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May 2011

Dressing down or dressing up? #BNBT

This week's episode of Britain's Next Big Thing brought new developments for some contributors and more insight into the sometimes strange world of big retailers (and business sense of some).

Dressing down the products

It really seems there's a big difference between how the three participating retailers work with their brand new - or soon to be, and for some hopefully soon to be but still unsure - designers and suppliers.

Besides Catherine Gray (of the ceramic brightly coloured vases) it now also became clear that Laura Wellington's Hula would be licensed to Habitat in a dressed down version of only white plastic strips for the light instead of the multi-coloured strips.

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In one of the earlier posts on #bnbt (License to sell) showed that Catherine was happy to take around £900.00 for the pleasure, instead of a higher profit. In this week's episode she told Theo she realised now that in fact she was getting "paid" for high buzz exposure (my translation of what was said).

The same is now happening with Laura.

Both dress down their product to make it an unique item for Habitat, while staying in control over the other versions and where the big retailer takes the risk of the production and the sale of the "unique item". Both are being paid of the numbers produced, not on the numbers sold.

Who's got more control?

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Two other Habitat potential new suppliers (although if you check Habitat's online site you know who's made it) plan to supply the retailer with their own produced products.
Take the Beeble - the best example in this case. Steven Biddulph started by asking £ 85.00 for his foot stool, Habitat is still expecting to pay no more than £ 30.00 per Beeble.

So, Steven keeps tweaking his design - dressing down - to accommodate their demands.
Contrary to the two ladies who take a royalty, will he be able to produce the normal Beeble once the product meets Habitat's purchase price? Where will he find reasons to ask "private" clients a higher price. The only way I can see is varying the cover fabrics, but would that make a sufficient "different" beeble?
My guess is next week we'll see the two parties part:

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The Frog Brackit has made it into Habitat without being dressed down too much. Habitat only wanted a very small change in the frog it self and possible coloured ones (green and brown frogs were being tested during the episode, specially the green one I thought looked quite nice). Debbie Evershed stays firmly in control, and is in my opinion one of the winners of the program.

Although:

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Dressing up

Richard Weston traveled to Como to watch his exquisite scarves being produced next to products of well known brands. He's getting ready to supply Liberty with his scarves and keeps a close eye on the quality and quantity.

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Don't think so Richard. Think it is more down to the authenticity the Italian visit portrait.

Looking forward to next week's episode, the last one in the series. Who will end up in the winner's team, who will fall at the last hurdle? (Of course, this program has been made way before the first episode was aired, keeping your ear - and eye - out on Twitter and Facebook or on the various contributor's websites gives you a decent guess already).


Grow your business by renting

 

(guest post)

If you’re either about to start a business or already have an existing venture that is just ready to blossom into some altogether bigger then it may be time to consider renting a desk or office. Chances are, you may have started out in a spare bedroom, study or even the garage, as is the case with around sixty per cent of start-ups.

Move on up

Working from home is all well and good, and it’s well suited to people who want to be close to the family and get rid of the need for a tedious daily commute. It can be a cheap way of working too, but it’s not going to be for everyone. Working from home can be a solitary business, and if you’re the type that likes to network then the spare bedroom is hardly the place to do it.

So, with a recession rumbling on and lots of lovely office space up for grabs across the country, there has never been a better time to move on out and into rented space. If you’re a one-man band or a freelancer then the first concept worth checking out is that of the desk rental scheme. There are lots of these ‘desks’ available and they can be found using a simple online comparison site.

Office rental websites work in much the same way as comparison outlets for broadband or mobile phones, and quickly allow you to search for and find any desk or office rentals that are in your vicinity. The great thing about this is that you can get an instant idea of the going rate being charged for space, and due to the recession, prices are currently better than ever.

All the trimmings

If you’re a bigger business, or are thinking of expanding, then try looking for shared offices in the same sort of websites. These take the concept of the desk rental idea and add on lots of extras, which in many cases will include receptionists, post and IT support.

In either case, the added benefit of these rental deals is that they’re invariably highly flexible, contracts are short-term and on a rolling basis and the building remains the property of the landlord. This can, of course, mean a lot less hassle for you, and leave you to get on with the business of growing your venture. And, what’s more, the additional bonus is that you can pick a location that suits your needs down to the ground.

If you carry out a search using one of the comparison sites, you’ll soon see that many desk and office rental deals are available either in prime inner city locations, as well as on purpose built business parks. This means that your business will get an instant boost from having a respectable postcode, and as we said earlier, there’s also the chance to network with others as well as drumming up new clients and extra business thanks to your more easily seen location.

If you’ve never entertained the prospect of renting desk or office space then it may well be time to think again. The overheads can be cheap, it can be a lot less stressful than you might think and, ultimately, you may well boost your business as a result.  

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About the author: Rob Clymo writes on behalf of Office Genie, the UK's first proper online marketplace for desk space and shared office space.

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Interested in starting your own Ecommerce Venture using rented office space? Check out the brand new E-guide "Selling Online Basics", a publication by 1 Plus 1 Makes 3


Launch of Selling Online Basics E-guide, thanks #BNBT

The idea of creating this E-guide started when I switched from our desktop ecommerce software to the online software Ecwid (Ecommerce Widgets) for our retail secure webshop (still IMHO one of the better decisions we made).

Until recently this idea just sat on the back-burner. It wasn't until I started watching and writing about BBC's Britain's Next Best Thing (#bnbt) I realised how needed this simple guide really was. The show on fledgling designers and many mumpreneurs made me truly aware of how many other start-ups, work-from-home-persons, I-have-an-idea-lets-build-a-website youngsters and semi-retired baby boomers could be around.

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What BNBT also showed us (me in any case) is how little aware many still are on free online programs they can use to start an Ecommerce Venture without having to break the bank and/or without having to know in-depth knowledge of software. You don't have to wait til a high street retailer decides to stock your product before you can start selling, nor do you have to dress down your product or idea to accommodate high street retailers desired purchase price. Just launch the darn product!

So thank you, #BNBT of kicking me into higher gear and finish the "darn" thing in double quick time:

The basics, right here

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There are more Ecommerce sites being launched every single day than there are premises being opened for "old-fashion" retail outlets. More and more articles, blog-posts, magazine and even books are written on the rising tide of businesses selling products online. But none, or very few, will hand you the simple steps to launch your own Ecommerce site.

This guide will.

No need for:

  • an existing email address
  • an existing website
  • an existing webshop
  • PDQ equipment (to handle incoming payments)
  • an existing money-pot to pay for software to start selling online

All you need is:

  • your product, even if it is just one single product, be it digital or physical
  • internet access
  • passion about your product(s)
  • some writing skills to pass on your passion to your prospects
  • this guide

This guide is for:

  • work-at-home people with a ready product, by it digital or physical
  • existing start-ups without a foot in the door of existing retailers
  • hobbyist planning to turn their hobby into a sustainable income
  • people from 16 years old (due to some age limits software companies have implemented) to lively and entrepreneurial pensioners
  • anyone already using PayPal's "buy now" buttons or PayPal shopping cart and who finds this too limiting
  • anyone who knows their (new) product will excite others
  • anyone just wanting to empty their attic or garden shed but don't like Ebay
  • anyone without html coding knowledge, seo knowledge, web-design knowledge
  • anyone who wants to start selling online in one single day (half a day even)

It will hand you the online tools to start selling, it does not promise you'll be rich within a day - or a week, it's a tool guide, not a "get-rich-quick" scheme.

Who am I to write this guide?

Together with my partner I run an independent specialised retail business, he does the installation of the quality wooden flooring I sell. Besides the selling of our products through our showroom I manage our website, blog, ecommerce site and all other web marketing. Single-handedly - without an IT department, without an IT manager, even without an IT background or college grade.

However, I only use software programs that comes with an excellent customer support, be it with their documentation, training videos or email support. Some even come with their own users forum or twitter account for instant help.

The four online software programs (all award winning software) I will be discussing in this guide are free, and still have superb support available. Why? Because 3 of these programs have fee-paying account levels too. It's the principle of these companies to help you out from the start and they make no difference if you pay for your account or have a free account. Simply said: they hope you will love using their program so much you eventually become a paying customer once you realise how many more benefits a higher account level can give you. That's how I got to know all the ins and outs of the programs in this guide and on most I'm now a fee paying customer.
But for starters, the free versions are all you need to get started selling online.

The fourth free program is quite different, it has related programs - some free, some "pay-as-you-go" - you might become interested in later. The fifth essential online program you need is one of the so-called "pay-when-you-sell", no fees upfront or fixed monthly contribution.

Because of managing the webmarketing "single-handedly", I started to see/learn/experience how programs can be combined to become bigger than their own parts. None of these programs on its own will give you a complete ecommerce site, but by cleverly combining them you'll have absolutely everything you need to start selling your product or products online. Since more and more online software programs are able to "talk" to each other the combining (or linking them together) has become easier than ever.

This guide will focus on how to sell your product online as simple, quickly and easy as possible. It is therefore not an in-depth guide on all four individual programs. The title of this guide is called "Selling Online Basics" for a reason, it gives you instantly what you need to get the basics to start selling your product/products online. Later on you can dive into the single programs yourself to see what else they can do, but the "basics" is all you need for the moment. And all of these basics are covered in this guide.

So, what's in the guide?

  • An introduction to all the programs you need, the reason(s) why you can start with the free version (if applicable) and how to upgrade to a higher account level of the programs (if applicable for you).
  • A logical sequence of opening accounts for the free version of the online software programs you're going to use for your Ecommerce site (online presence).
  • Step by step screen shots of what you will see and need to do during the opening of these accounts
  • Extra information on the programs, but only if and when relevant to the essence of Selling Online Basics
  • How to combine/link the programs together into one effective working Ecommerce presence without the need to enter data all over again in separate programs.
  • An "if you already have..." per chapter, giving you shortcuts for the whole process
  • An extensive reference section for additional tactics and advice at the end of the guide to help you become a successful ecommerce business. (Remember, this guide only covers the online "basics" - but all of the basics you need.)

This guide starts on the premise of not having any the tools yet. Some tools, such as an email address, everyone might already have in place. Then still, it might be very handy, for a one-off product for instance or testing a brand new range, to sign up with the free version of the online tool discussed in this guide.

It's the simple combination power between the programs which makes the whole selling online process so simple and effective!

Karin H - proprietor of 1 Plus 1 Makes 3, managing director Wood You Like Ltd


Just ship the thing #BNBT

From yesterday's BNBT (Britains Next Big Thing) 5th episode, two things stuck in my mind: don't wait for permission and why did some not predict and benefit from the exposure (free marketing!) now their contributions are aired on national TV?

To patent or not to patent

In our world of wooden flooring everyone knows of the ongoing legal war between two multinationals in laminated flooring. Who's infringing on who's patent on the click system? This has been going on for years and every time the trade thinks it is finally settled, off they go again for another very expensive legal war in another country. These are multinationals, not work-at-home mums with a great invention many were looking for.

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Elaine Armstrong, mumpreneur from West-Sussex has looked into patenting her bikeback but the costs to hold a patent can be enormous.

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When Theo Paphitis remarked on the fact she had not pursued it further, Elaine gave the best answer possible in my opinion: and besides the costs for a patent, I would not have to money to fight any copy-cat.

Just ship the darn thing - establish your product as The Original as soon as possible, copy-cats will follow anyway, patent or no patent. At least then you have been able to recoup all the research and development costs.

But it seems the bikeback is not yet for sale, anywhere!

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Waste of buzz created by BBC's program. It only takes 30 minutes to set up a secure online shop (with Ecwid Ecommerce widgets) and start selling the darn thing. Even if it is not yet really polished or if the packaging isn't perfect yet - at least get pre-orders in!

The Ledge, without an edge

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Russell Leith's invention of The Ledge - a self-supporting stand, wooden plank/board supported by only one leg and the wall - failed to get into Habitat. Reason: their product technology expert thought it was too much of a risky product that could trigger loads of complaints from clients when their Ledge was knocked over by children or pets (while Russell's' own family and many of his friends don't seem to have a problem with it, having the Ledge in their homes for over 9 years).

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But by Habitat's decision it seems to be the end of the line for him. While others, still in the running or dropped by one of the three big retailers participating in the program, can at least be found on the web (see here for the full list - as far as known) no Google search can give you any further details on Russ or his Ledge.
He himself claimed after the last meeting with Habitat: there is a future for the product.

Sure there is and having watched the program there must be plenty of potential buyers out there. But you can't find the darn thing on the wibbly wobbly web at all!

Missed opportunity, wasted time going through all the (e)motions of contributing to the program.

Any takers out there to pre-order the soon to be launched "Selling Online Basics"?

UPDATE 19.05.11: Selling Online Basics" launched!


License to sell? #BNBT

This week's 4th episode of Britain's Next Big Thing was often "interrupted" in our house due to lively discussion between me and my partner. Sure means it is an interesting program, but some items!!!

Poor retailer

Theo Paphitis boxing with profit

Mr retail himself Theo Paphitis used boxes to explain how little profit a retailer ended up with, just a measly 5% if the buyers got it right. Dear of dear me. Poor retailer.
According to Theo the numbers for the poor retailer works as follows:

  • 50% of turnover minus VAT goes to purchasing of the products (now that's quite odd, especially with Habitat and their shocking maths, remember the Beeble? - 40% tops, so where's the remaining 10%, hidden profit?)
  • 20% to overheads, such as utilities, rent etc
  • 15% to staff - on the shop floor
  • 10% to storage, logistics, marketing and the wages for buyers and inhouse designers.
  • 5% is "all" that's left for profit (I guess it is more like 15%, see note above on costs of sales)

Easily forgetting that the larger the retailer, the higher the total overheads are - the economy of large numbers. Besides, the 5% profit is more often than not for the shareholders, like Dragon's Den man Theo and his colleagues.

Poor Mr retailer Theo Paphitis

So, does this really explain why the big high street retailers squeeze their suppliers that much and hard?
Small, independent retailers work quite differently, lower mark up, lower overheads, higher % of nett profit - if they work smart. And establish a fair relationship with their suppliers at the same time.

(Side-note: the VAT man does not take a part from your profit; every VAT registered business acts as a collector of the Value Added Tax, deducting any VAT they pay themselves from the VAT their clients pay. And why were the buyers and in-house designers of the poor retailer grouped in a different class than the floor staff when it comes to their wages/pay?).

Supplier or royalties?

Catherine Gray's ceramic vases destined for Habitat

One of the contributors for Habitat is Catherine Gray with her ceramic vases, made in her own studio. She's selling them for as high as £ 195.00 a piece - giving her a £ 75.00 profit per vase, but Habitat is eager to sell them for £ 30.00 - wow. Problem there you would think, this retail price means the vases are made at a loss if Catherine produces every single one herself (her largest order to date has been 16 pieces) or... licensed by Catherine to habitat to have them mass produced in Italy.

The mass produced vases (for which Catherine will receive £ 0.30 per vase) will differ from the unique, produced in the UK in her own studio for her private clients in order for both parties to do "their own thing" without competing with each other.
Not much profit in there you think? Well, that depends how you look at it. Catherine has no costs, liability or risk to take with licensing her "habitat" vase, but receives £ 0.30 royalty per Habitat vase, plus - as she states herself - being recognised as an official Habitat desginer comes with its own kudos: almost free marketing for her other, more personal, bespoke vases. Which she can produce and sell for as much as her private clients are willing to pay for. Deal.

If you saw Charlotte Sale struggling to get the order out for Liberty you might wonder why she doesn't go the same way and license one - or more - products the same way, stopping the risk of making the unique glass pieces without a profit (due to the number of "faulty" ones). However, Liberty is quite a different beast than Habitat, with only one store (a very prestigious one at that) and giving their suppliers a fair deal.
This was also confirmed by Richard Weston, the professor of architecture and creator of colourful and amazing scarves with blown-up prints of minerals.

Richard Weston's mineral scarves going to Liberty

He's now - in his own words - at risk making an earning from his business and stands to make £ 1,500.00 profit on supplying the first 100 scarves to Liberty

Both new Liberty suppliers stay producers, in control of production with its own risks, which does come with larger profits.

Then there's Boots

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The retailer in BNBT with the most outlets, which prompted Theo to give us some more pointers on the economy of large numbers when getting your product into one of the High street "giants". The other two could sell 100 of your product for £100.00 - netting £ 10.000 turnover (the retailers, not you), where as Boots could sell 250.000 of your £ 1.00 products - netting £ 250.000 turnover (Boots, not you).

It's the low priced items Boots is after, which became very clear when their teenage testing groups were shown the It's All About Me teenage skin care products:

It's all about me skin care, it's the packaging not the ingredients

The older teenagers didn't like the packaging, would pay no more than £ 2 - £ 3 for it, not the £ 6.00 Elaine Weston had set. The packaging, according to Boots teenager didn't make it look professional or trustworthy enough to do what it said on the tin.

Boots buyers' comment to Elaine after the test with the teenagers was completed: you'll have to find cheaper ingredients, they are not willing to pay the price for it you want.

Eh? It's the packaging stupid, not the ingredients! Fortunately Elaine refused to change her ingredients to comply with Boots request. Not sure if Boots mentioned the real reason this - none-target - group was not willing to pay more for it, otherwise a completely different discussion would have taken place: are you willing to change the marketing, the labeling to make it more attractive to this group?

Talking about labeling:

stickers on Charlotte Sale's expensive glass vessels instead of appropriate labels

Looking forward to the next episode of #BNBT, more and more convinced some of the contributors will make a very good deal (while keeping in control) and others will, I'm afraid, not see beyond the kudos of getting that foot in the door.

As for the E-guide "Selling Online Basics - SO-basic: being a small independent retailer (lower mark-up, lower overheads, higher % of nett profit) with all the tasks that come with it - all joyfully excecuted every day - does limit the "free" time I can spend on it at the moment, but the end is near. So, stay tuned (for BNBT and more news on the E-guide).

UPDATE 19.05.11: "Selling Online Basics" officially launched!