Wednesday, August 03, 2005

Calder Guitar Case Story Ch 15 New Business Model

April 05

Frankfurt Musikmesse

I arrived in Frankfurt expecting a bunch of firm offers from potential distributors. Our prototypes had been well received - now it was time for these guys to show me they were serious about selling Calder Cases to dealers. We'd had one firm proposal from top rank UK distributor but I needed big orders from the US to make the business plan work.

What happened was very every meeting the same story '...very hard to give firm figures...difficult to sell such an innovative product to very conservative music store owners...would take a long time to penetrate the much competition...'

After 3 days of this I was a weary worried guy. To be competitive in the mainstream bag/case market distributors were interested in I'd have to go for high volume manufacture in China. This meant laying out big bucks - fine if I had some firm orders from distributors - but I had none.

Headed for the airport heavy hearted - checking out the newstand bought ID - The International Design Magazine. Struck by the number of features on innovative products being sold direct to customers over the web.

In a heartbeat I had a new plan. Forget distributors and dealers with all the baggage of low prices/high margins/volumes/full range of product/point of sale material/huge marketing budgets. No the way to go was straight to the consumer through the web. Make a truly brilliant product in the UK/USA, make to the highest standards and not down to a price.

Scribbled numbers furiously all the way to Heathrow - they looked good. Came home buzzing - checked out the new plan with my group of friends/associates - they all said 'go for it'.

Of course I'd spent a ton of money and time building relationships with potential distributors - was that all wasted? In the end I think not - I had learnt a huge amount about the industry, met some very cool people and received much wisdom from them. My new course was radical but also informed.

What turned me on most was that I could make the cases and bags that I had originally dreamt of - ok the market would be small but I would making products I believed in. And I would be communicating directly with end users much more satisfying than going through a chain of middle men.

Learning from this:
Be prepared to make radical alterations to your business plan.
Starting small with maximum control over your spending may be a more secure route to market.

category: early development

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Anonymous Anonymous said...

Hi Nick,
your cases are gorgeus, the most beatiful I have seen yet.
You are right, if you don't want to send your business to China, you have to compete in the high-gamma here in Europe. I have one comment, though: the price of the product. I have a hard time thinking in a guitar as expensive as the Guitar Case (3100GBP!!). A good Fender made in USA costs around 800GBPs. Astronomic prices are probably good for luxury items (jewlery, autos, etc), but it will reduce your potential market a lot. Suggestions: change materials? The space-age materials are getting cheaper and cheaper, and are far superior to anyhting in the previous history of the world. Optimizing process for efficiency, etc etc. I am sure there are ways to reduce DRAMATICALLY the price of the cases without resigning quality. Best regards from Berlin - Leo Lospennato -

3:44 PM  

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