Most of the posts here have pertained to the development of the product of itself since we cleared the investor hurdle back in May, but no matter how good the product is, a business is only as successful as the strategy behind it. We've been exploring ideas on the best way to bring the product to market since writing the business plan.
Initially, we were going to sell the docking stations directly to consumers through our website. A common question we get is, "why not sell through Apple Retail Stores and places like Best Buy?" A very fair question. Selling to large retail chains is a complicated affair full of politics and weird policies. Most retail chains look for an established dependable supply chain and proven sales numbers before they will bring a product onto their shelves. There are packaging requirements, bar codes, naming conventions, inventory management systems and distribution rules that all have to be met.
Another issue is connecting with our customers. If we have the ability to support and converse with our customers, we can build a stronger consumer base. We will know why people buy, why they don't, and what, if any, issues are likely to arise after purchase. This will help us fine tune the product and service much faster than selling through a retail chain.
The final reason is cash flow. Selling through our website means initial volume will be much lower, but the margins are better since we don't have to sell at wholesale prices to retailers. The higher sales numbers in the retail situation would mean Henge Docks would have to have a lot of cash tied up in inventory. These funds will be better suited to expanding our product lines so we can grow the company faster.
Leave a comment