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April 2011

BNBT update - for sale!

After my wonderings (why so many seem to be so eager to get a foot in the door at large retailers) of the last two weeks on Britain's Next Big Thing, an update on various contributors to the program.

Although there is economy in large numbers (sold through big retailers), never forget the "economy of profit in smaller numbers"

Beeble

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Straight from the designer's own online website, and priced according his own expressed wishes during BNBT #3 (normally £ 200.00 - now with 25% off, but with the profit in smaller numbers).

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Hula for sale at Habitat

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"Habitat Hula" at a price of £ 230.00 (where Laura sold her original Hula direct to her clients for £ 300.00)

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No online shop available to buy direct from Laura Wellington

SunSnoozer

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For sale online. all 1500 of them! Through Baby Beamers own online shop, Jojo Maman Bebe and.... Amazon.co.uk for £ 24.99 (ex P&P)
(SunSnoozer not to be confused with the black SnoozeShade from another mum + designer)

It's not the price that's always more important

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Always love to see these statistics on Amazon.co.uk - puts paid to the myth that everyone always makes their buying decision based on price alone.

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Frog BracKit

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For sale on Debbie Evershed's own Frog BracKit website
(which home page "jumps" all over the place and is missing various very basic SEO items, such as page titles - not a great advertisement for the web designer The Design Complex, who shows the Frog BracKit as their Featured design, oh dear. For the webshop itself I would have chosen the free version of Ecwid, not the Shopify "pay-when-you-sell" program - but that's for another post, not here - UPDATE 03.05.11: someone's been paying attention, pages on Frog BacKit now all have names ;-))

Prices and kits

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Price for the Frog BracKit £ 18.00 (frog shaped bracket only), the various kits containing the bars and hooks start from £ 18.59 to £ 34.54

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At Habitat (confused!)

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The Frog Kit is for sale in the Habitat online shop, but rather confusingly the bars and hooks can't seem to be found straight from the essential product.
(Originally found the Frog Kit through Google, can't figure out in which category in the habitat online shop it is listed - they don't seem to be using simple "bread-crumbs", just major categories)
Tried a product search on Frog It to see if the bar and hook kits were listed somewhere else only to find this result:

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Frog Bracket or Frog BracKit gives the same 0 result.
Then I tried "Frog" and up they came:

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Not a very user friendly experience I must say. It's like hiding the "latest product with a buzz" deep at the back of the store.

Frog itself, cheaper than on The Frog BracKit site, but combining the sets of same length bars makes any ready packed kit still cheaper IMHO. (the lengths above do not actually read 141.5 cm but l (as in length) 41.5 cm)

Tracy Wood Products

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Now, that's a great sight for sore eyes ;-)
No wonder Tracy tweets:

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Although, her website could do with some better SEO too - again the page titles are missing, what's so difficult for a web designer - Vosweb - to do this little simple thingy?

Conclusion

The three big retailers are attractive for suppliers/designers to sell (hoping to sell) larger numbers of their products. BNBT gives them a higher profile, and I sincerely hope their own websites and online selling takes off or improves as a result. My fear with new buzz products is always: how long are they the Next Big Thing at these big retailers? And then what?

The websites I've seen today could all do with improvement though - even the Habitat one, but that's not my objective - from the most simple SEO Meta tags to simpler and cheaper shopping carts.
Upwards and onwards with my guide, it's great fun and exciting at the same time bringing 4 free (plus 1 "pay-when-you-sell") online software programs together to help small businesses with the "economy of profit in smaller numbers".


BNBT #3, Habitat - shocking maths

Watched Britain's Next Big Thing episode 3 last night, designers trying to get a foot in the door at Habitat (150 outlets). For starters, if anyone still dares to say Britain does not have designing talent any longer, they better start watching this program. From frog-brackets (Debbie Evershed, selling them already at markets - through to the next stage) to modular seating (not gone through).

The eagerness

What made me shake my head various times during the program is - as mentioned last week - the eagerness some display to get that foot in the door with one of the big retailers, no matter what the costs!

One candidate who was introduced last week, pitching her sunsnoozer to Boots buying team, has gone through the next stage of discussions with the health and beauty retailer but nothing definite yet. Still, Brigitte Lydum as gone ahead and ordered 1500 units of her Sunsnoozer from her Srilankan manufacturer (that's a lot of boxes stored in her living room, as you can see during episode 3).

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It's down to Mr Retail himself Theo Paphitis to tell her to start thinking about how she's planning to sell the 1500 units if Boots decides not to take it on now - the sunsnoozer being a seasonal product, no much sun in Winter. A personal loan she took out for the order is at stake if she doesn't start asking Boots what their real and short term plans are. Being asked the samples is all she heard lately, not even a date of when the next discussion will take place based on the samples sent.

The maths

Beside the "I am in the next stage, so I'll just wait for things to happen" there are the maths.

Steven Bidduph pitched his Beeble footstool at the open day of Habitat. During his pitch he mentioned the retail price he had in mind the outlets would charge for his product - around £199.00 and him selling his footstool to Habitat for around £ 85.00.
This was immediately waved away by the buyers: we have to sell this under £ 100.00 so that means a purchase price lower than £ 30.00

Holey smoke! Supposing the £ 100.00 is including VAT (£ 83.34 ex) it is still lower than the purchase price the designer had in mind. I can imagine the overheads of a big retailer being quite large, but a mark up of 177% is jaw dropping. But again, a very delighted designer - he's gone through the next round and is already hard at work of getting his product price to the level habitat is expecting of him.

Simple maths now. There is of course economy in large numbers, but still. Steven still has to make his own profit. Suppose he manages to bring the purchase price for habitat down to £ 29.00 and habitat sells it for £ 99.00 (£ 82.50 ex VAT). Habitat's gross profit £ 53.50 per Beeble, Steven's profit per Beeble? Sincerely hope for him he makes at least a fiver out of it or perhaps even a tenner. Let's, for simplicity sake, make it £ 7.50 gross profit for him per Beeble. So he has to hope habitat sells all lot of Beebles. It will take at least 7 of them for Steven to make roughly the same money (gross) Habitat does on one.

What if he would sell the Beebles on his own? Retail price £ 95.00, on a higher production price (lower numbers in production) of £ 35.00. That would make his gross profit around £ 44.00 per Beeble. Meaning, he only has to sell 2 to reach the same gross profit he would have if Habitat managed to sell 7.
Another designer at Habitat's open day also got through to the next stage with her Hula lamps, but on the condition she will stop sell her products (charging £ 300.00 a piece) herself and grand habitat exclusivity on them - while they plan to sell them at a much lower price, more in line with other lighting articles they already carry.

The Long Tail

Getting through to the next stage during the open days at the big retailers in this program means a few things, one extremely important:
if big retailers can see there's a market for your design, product - so should you. Proof is in the pudding with the frog-bracket, Tracy Woods Eczema ointment and even the Hula's

Many other hopefuls fell at the first round, they didn't. I just can't get my head around the fact that especially now with more and more evidence of Long Tail commercial viable products - read "profitable in smaller numbers", it's still the big retailers many turn to instead of doing some simple maths and "going-it-alone". To me it's a no-brainer

Selling Online Basics (SO-basic)

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Since the second episode of BNBT I've been steaming ahead with my new E-guide: Selling Online Basics and it is progressing nicely. The more I see of BNBT, the more I'm convinced it is the basic online knowledge - absolutely not hard to learn - many are missing to take the step to "go-it-alone" with their products.
Give it another week or so and my guide will be ready. 

UPDATE 19.05.11: "Selling Online Basics" officially launched!


To retail or ecommerce

BBC has a new "business" program: Britain's Next Big Thing - launched last week. MR RETAIL himself, Theo Paphitis follows a group of small businesses, some working from their own kitchen or workshop, when they try to have their products accepted on the shelves of 3 big retailers: Liberty, Boots and Habitat

Boots

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This week's episode showed 10 hopefuls venturing in to Boots HQ. The one that amazed me most, just by one single revelation, was Tracy Wood, producing eczema ointment in her own kitchen in New Haven.

(Her story could have been my mum's story. Not that my mum created a natural product to ease eczema and walked into a big retailers HQ, more her story about also having a very young baby - me - with atopic eczema and the natural remedies she tried to ease this skin problem with. Sea salt and soft soap (groene zeep) for years and years. Boy, these remedies didn't half sting! But they did ease the eczema: sea salt - swimming in the North sea every single day during the summer holidays - and soft soap, rubbed - really rubbed! - in my skin during the winter months.)

During a quick take showing Theo and Tracy she revealed she was already selling the product, due to existing clients recommending her product to others.

"I've must have sold around 70.000+ jars from my own kitchen already."

Holy-smoke, that's a big buzz - even Theo was impressed.

I understand the image of having your own product on the shelves of one of Britain's biggest health and beauty care retailers gives - and at this point in the series it is still not known if Tracy will succeed in this - but 70.000+ sold already without any noticeable branding is IMHO quite an achievement.
(Looking at Tracy's website, which loads terrible slow and is kind of off-kilter I don't think this site generates many new contacts - Quirk SearchStatus only shows back links from her own domain and a single one from 123people, Google doesn't list a single link coming in. Her Facebook page has 2 posts and 30 members and I guess she just started on Twitter, first tweet of the 26 in total was 16.03.11, so hardly any Social Media presence at the moment).

Quantity in products or quality in profit?

So even without a decent web presence her natural products have created such a buzz among her clients, she's managed to sell 70.000+ single items.
Of course, this on its own does not make a new product Britain's' Next Big Thing - having 100 units of your product in every Boots shop would mean you have to at least produce 200.000 units. And of course there's economics in producing big quantities but how about the quality in profit on those same 200.000 units? My - and I think anyone's - guess is that Boots would take the biggest profit from it.

Tracy is only one of the many persons working from a small unit - kitchen, workshop, bedroom - nowadays. And not many will make it "on to the shelves" of Britain's biggest retailers. But in these days of the long tail, easy internet access and free software programs to help you market and sell your products online I'm wondering why many would still opt for increased quantities versus reduced profits in absurd large numbers of units?

Last night's broadcast gave me an extra incentive to create this new guide I have had in mind for the last few weeks "Selling Online Basics" with a bit more haste ;-)
There's a lot of people out there with great products that could do with a simple but effective step by step guide showing them how to keep the full profit in their own pocket.


API - connecting the dots (com)

Was email The electronic innovation of the late 80's, the wibbly.wobbly.web of the late 90's and Cloud computing of the late 00's, Application Program Interface must be The innovations now - do we actually have a name for this decennia yet, do we call this the 10's, tens or teenies?

Connecting dots

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Image taken from Narrow Boat Albert (book-reviews)

In the olden days sending products (read data) needed a lot of manual handling when transported from one area to another. Take for instance transport of goods over water.
Loaded into one boat, "sailed" as for as the water way would carry that particular boat, unloaded again to be loaded into another boat taking it over another water way as far as possible, unloaded/loaded again into another until it finally reached it ultimate destination. Cumbersome and taking a long time. Until larger water ways were connected by canals, reducing the amount of handling tremendously. (I'm rather a fan of the old travel ways using narrow boats, call me a romantic, but have you ever seen the breathtaking aqueducts built especially for this?)

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(Image again from Narrow Boat Albert blog)

Bringing the idea of connecting canals into the 21st century, API connects especially various Cloud computing programs with each other, reducing the number of times data has to be manually handled. Other - desktop - software programs use API also to extend their usefulness.

I regard Cloud Computing programs those software programs you can access anywhere where you have an internet connection, from blogs, email marketing, CRM to ecommerce sites and even online banking (Software as a Service). Accessible everywhere is great, but none or very few programs take care of all the essentials. Email marketing does not include your bookkeeping, blogs don't process your payments from clients and CRM's don't sell your products online.

Meaning, without the means of a API connection, the details of your contact/clients need to be handled many times over. Connecting programs - letting them talk to each other in bits and bytes - overcomes this cumbersome problem.

Take for instance our own secure webshop. Since mid last year we use Ecwid for this, the widget embedded in our blog (and main website also). Client decides to pay using Paypal.
With one click - place order - details of my client are captured in Ecwid, in Paypal and in Kashflow (our bookkeeping program we also started using mid last year).

If I want I can even transfer (one click again) details of this client from Kashflow into MailChimp and email further marketing messages to them. We don't use MailChimp for our email marketing at the moment, Octane HQ takes care of this (including none email marketing), but on the other hand I do have a MailChimp account and use this for a village project.

So, no more manually entering details in various (online) software programs, all done (almost) automagically through API.

Other connections

Of course, other online programs use the same principle. Tweet a message and add specific hash-tags and the same message appears in Facebook, LinkedIn etc. Publish a blog-post, and various API's will show an announcement on Twitter, Facebook to name but a few.

Then there are desktop software programs who, by utilising API, can upload data to all kinds of online programs. One I frequently use - this blog-post on Typepad is a fine example of it - is ScreenSteps Desktop. I can even publish the same article in other programs without having to lift a finger (well, I only have to tell ScreenSteps in which programs I want the post to appear).

Bringing it together

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At the moment I'm working on a specific guide to show how using various Cloud computing programs, all using API in one way or the other, can help you create an ecommerce project very quickly and efficient. My target group will be small business testing the waters of ecommerce, those who need to simply test a new product (digital or physic product) without disrupting their normal website or which could interfere (marketing wise) with their existing ecommerce presence.

For some of the programs in this guide I'll use free editions of award wining software, so even start-ups don't have to break the bank getting started with ecommerce. The beauty of using free edition first is that you can always upgrade to a more advanced edition (with more features and benefits) without having to start all over again.

Still looking for a proper name for the guide though, "connecting the dots (com)" might work here too ;-)

Do you have a favourite program that uses API? And how does it benefit the running of your business?