The Kiss Business too (2)

Brand (mis)match, blur, blur, blur

When one of the big supermarkets proclaims to Brand Match the price of their competitors, the first thing which comes to mind is that in fact they - Sainsbury in this case - are actually telling me:

Our prices have been too high for a long time

 

IMHO it is a brand mismatch:

• you go to Sainsbury because this company is regarded as being of higher quality (just like Waitrose is perceived as);
• you go to Tesco or Asda because these two are always trying to win "we're the cheapest" game, not quality (perceived quality).

Is Sainsbury joining this game now and by doing so "re-branding" themselves for the sake of market share? Blur, blur, blur

What do you think?

I'm just a silly blogger, I know. But nasty?

Early this month I compared Real Time Marketing with the "speed" paper magazines can publish a two-way conversation.

I'm known to speak my mind (and known to write double Dutch English too), 'cos I'm just a silly blogger interested in IT, progress, marketing and interaction between various parties.

Invite to comment

And, as silly bloggers do, kindly invited the editor and the regular contributor mentioned in my post to comment in the comment box. The editor in question did reply, by email only and only to state that modernising the online presence of the trade magazine would costs a lot of time and recourses. (I still beg to differ.)

The regular contributor (Sid Bourne) replied in the September issue, but only on our reply - published in July's issue - to his story from May.

Who's nasty?

Not only do I lack proof reading skills, according to Mr Editor I'm nasty too (besides being, as already acknowledged, silly).

Funny thing, the Internet. The original post is being found time after time since yesterday (when the September CFJ issue landed on all subscribers doormat) on various phrases all containing: CFJ goes pubic. Oh, those modern times and tools!

Honourable

In 2007 I received an email from someone I did not know, but who very kindly had taken time to inform me on a typo he discovered on my site where I explained where the business novel :The Kiss Business was all about.

I'd missed out the c in the word exciting, making running a business both exiting and scary - funny that ;-)

Thanks again for this, Paul F. - hope your business is going well and you enjoyed my book?

Now I could of course return the favour and call Mr Editor a nasty and ignorant person, but that would just be silly, wouldn't it?
Honourable however, he definitely isn't.

Old speed - new speed: DM Scott versus Contract Flooring Journal

Yesterday two things happened, both related to speed of interaction.

New speed - David Meermans Scott

Being a (full) member of The Directors' Centre Business Club I'm treated every month to interesting, worthwhile articles, tips and videos, collected by Robert Craven's people.

This month they uploaded the crowdsourced video of David Meerman Scott delivering his key-note speech about Real-Time Marketing & PR at the Marketing Sherpa Email Summit in Las Vegas (2011). (You can also watch the video here on vimeo, I highly recommend you do)

At the time of writing this article I have only had time to watch about 35 minutes of the full 50 minutes yesterday, but it left me impressed of what Real-Time journalism (marketing) can establish and am fully aware this "mind-set" is within everyone's grasp and ability. In this day and age of interaction in a blink of an eye, he outlines the importance of a fast response to enquiries and using current trends to get your brand and products talked about.
(And he's not just talking about twitter, facebook or QR's)

Old speed - Contract Flooring Journal

The second thing what happened yesterday: the August issue of Contract Flooring Journal was delivered by our village postman. CFJ is one of the floor trade magazines we're subscribed to. It contains news about floor covering products, preparations, legal and regulation tips/advice etc for the contract flooring trade (as retailers ourselves we are not often involved in contracted work but we like to read everything that is happening in the market).

Underneath this month's article of one of the regular contributors to the magazine (Sid Bourne) there was a little note:

(had to use my good old scanner to get the image)

Oh, goodie. CFJ employing "cliff-hanger" tactics.

Short history:

• in CFJ's May 2011 issue Sid Bourne wrote something in his article we did not fully agree with (and fortunately, the May edition of CFJ has just been uploaded to their website, so I can now link to the original article, instead of having to scan it from the magazine, print it as PDF, upload it to my own server for you to read).
• after reading Sid's article we wrote a comment and emailed it to the editor.
• the editor replied:
  
  • "We love to get feedback from readers, the more controversial the better.... We work about six weeks ahead, so it will be the July issue."
• Duly in July my comment on a specific part of Sid's article was published - we did not write the headline though, editor's prerogative
• Sid must have written his reply soon (remember, 6 week deadline)
• We're in August now, cliff-hanger note in CFJ
• September: we will finally be able to read Sid's reply
• In the event we want to reply to his reply - do the calculations: Sid and others will be able to read this in...... NOVEMBER 2011

A full six months later for the 4th item in a discussion to be published and read - would anyone still remember what the original article and first comment was about???
Really 21st century breakneck speed here.

Come on CFJ, get up to speed. Open up your website for interactive conversations like this. May issue is now pubic *(see edit below), 3 months old news. Extend your website with an "subscribers only" area and have the latest issue there the minute the genuine article lands on our doormat. And allow instant comments and replies on all articles.

Having a Facebook profile (not a Page) and a Twitter account is not enough to get new speed.

Inviting Sid to the new speed era

Sid, if you happen to read this, you are kindly invited to publish your reply to our comment right here in the comment box, so we can drag this conversation - in my opinion sure to be a worthwhile exchange of opinions and experiences - into this century of Real-Time journalism.

---------------

* Edit 31.08.11

CFJ editor's "reply" in Sept issue:

No Alan, pubic IS the word used, "grave typing error" on public. It does exactly what it says on the tin here: known to write double Dutch English ;-). And I plan to leave it in as not to disappoint all those now searching "cfj blog now pubic" (17 and counting).

Of course, it would have been much more honourable of Mr Editor, during our email conversation about above "nasty" post early August, to give a gently nudge about the "grave typing error".
Apparently, giggling as a schoolboy over the word pubic is more important than keeping up with modern times.

From lead-page to delivery (and Ecommerce in between) - combining expertise

If you are a frequent visitor to this blog of mine, you know I love combining things. Over the years I've discovered that by "stacking" solutions the sum of the stack is 9 times out of 10 much larger than the individual items on their own ever can be.

Although everyone seems to be talking about Social Media and how businesses should embrace all the various "buzz" out there, a good old static website combined with conversational (medium to long) sequence of informative email messages to potential and existing clients is still hard to beat. Then, once your client has purchased your product (or service) the delivery should not just be an afterthought, but an integrated part of the "customer experience".

Like a good diner, slowly cooked and eaten to enhance the flavour/experience

Tweets and updates (with or without links, photo's or videos) on Facebook/Google+ are like quick bites, but will they ever satisfy your potential client/existing client with all the information they need before deciding to purchase from you?

No matter how many statistics are out there, sometimes forcefully forcing you to believe that ONLY Social Media involvement is going to safe your business, my own experience - by listening to our own clients/friends etc - is differently. More often than not, a well balanced diner will be enjoyed better and longer remembered. And this you can only establish by cooking slowly, taking your time with the preparations, the presentation and the "after-diner" treats and relaxation.

So, how do you translate a well-balanced diner (with all the trimmings) into a web marketing strategy? As with diner, you combine the expertise of others - often only featuring in the back ground of your clients experience - to create, present and deliver the goods. Would your diner guests be interested in the name of the farmer who grew the vegetables or reared the animal you serve? But still, your farmer's expertise does add the necessary "flavour" to the dish you make. But your diner guests only see you - the host - giving them a great and enjoyable time

Same applies for "cooking" your customers' experience online.

This week I found various experts that can help you "cook" your diner and give your guests a great experience. Combined, they become an army of little helpers in the background, where you can shine and take the "glory" (respect and long-time commitment from your clients).

Lead pages

Having a website is not enough, you need to have that extra special you can offer your potential guests. As an invitation to come to diner.

Ed Rivis (author of Massive Traffic and Email marketing Dynamite) is on the verge of launching a new program: Lead Site Launcher.

It will be a great and simple software tool to create (almost instantly) those invites that'll wet the appetite of your future diner guests. Watch the video on his blog post to get a first taste yourself.

Tasteful invites

Lead pages on their own are not enough to entice your guest to accept your invite. It has to leave them with the impression they just can't miss out on what you are offering.

Carol Bentley is your "little helper" here, working in the background giving you the most simple but effective copy-writing tips to establish just that. Subscribe to her blog or purchase one of her books (my favourite is still "I want to buy your prioduct.... Have you sent me a letter yet?")

The menu card and table setting

Now your guests are jumping impatiently to come to diner, you have to make sure the menu card is easy to understand and the table setting is so obvious no one's going to feel left out or placed at the wrong end of things.

Your webshop and order processing should be the same. Do all the items have a detailed description and is the pricing clear, are the delivery costs easy to understand. What payment options do you offer etc.

My own E-guide "Selling Online Bascis" is just the ticket for this part of the diner experience.
You don't have to take my word for it, this week Carol very kindly wrote a review on this guide here. (Couldn't have wished for a better review to be honest, so thanks once again Carol)

The delivery

Now your guests have arrived, you "only" have to deliver the goods. And this is often an afterthought. How often have you received an order late, damaged or incomplete? Or even not at all?

Sam(antha) Anderson of Post and Packing Warehouse (P&P for short) has just written a very helpful guide on the very subject: "How To Make Your E-commerc Business Work For You". It highlights the pitfalls of order picking, packaging and tips/advice when to consider outsourcing this part of the experience to a trusted third party - just the way you would employ a catering company when your diner plans are growing and growing and your own time is spread too thin to take care of everything yourself.

You don't want to disappoint your diner guests now, do you?

Make it one complete experience

All the above expertise can be combined by you to create one streamlined and uninterrupted experience for your potential and existing clients.
It's not the quick bite of a tweet, or of a nudge on Facebook. It's is a carefully build diner your guests will remember for a long time - in the best possible way.

And here's the clinger: they all want to come back for more.

Pay attention to get attention

Today the local postman delivered a large envelop, that is one thing to get my attention.

The address was hand-written - now that always gets my attention
(although I never write the address on envelopes we mail out, I couldn't bare to waste any postman's time trying to figure out what on earth has been written down - I know, I have a terrible hand)

Therefore it was the first envelop to be opened. Inside I found two leaflets (A4 and double A4): new products and trade price list of the new products. Plus one letter.

"Dear Sir / Madam

I am writing to thank you for your continued business and support in these very difficult times and....."

Now they'd lost my attention.

Cold leads, prospects, clients and returning clients

Trouble is, I don't know the business sending me the handwritten large white envelop with shiny A4 leaflets inside. In fact, I've not even heard of them, let alone am continuing to do business with them.

If I had been a returning client - as the wording "continued business" would indicate - the writer would have known my name and tittle to address the letter to me personally - which always gets my attention (after I check if they wrote my name correctly and not changed it into Karen - or Caroline as frequently happens too)
If I had been a client (having made a first purchase) the wording continued business would not be appropriate - and they would have known my name to address me personally.
If I had been a prospect, see above.

As cold-lead, I'm the last person to deserve the thanks the writer is expressing.

So instead of turning the first sentence of the letter into a feeling of being seen as a valued contact - as no doubt the writer's intention was, it put me off completely and I binned the lot, shiny leaflets and all.

Now there is nothing wrong with trying to rake in new business in "these very difficult times", we all do it in various ways. It only works much better if the letter, the wording, the content is appropriate for the reader in question. Explaining all the benefits of doing business with us to a long standing client would definitely get me on the wrong side of my valued client - they already know. Thanking a cold lead for their continued business.... you get the picture.

Database

Every business is able to create a database, be it through the most elaborate software or a simple spreadsheet. It is quite easy to divide your database of contacts into specific groups:

• leads (cold leads)
• prospects (warm leads)
• clients
• returning clients

Writing two (leads and clients) or four (to each group individual) letters does not take much more effort than writing one "trying to catch all" letter and wasting precious materials (envelop, leaflets, postage). At least you won't aggravate the very people who's attention you are trying to get.

When's the last time you checked your database?

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.

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?

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:

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:

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.

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).

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.

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

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!

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

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).

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

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.

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?

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.

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

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:

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:

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!

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

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).

Hula for sale at Habitat

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

No online shop available to buy direct from Laura Wellington

SunSnoozer

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

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.

Frog BracKit

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

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

At Habitat (confused!)

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:

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

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

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

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).

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)

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!