retailer. This is separate from the amount sold to the retailer by the manufacturer. If my definition is correct, then I'm not clear how a poor sell thru is costly to the manufacturer. I'm basing this on the model where the manufacturer orders from the supplier only when they have enough orders to cover the supplier's minimum. Is this approach not feasible when working with a bigger retail chain? Does the manufacturer have to purchase products in advance and warehouse it before potential re-orders? Thanks again for your input.
-sash
Hi Sash,
You are correct about sell thru.
In most situations, the importer would need to have some stock of product in country to fulfill reorders quickly. A chain will expect replenishment within a week or two normally, so the importer need to be able to do that in that time frame. So yes, in most situations you have to warehouse something.
By "costly relationship", I was referring to all the peripheral costs related to shipping a product that is selling slowly. This can range per unit shipping charges to potential marketing fees and ad charges that might be required by the chain (if you sell 1000 a month they are insignificant, if you sell 10 a month they make they cost you)
Tim
An aspect of this discussion I'd like you to to consider is the infrastructure required to serve these large businesses.
We have this idea that our businesses are like snakes that can swallow a pig. The pig will be a bulge moving through the snake and in the end the smake will be bigger and stronger. Not so. Out businesses are more like a steel tube, that can handle only so much capacity.
To push a pig down the tube, the diameter has to be big enough. If our regular business is a trickle, we need only a small tube for now. But if we have a big tube (infrastructure: warehouse, personnel, finance ability) we are rather obliged, at any cost, to get pigs to push through, regardless of the cost. We become overhead-driven entrepreneurs.
I understand we can farm out logistics to 3PL, but we cannot farm out the time, care, concern we have attending to a large order that is necessarily out of the routine. Our trickle will suffer as we attend to the pig, when we ought to be attending to growing the trickle.
Logistics is the art of moving goods and services through time and space and usually gets down to eliminating bottlenecks, first the biggest, then the next biggest, and so on. Taking such a pig order is to take on a bottleneck!
Further, we are up against people who can act in absolutely the reverse. They have a huge tube, with occasional excess capacity, the reverse of a bottleneck. We all can see from trade data peaks and valleys in production and distribution of any given item. What?! We see excess shipping capacity in late june? Why, take our mega-store buying power, target underutilized and thus cheaper Christmas Ornament production, move it essentially for free given the underutilization of shipping capacity and free money compliments of US taxpayers, and fill that void AND make money.
For us, this is like kids playing on the freeway... we ought not be there.
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