ONCI So says you. Out of you're own head you de
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Posted On: 09/26/2018 11:38:31 PM
ONCI So says you.
Out of you're own head you decide what SB should have said to better characterize the actual situation? How the heck do YOU know? What's your basis for stating that you know better than SB that 500-700 units are not a monthly starting point, but rather an "initial stocking order"?!?
First of all, this goes against ANY production planning situation for private labeling that I've ever encountered. Though there's always the possibility of exceptions to this, I'm saying that just "an initial stock order" would be FAR FROM the norm for a private label deal (a fact). A reseller deal with a retailer? Sure, but that's a whole different animal. We're talking about a private label client. You should know, as we all (here) know, that there's a lead time from the factory for finished product (assembly, test, packaging and shipment). And there's a lead time for components (Bluetooth transceiver, molded plastic housings, etc.) before assembly can even begin. Without a monthly forecast/commitment, I can pretty much guarantee to you that there's no production plan. And any company that's serious about marketing a private label product is going to have to come up with - and commit to - a monthly forecast, that goes out at least as far as the "critical path" timeline including the longest lead time component and/or procedure in the production process. This is likely, IMO, to be at least 4-6 months (so SB should REQUIRE a monthly commitment from the customer for at least this length of time in orders). This is 1st, for the manufacturer/supplier (On4), so they can guarantee supply of the product to the customer; and 2nd, for the private label customer, so they can be guaranteed to have product available to meet their demand, once they turn on the marketing machine. With recent efforts (over the past year) mentioned by SB regarding production, new mold for cost reduction, etc., as well as the general ramp-up in dealer orders/shipments over the past several months, I expect that Steve could have enough inventory to get this customer started right away. But as the producer, it's still important to take a hard line with ALL resellers that they MUST provide and commit to a forecast if they want to be guaranteed the supply.
I don't understand why you criticize SB on various statements he's made, including many that he's already proven were NOT "incorrect," as well as many that are just beginning to play out - such as the private label deal - when many of YOUR recent statements have had to be (and/or clearly should have been) retracted, rephrased or restated.
Take this, for example:
First, what globe have you been living on? These professionals are now working at the speed of social media - and HAVE BEEN for the past several years, now. Whomever is involved and making decisions could very well take this much time or longer, but there is NOTHING in the real world now that precludes the customer from acting much more quickly and launching almost immediately.
You may be correct in your overall timing estimate for seeing ads in the public, it could be 2 months from now or even longer; but then again, you could easily be wrong. SB says we've been working with the private-label client for a while now. This product and the issue of DD is very hot. IMO, any company that has a stake in providing this solution should have all their ducks in a row for addressing the public before making the decision to private label the product. Good chance that they reviewed their own mockups for the device, package and advertising pieces in-house, and a media ad campaign alongside before even giving the verbal approval. That would leave only the task of "formalizing" finished art, design and producing the media. And most any company will probably choose the path of least resistance (lead time & cost) for starting a campaign which, IMO, would be digital media. Digital media for use on the web can be produced - AND then distributed - in a flash.
Second, you're making one heck of an assumption that there is ANY "co-op" advertising involved AT ALL. Co-op means that On4 is somehow participating in the cost of advertising. That's NOT how ANY of the private-labeling deals have worked for me in past businesses. I'm not saying that it's not possible, but you seemed to be suggesting - AUTHORITATIVELY, AS IF YOU KNOW - that this is the case.
Co-op ad campaigning is common when dealing with resellers. For example, when I've sold product to and through Lowes, Home Depot, Ace Hardware, etc. - yes, it helps to have a budget to subsidize the reseller's cost to announce the product and educate the public (or may even be required by the reseller in order to launch the product in their stores). But there's another reason many manufacturers provide advertising money, point of sale kiosks, demo packaging, etc. - and that's to control the price and protect your brand and your margins. You leave yourself open to possible antitrust litigation if you simply impose a Minimum Resale Price Restriction on your customers (in order to avoid having someone out there starting a price war with your product and killing your margins in the long run). However, if you provide advertising dollars and/or selling materials and/or other marketing/ad services in return for certain price discounting, etc., you can control the price and avoid sticking your neck out for whenever Congress decides to change the law or the high court decides to set a new precedent.
Just to be clear - we're talking about a "private label." That's Kellogg's selling Apple Jacks to Kroger, who resells under their own brand. Kellogg's doesn't pay co-op ad money to Kroger to help Kroger's brand compete with Kellogg's Apple Jacks. Kroger's on their own in that regard.
Again, not saying there couldn't be some form of co-op advertising involved here, but it's FAR from being an indisputable fact. It's MORE LIKELY, IMO, that SB's involvement with the private label customer's Ad Agency is to give a presentation and demo of the product, some samples for photography and for measuring any private label LABELING the customer wants to produce and adhere to the dongle (including artwork, certification numbers, etc. for FCC, CE, UL, TUV, CSA or whatever logos for safety, compliance, etc.), samples of On4's flyers and packaging, and more; the designers can then go about writing copy, taking photographs and drafting digital and print media (and potentially videos).
Out of you're own head you decide what SB should have said to better characterize the actual situation? How the heck do YOU know? What's your basis for stating that you know better than SB that 500-700 units are not a monthly starting point, but rather an "initial stocking order"?!?
Quote:
A better quote would have been "an initial stocking order of 500-700 units" and leave it at that. SB is just guessing what the future order amount is going to be.
I understand his enthusiasm but sometimes he needs to calm down and not stick his neck out.
First of all, this goes against ANY production planning situation for private labeling that I've ever encountered. Though there's always the possibility of exceptions to this, I'm saying that just "an initial stock order" would be FAR FROM the norm for a private label deal (a fact). A reseller deal with a retailer? Sure, but that's a whole different animal. We're talking about a private label client. You should know, as we all (here) know, that there's a lead time from the factory for finished product (assembly, test, packaging and shipment). And there's a lead time for components (Bluetooth transceiver, molded plastic housings, etc.) before assembly can even begin. Without a monthly forecast/commitment, I can pretty much guarantee to you that there's no production plan. And any company that's serious about marketing a private label product is going to have to come up with - and commit to - a monthly forecast, that goes out at least as far as the "critical path" timeline including the longest lead time component and/or procedure in the production process. This is likely, IMO, to be at least 4-6 months (so SB should REQUIRE a monthly commitment from the customer for at least this length of time in orders). This is 1st, for the manufacturer/supplier (On4), so they can guarantee supply of the product to the customer; and 2nd, for the private label customer, so they can be guaranteed to have product available to meet their demand, once they turn on the marketing machine. With recent efforts (over the past year) mentioned by SB regarding production, new mold for cost reduction, etc., as well as the general ramp-up in dealer orders/shipments over the past several months, I expect that Steve could have enough inventory to get this customer started right away. But as the producer, it's still important to take a hard line with ALL resellers that they MUST provide and commit to a forecast if they want to be guaranteed the supply.
I don't understand why you criticize SB on various statements he's made, including many that he's already proven were NOT "incorrect," as well as many that are just beginning to play out - such as the private label deal - when many of YOUR recent statements have had to be (and/or clearly should have been) retracted, rephrased or restated.
Take this, for example:
Quote:
Let's assume the private label deal is true.
SB meets with ad agency on Thursday. Agency will take up to 4 weeks to create an idea that is satisfactory for everyone (client and On4). Then they need to actually shoot or produce the ad and do post production work in order have a final product (another 4 weeks).
If everything goes perfectly I would expect the ads to be released after Thanksgiving.
The question is how much On4 will have to contribute in a form of co-op advertising. Will SB give out shares to client/ad agency in order to promote? Or will he discount the selling price rather than paying co-op fees?
https://investorshub.advfn.com/boards/read_ms...=143753958
First, what globe have you been living on? These professionals are now working at the speed of social media - and HAVE BEEN for the past several years, now. Whomever is involved and making decisions could very well take this much time or longer, but there is NOTHING in the real world now that precludes the customer from acting much more quickly and launching almost immediately.
You may be correct in your overall timing estimate for seeing ads in the public, it could be 2 months from now or even longer; but then again, you could easily be wrong. SB says we've been working with the private-label client for a while now. This product and the issue of DD is very hot. IMO, any company that has a stake in providing this solution should have all their ducks in a row for addressing the public before making the decision to private label the product. Good chance that they reviewed their own mockups for the device, package and advertising pieces in-house, and a media ad campaign alongside before even giving the verbal approval. That would leave only the task of "formalizing" finished art, design and producing the media. And most any company will probably choose the path of least resistance (lead time & cost) for starting a campaign which, IMO, would be digital media. Digital media for use on the web can be produced - AND then distributed - in a flash.
Second, you're making one heck of an assumption that there is ANY "co-op" advertising involved AT ALL. Co-op means that On4 is somehow participating in the cost of advertising. That's NOT how ANY of the private-labeling deals have worked for me in past businesses. I'm not saying that it's not possible, but you seemed to be suggesting - AUTHORITATIVELY, AS IF YOU KNOW - that this is the case.
Co-op ad campaigning is common when dealing with resellers. For example, when I've sold product to and through Lowes, Home Depot, Ace Hardware, etc. - yes, it helps to have a budget to subsidize the reseller's cost to announce the product and educate the public (or may even be required by the reseller in order to launch the product in their stores). But there's another reason many manufacturers provide advertising money, point of sale kiosks, demo packaging, etc. - and that's to control the price and protect your brand and your margins. You leave yourself open to possible antitrust litigation if you simply impose a Minimum Resale Price Restriction on your customers (in order to avoid having someone out there starting a price war with your product and killing your margins in the long run). However, if you provide advertising dollars and/or selling materials and/or other marketing/ad services in return for certain price discounting, etc., you can control the price and avoid sticking your neck out for whenever Congress decides to change the law or the high court decides to set a new precedent.
Just to be clear - we're talking about a "private label." That's Kellogg's selling Apple Jacks to Kroger, who resells under their own brand. Kellogg's doesn't pay co-op ad money to Kroger to help Kroger's brand compete with Kellogg's Apple Jacks. Kroger's on their own in that regard.
Again, not saying there couldn't be some form of co-op advertising involved here, but it's FAR from being an indisputable fact. It's MORE LIKELY, IMO, that SB's involvement with the private label customer's Ad Agency is to give a presentation and demo of the product, some samples for photography and for measuring any private label LABELING the customer wants to produce and adhere to the dongle (including artwork, certification numbers, etc. for FCC, CE, UL, TUV, CSA or whatever logos for safety, compliance, etc.), samples of On4's flyers and packaging, and more; the designers can then go about writing copy, taking photographs and drafting digital and print media (and potentially videos).
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