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Wednesday, November 29, 2006

The Aura of Aurora Real Estate

Real estate in Illinois continues to grow and prosper. Notoriously hot markets such as California, Boston, and South Florida are experiencing ripples of trouble resulting from a likely over zealous Mortgage industry promoting home sales to buyers that cannot afford the homes they have taken on backed with credit. However, in markets where the real estate is still growing for fundamentally sound reasons home buyers are going to make out like bandits.

I visited Illinois over the recent holidays and I can see the real estate movement there starting to hit with a targeted precision that has been refined in some of the other markets I mentioned. They are filling in the farm land rapidly with some great developments.

There was a report on Aurora Real Estate that helped give me some additional perspective and I'm becoming more and more convinced that real estate in Illinois is still increasing. The safe money is in the immediate burbs around Chicago, but I suspect that those burbs are going to grow down to Peoria and Bloomington and Champagne and Springfield and connect with the burbs moving Northward from St Louis.

It is a very good time to invest in real estate in this particular market. Things may be tanking in California but California does not drive real estate markets in the Midwest, especially markets supported by Chicago and St Louis, which make especially comforting hedges. With population growth estimates of 100 million more people in the US over the next 15-25 years the midwest is a safe bet for steady growth especially in between population centers like Chicago and St Louis.

Wal-Mart Distributing Movie's via Download

Wal-Mart announced that it will start distributing movies via a new download service.

Initially Wal-Mart will build awareness of the new service by providing consumers with the option to pay a few extra dollars when they by a DVD in order to acquire the rights to download the same movie to a PC or to a portable media device.

They are starting this launch with a bundled DVD / download of Superman Returns. It will sell for $14.87 as a DVD and consumers can pay an additional $1.97 to download it to a personal device or $3.97 to download it to their personal computer.

Sony Deals Self a Cyber-Shot in the Foot

Sony announced yet another quality issue in one of their products.  This time its not laptop batteries a problem that has led to a recall of over 9 million battery packs. 

That recall started with Apple laptops and later spread after a Dell laptop caught fire at a conference, which was caught on video.  The Dell incident was followed shortly thereafter by a spectacular fire at LAX involving an IBM laptop.  Shortly after each incident, Sony increased the scope and range of their recall.

This time Sony has announced quality issues with Sony digital cameras.  They have specifically called out issues that result in liquid crystal display screens that fail to display their images correctly and compounded by images that are saved with distortion and hints of some cameras that might not take pictures in the first place.

The Cyber-shot camera line has been specifically mentioned and indications are that the problem could impact up to 8 models.  A million units of these were shipped within Japan.  More were shipped overseas, but reminiscent of the battery recall, Sony has not yet provided numbers as to how many were shipped overseas and how many went to specific countries.

Model Numbers

The BBC identified on November 24, 2006 in an article titled 'Sony recalls cameras over glitch' shortly after the Sony Press Release the following models impacted by the problems:

  1. DSC-F88
  2. DSC-M1
  3. DSC-T1
  4. DSC-T11
  5. DSC-T3
  6. DSC-T33
  7. DSC-U40
  8. DSC-U50
Not a Logistical Recall; Just Offers of Repair

As yet they are not replacing units, but only offering to repair them.  Sony has not provided any return information to address these models specifically yet.  These models had been shipped between September 2003 and January 2005 according to the BBC.  That indicates that the product line was compromised most likely from the the beginning to the end of the product life cycle, approximately a year and a half. 

This is not the first time Sony has had problems with their cameras nor is it the first time they have seen these types of problems.  Similar problems came to light a year ago in October impacting almost two dozen models.  There is no indication that Sony new of the problems with these models last year, nor any reason that identifies why the problems are surfacing almost two years after the last shipment.

The reality of the situation is that many products life cycle far out strips that as measured by the manufacture that ships the products.  The products continue to live on un-consumed in warehouses, distribution points, and retailer shelves for many months and sometimes for years after the fact.  Many companies amortize the warranty risk of products based on historical trends for those lines and utilizing conservative measurements to expense the risk off in an appropriate amount of time balancing this with the need to keep reserves on the balance sheet clean.

Anatomy of Warranty Reserves

A product that began shipping in September of 2003 and stopped shipping in January 2005 may no longer hold a warranty reserve on the Sony balance sheet.  If for example Sony amortized the warranty reserve over a 12 month period, which is typical for consumer electronic goods with a 1 year manufacturers warranty, the early shipments reserves would have been entirely consumed as of September 2004.  All of the reserves would have been exhausted by January of 2006.

If we consider that Sony may have staggered its warranty amortization to 18 months to allow 6 months for the life of the product in the channel after leaving the manufacturing line or even 24 months allowing a 12 month channel life that would still leave the reserve with only 2 months of funding remaining.

Funding Remaining on 24 month amortization

So far 1 million units have been identified for Japan.  If the total scale of this recall follows a lesser trajectory than that of the battery recall, maybe 5 million units in total will have shipped during the time period.  Thus far according to The Wall Street Journal article Sony Cameras Bring Latest Quality Problem by Arran Scott and Yoshio Takahashi only 0.4% of the products shipped have been reported to be affected by this issue.

Now that Sony has gone public with the problem, it is likely that the increased awareness will push consumers to check their devices and take action.  If that reporting rate were to increase to 5%, then Sony could receive a repair bill for (5,000,000 x 0.05) 250,000 units.

If we run some rough numbers and make the initial assumption that these cameras retailed for $200 and that Sony sold them for $132 each indicating a typical retail margin.  Sony might have planned for a return rate of say 3%, which would translate to about $19.8 million initially in reserve on unit sales of 5 million units(about $660 million total revenue).

If we straight line the sales over the 17 month period(Sep 03 to Jan 05), that would be an average of $1.16 million in reserves booked each month.  Those reserves would have been consumed by actual returns and repairs, and if those returns and repairs failed to materialize at the time, the reserve balance could have been justifiably reduced 24 months after the initial sales date, or at the rate of $1.16 million per month if no actual expenses were incurred.

Putting it a different way if we assume that absolutely no returns or repairs have ever occurred with these products, which would included retailer returns and refusals-an unlikely situation at best, this would only leave $2.3 - $3.4 million dollars in the reserve as of the Sony press release to cover these expenses.

If an average return costs Sony $100

  • $25 service and support to set up the return - Customer Service Line
  • $10 in Parts
  • $25 in labor
  • $20 in Freight
  • $20 in indirect including legal expenses, accounting and everything else resulting from a Returns Fire Drill

Then Sony's 250,000 units x $100 per unit could cost the company about $25 million less a residual reserve of $3.4 million.  The return expense will net out at only $22 million.  No large amount for Sony, initially, but definitely something that would show that their historical returns rate in this case was double their expectations.

The Real Hit to the Sony Financials

Managing these expectations is where this recall and the battery recall may impact the Sony bottom line the most.  If for example Sony has to increase their Warranty reserve 2x on outgoing shipments this year that's a 3% (using our estimated numbers) increase in product expenses and likely to be even higher for laptop batteries.

The increase in rate might also be matched by an increase in amortization time required to spend the reserves.  Sony's accountants might be forced to increase the period from 12 to 24 to 36 or even 60 months, delaying the potential bring back of profits after increasing the cost of Sales up front.  As a public company this is where Sony feels the pain the most as an increase in this type of expense makes Sony even less price competitive at retail compared to competitors that may have pegged their warranty reserve rate correctly and held quality in check at the same time.

Benefit of the Doubt - Insult to Injury

That's giving Sony a significant benefit of doubt.  If that return rate increases, if the number of models increases, if Sony can't repair for less than what they sold the units ($132 v. $100 repair) or if the reserve was exhausted a year ago, then this dynamic could change substantially.

Brand Impact

The actual recall expenses above neglect to account for the cost or true impact on the Sony brand.  It will take many months and years before the true impact on the Sony brand can be assessed in marketing studies.  But it appears that Sony, long recognized as a market leader in product quality, appears to be rapidly spending that hard earned brand capital by bringing defective products to market and failing to rapidly address the issues as they come to light.

Tuesday, November 28, 2006

Gifting Flowers to Your Clients for the Holidays

There is a very simple and easy way to get on your customer's good side.  Send them some flowers for their office.

Good flowers can last a week or longer and will help cheer up your customers and the key people you interface with during the week.  Plus, it never hurts to have a little personal buzz floating around the office even if the accountant (who cuts your check) and the receptionist(that gets it in the mail on time) have a nice little discussion about the great flowers in the office that your company sent!

There's a great little website that offers flowers and gift baskets online.  You can find some great flowers for the holidays or for any occasional  www.dotflowers.com . 

Let's be practical, it is always a good time to keep your customers happy and positive.  You can continue to build great solutions and deliver on time and many other things, but a little personal touch can go a long way, especially with some of the intangible things like getting your check on time!

Wednesday, November 22, 2006

Hopping Across the Pond Overnight

While we celebrate the Thanksgiving holidays in the Americas this week, we wanted to cover a useful travel tip for visiting London.

LondonNights.com offers a great portal for finding nightly hotel rooms throughout London with rates from £39 up to £110 per night.

LondonNights.com offers some terrific discounted rates and all of LondonNights rates include VAT, which is pegged at about 17.5% these days.  If you are looking at a longer working trip to London and require an apartment they also offer short stay apartment options as well.

Turkey Distribution

This year the Thanksgiving holiday comes on the twenty third and many people all around the country are getting into the Distribution business, the Turkey Distribution business.  During the holidays many people step up their efforts to help local homeless shelters and food kitchens to provide meals for those in need.

While many families are planning cook times and preparation schedules for 10-20 pounds of turkey, Brian Rice of New Jersey plans on distributing over 85,000 pounds of turkey this year more than double last years effort.  That's a lot of bird to move around.  This year he's even gotten some nice people from a little known football team called the New York Giants to help.

In Connecticut, the Salvation Army offers up a different type of Turkey Distribution.  They are providing a bag of groceries and a ticket for a turkey for each family that qualifies.  Cooking a turkey need not be an elaborate affair.  While some people may buy special roasters or deep fry the bird or many other possibilities, there are some very good and cost effective ways to turn that turkey into a feast.  A simple cooking bag can really bring out the flavor of a turkey and all of the food for the dinner. The birds in Connecticut are a little small this year, but a turkey is a turkey.

Many more people all around the country will be volunteering, delivering meals and much much more to distribute a little bit of holiday cheer.  Please consider helping yourself or donating to a local charity to make this a special holiday for the people in your community.

Sunday, November 19, 2006

Cross Functional Degrees takes Cross Training to the Next Level

It is extremely important for different job functions to cross train within an organization.  Cross training strengthens an organization in many ways.

  1. It allows team members from different departments to bond and develop working relationships that can benefit their current day to day work.
  2. It allows team members to learn how to strengthen and improve their communications both generating better requests and providing more accurate detailed responses as the two sides learn more completely the needs of their counter parts.
  3. It allows both sides to understand more fully the capability of the other side and find information and help where they did not know that it existed before.
  4. Cross training provides the ability to provide more back up potential if a team member is suddenly removed from the team due to an emergency or realignment.
  5. Cross training even helps the rest of the team learn the job duties and requirements which will help when it comes time to perform team interviews to back fill these or related positions.

Sometimes cross training can be taken to an entirely different level.  Businesses often find that team members with a cross section of fundamental education and background can bring new levels of insight into company problems.  Many different cross sections arise when say an Engineer starts to get involved in product marketing and can design better products after learning how to connect with the product design requirements that are verbalized by consumers to the marketing department.  Similar combinations between Sales and Engineering, Accounting and Engineering, Accounting and legal, Marketing and Customer Support, Marketing and IT, Accounting and IT, and Sales and IT are all great examples.

So What do you do if your company doesn't have the time to promote a cross training program?

Well you can target gaps in the organization and seek additional education for yourself.  You might even be able to utilize a companies educational programs to seek a second degree or possibly an advanced degree in a new field that  will support or develop your skills in a new area. 

Maybe you have a background in Customer Support and realize that if your company could get the message out to consumers more effectively, the customer support process could be dramatically improved.  So you might consider a marketing degree as a means of learning what it takes and how it might be done to get things started. 

A Few of the Benefits

  1. A bachelor's degree is cheaper than a Master's degree.  
  2. A Bachelor's degree can provide you the fundamental education in that field that might benefit you more than trying to obtain an advanced degree that cross trains you in the field. 
  3. Depending on your existing credit hours, you might only need to take a couple semesters of work to complete an additional degree.
  4. You might be able to audit the courses and get a great deal of benefit from participation and study while making the determination of whether or not this path will truly be a good fit. 

Sometimes testing the water can be very practical before jumping in all together.  Why get an advanced degree focused on Marketing when you don't know the first thing about marketing to begin with?  You have to learn to crawl before you can run and a bachelor's degree costs significantly less and has easier demands as far as time is concerned.  This could therefore make it easier to complete a program online and still get a significant amount of return on your investment.

Callaway Direct to Consumers Like No Other

Retailer Friendly E-Commerce Platform

Callaway Golf Company has announced a new e-commerce platform that attempts to transcend channel conflict with its retailers.  Callaway is going to sell direct to consumers, which would typically create direct competition with its own established retail customers.

Callaway hopes to transcend that conflict with good customers that have helped Callaway grow their brand out not to mention providing on the floor services from sales, training, fittings and even lessons.  Callaway fields the customer in through their websites landing.  When the customer places an order, the order is electronically routed through the web and notified the retailers that might service the order the best.

Callaway uses an algorithm that includes criteria such as inventory, proximity to the consumer and the ability to be able to ship within 24 hours.  The retailers receive the notification of the order and respond if they are interested.  Callaway's system makes the judgement call provides the winning retailer notification.  The product ships within 24 hours and the consumer gets their golf club fast and efficiently.

Benefits

In addition to working with their retail customers as opposed to competing with their customers, Callaway's web site provides additional benefits.  It allows the company to market the widest possible range of their product directly on the internet.  Not all of their existing retail customers can carry all of their products and accessories.  This provides the consumer with the best chance of finding exactly what they are looking to purchase and reduces the potential of a customer walking into a retail store looking for a Callaway product and getting diverted to a competitor product or accessory.

History

Callaway has suffered from deep discounting that has taken place in their channel over the past years.  Channel conflict, excess inventory, and stock balancing have taken a toll on the company.  They have had to resort to several extreme stop gap measures in an attempt to stem the bleeding.

Lessons

This move signals a build out playing to Callaway's strengths as a brand name.  It shows initiative and the ability to come to terms with their customers, over 270 retailers have signed up!  It also shows a recognition of the holistic issues that plagued their channels and a move to make holistic repairs and restructure the foundation of the channel to insure its future survival.  Among other benefits this more streamlined approach should help the entire channel remain healthy, reducing inefficiencies that lead to supply chain misses and compounded later by a rush to build out creating excess inventory and a vicious cycle of discounts, fire sales and sales of products in exchange for media spending funds.

 

Friday, November 17, 2006

Unique Distribution for a Unique Marketplace

Many people in the distribution business face challenges and require a heightened sense of security.  Imagine never being able to use the cheapest freight possible.  Imagine having to hire and train three person teams to deliver your goods together.  Then perform FBI background checks on them to make sure they are not security risks themselves.

Imagine arming these people with handguns and rifles and giving them a bullet proof vehicle to transport your shipments.  Now imagine that you constantly ship product in to your 'warehouse' but you rarely ship product out.  You are not able to use third party warehouse systems and your warehouse has to be as secure if not more so than Ft Knox.

Brinks provides this service all the time, distributing everything from cash to gold bullion for exchanges like BullionVault.  If you are looking to store gold BullionVault uses Brinks like many distribution companies use FedEx or UPS, the difference being that the parcels weigh a lot more and the delivery guys are carry weapons.  Brinks has been securing its customers against losses for almost one hundred and fifty years (143 years to be exact). 

BullionVault takes gold bullion into its 'third party warehouse' owned and controlled by BrinksVault, which they refer to as a vault and then allow the owners to trade the precious metals on exchanges all the while maintaining performing a daily audit of the goods in storage available to its customers from the web.  They provide insurance of course on everything stored in their vaults.  Brinks must get good rates on their insurance as nothing has been lost from their vaults in 143 years.

Thursday, November 16, 2006

RFID 101 Video

If you are looking to catch up on the concept of RFID (Radio Frequency IDentification ), here is a fairly straight forward rfid training video from RFIDent.org.

This is a fairly good video that will give you a little bit of the history as well as some perspective on how the technology can be used and how it might be deployed, even how it can be

applied to improve upon existing systems and processes in your supply chain and warehouses.

 

These little wafer sized chips can be taped inside a book, inside a package, even sewn into your clothing.  My local library already uses RFID to scan and checkout books.

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Wednesday, November 15, 2006

Have a New Corporate Initiative or Product? Don't Forget to Register the Domain Name

Companies these days need to pay a little more attention to the internet.  That may sound like an overstatement of the obvious, however Wal-Mart, the world's largest retailer and no online laggard, recently missed the boat.

Wal-Mart has been working to overcome negative perceptions about their worker health care plans.  After many lawsuits from employees over cases of sexual discrimination and failure to pay overtime, Wal-Mart has also come under fire for paying wages so low that many employees cannot afford health care and even end up on welfare, while working for Wal-Mart. 

So Wal-Mart hired a PR firm to draft a strategy to change public and employee perception.  Almost a year ago they launched the initiative titled "Working Families for Wal-Mart."  Despite hiring a PR firm, Wal-Mart slipped up on the internet.  They neglected to register the domain name http://workingfamiliesforwalmart.com .

The result is that the website has been registered by an anti-Wal-Mart group, Wal-MartWatch.  The site is now being used to provide information about how Wal-Mart is falling down on the job, even laced with a bit of satire.  Wal-Mart failed to protect its marketing flank.  They should have registered domains for

Registering a domain costs about $6.50 for the first year and can be registered for multiple years at a time.  For less than a $100.00 Wal-Mart could have registered all of those domains for multiple years and avoided the embarrassment and degradation of what may have otherwise been a solid PR plan.

Ipower Domains

There are many different companies that offer domain registration services.  Frankly, its amazing that Wal-Mart hasn't started selling their own domain registration service whereby they could by domains at wholesale and save another 30-50 cents.  There's a time when cost conscience and practical don't meet half way and it would appear that Wal-Mart's two ships may have passed in the night with out passing a signal.

 

Saturday, November 11, 2006

Internet Marketing Resources

Monitoring Internet Marketing Resources is a growing requirement for Distribution companies.  Often online sales of products purchase from distributors will be sold at levels or prices that do not adhere to the terms the distributors are bound to maintain. 

NetResults has created a internet marketing blog hoping to pool the efforts of multiple people in a group blog.  They will cover topics that will vary from  Web 2.0 to Search Engine Marketing (SEM) and to general internet marketing topics.

NetResults Marketing Collaborative Site

This can be one of many valuable resources for monitoring new trends in internet marketing and web 2.0 technologies so as to keep up with a constantly evolving client base rapidly benefiting form new technologies and business models that may or may not adhere to contractual agreements with suppliers and other channel partners. 

Internet marketing and online sales is an extremely dynamic area that is constantly re-inventing itself and upgrading at a rate of almost once every 3-5 months.  Imagine a customer base of thousands of customers completely changing their business model 2-4 times per year. 

Channel Management - Less is More

Managing channel conflict for any consumer products is a major challenge.  This challenge can prove daunting if the supplier utilizes multiple distributors. 

Distributors allow a company to expand the horizontal breadth of their channel push, however they can also dilute the factual information available to assess and manage that same challenge.  In other words you can get much more leveraged bang for your buck, but you may loose the ability to monitor and control the channel.

Suppliers can often times become besieged by multiple requests from distributors looking to become a direct representative of the supplier.  Yet a supplier will leave profit on the table if they do not take more accounts direct themselves.  If they are prepared, organized and focused on providing service to multiple customers a distributor might not be needed.  If not, then a distributor can be a lifeline.

Distributors will compete with each other and this is where the channel conflict enters into the picture.  Serialize products can allow a supplier to keep up with what is actually happening in the channel.  However, if the product is not serialized controlling the channel with more than 2-3 distributors can be virtually impossible.

Cross channel cannibalization between the distributors and sometimes between the supplier and distributors can create a competitive landscape that will rapidly evaporate the dollar value of the products that are being sold.  In an unserialized situation the optimum number of distributors is 1 and with tight border control 1 per bordered region.

Inventory Reporting Analyst Position

I wanted to post this short term contract for some of my readers that may be interested, the contact details can be found at Position Title: 70052 - Project Coordinator I

Here is a copy of the posted job description:

 

This candidate will be an Inventory Reporting Analyst and team member of the Accessory Demand Planning and Purchasing forecasting team. The candidate will provide leadership in the development and production of accurate reporting and analysis of accessory on order, in-transit, stock shortages, and all other ad-hoc reporting. The candidate will be responsible for creating and maintaining daily/weekly/monthly templates to track accessory inventory. In addition to reporting, the candidate will provide analysis for stock balancing and other ad-hoc projects. The candidate will represent the team in communications with accessory suppliers in relation to inventory shipments and reporting needs. The candidate must be able to work with many disparate systems in the development and production of deliverables.


Minimum Qualifications: Must be detail oriented, skilled communicator, well organized, professional, and capable of multi-tasking in a fast paced environment. Must be proficient in MS Excel and MS Access or oracle database software (SQL) and powerpoint.

Friday, November 10, 2006

Sponsored Reader Promotion

As we are nearing the end of the week, we wanted to take sometime to thank our readers and pass along some information that might help you save money on a future vacation to Florida.

OrlandoFunTickets.com provides Disney World Tickets at a discount along with tickets to many other attractions and parks including Disney's Typhoon Lagoon and Blizzard Beach Water Parks, Universal Studios and more. 

Whether you are contemplating a trip during the season now or thinking about it at some point in the future, you might want to consider bookmarking this page for future reference so that you can find the discounts when you need them.

PrecisionPoint provides Self-Maintaining Business Warehouse Systems: No disconnected Cubes

PrecisionPoint offers Business Warehouse 3.0 claimed to be more scalable and supportive of the latest business intelligence suite of products from Microsoft including SQL Server 2005 and ProClarity acquired by Microsoft in June of 2006.  It also supports SharePoint Services and Office 2007.

PrecisionPoint formerly known as AnalystSoft Development offered up their new platform at EMEA Convergence 2006 in Germany.  They provide services for Sega Europe and TomTom International, the makers of popular GPS devices.

Their data warehouse service will function with Great Plains suite including CRM and Supply Chain, finance and Sales.  It also works with Axapta and Navision from Microsoft as well.

Kroger Warehouse Workers Want Strike? Threatening in the Meantime

Union Representatives from Kroger Company's Louisville, Kentucky warehouse distribution center threatened to walk out on Sunday.

That so happens to be the day that Kroger is planning to turn the operation over to Zenith Logistics which is part of a larger conglomerate of Verst Group Logistics and Transervice Logistics Inc out of Lake Success, New York.

The local Teamsters feel that the transfer will threaten job security for the workers there.

Transervice has stated that it is prepared to continue grocery delivery fulfillment in the advent of a strike.  Transervice would need to cover 140 Kroger stores serviced by the distribution center currently.  Kroger has over 2,500 stores in the US.

Time Share Warehouse Distribution

Could Warehouse distribution learn a thing or two from condominium timeshares for vacation properties?

I was reading a release relating to the history of fairfield resorts detailing how they changed the time share industry in 1991 providing customers with an allottment of points to be used in time share developments in many different places as opposed to the old system where a person would have to specify in advance how much time they would need in a single location.

It struck me that there are some similarities that could be applied to Warehouse Distribution space.  More companies are being required to temporarily hold products in warehouse space in varying locations around the world sometimes for limited amounts of time and this is coupled with a large supply of warehouse space going underutilized.

It might be more feasible for the warehouses to join in a cooperative environment to sell points for their space to be used by companies needing flexible arrangements.

This could help warehouses keep their operations funded and operating smoothly through periods of downturn while opening up new options for companies needing space that might otherwise be forced to enter into a long term fixed arrangement that is inflexible and does not cover their needs.

The missing component to this type of an arrangement is a company the size of Fairfield to pull enough warehouse space together under one holding company or at least under a cooperative such that the pool of available space would both be large enough, diverse enough, flexible enough and have trained personell ready to handle a quick upswing in temporary storage.

CellStar Obtains Extension of Motorola Distribution Agreement in Latin America

CellStar provided a press release yesterday indicating that it had again extended its distribution agreement with Motorola. 

A monthly agreement between the two companies kicked off in June 2006 and has been renewing monthly.  This contract will expire at the end of the year on December 31, 2006.

CellStar indicates that it is continuing to work with Motorola to complete new distribution agreements, presumably longer in term than a monthly renewal.

The temporary agreement comes in the middle of the Christmas season and before the year end reset for both companies.  It will be interesting to see how Motorola handles the agreement with CellStar a partner for more than a decade in wireless handsets.

Categorization of Products

Preceding my article titled Distributors capitalizing on Web Businesses have to Tech Up to Keep Up, I had set up my own store under this service. 

I've setup shopping carts before for businesses and have seen the projects spiral out of control and cost and I have to admit that I was fascinated by both the simplicity and very low price and the extraordinary final result of the store.

Setting up a store requires a methodical approach and focus on the best things and deals you can find.  I have just wrapped up a session where I re-organized and categorized my store so that it makes more sense.  I started with cameras at  my store.

I started with Cameras a sub category of consumer electronics.  Cameras were some of the first products that went into the store.

I reorganized the Camera section to categorize things by brand and by Mega pixels. 

Users do have the option to assign a single product three categories, so if someone happens to browse into brands they will find cameras by brand and they will possibly find the same camera in the 8.0 megapixel section and in the generic Camera section. 

For more information on setting up a store under this service you can check at our business website for Softduit.

We would be glad to help you or your company with your own online store.  You can set one up quickly and the rates start at $29.99 per month giving you full ecommerce capability.  You can take your first order in 30 minutes after setting things up, and choose from 700,000 products to stock your store.  I've set up this page to help anyone interested in the concept.

More Information on Stock Options

Trading in Stock Options can be a very risky investment option if you are un-informed and unpracticed in the business.  Getting good information, learning the right strategies and correct conditions to deploy these strategies are extremely important.

Furthermore, its not good enough to achieve the desired financial investment result.  A company that trades or holds investments or insurance in stock options must also account for those options correctly.

PowerOptions recently provided a release describing their new SmarSearchXL which provides investors with internet based data that can help identify the highest return option.  If you are interested in their stock options newsletter you can start to learn more about their services and tools that can help you navigate through the complex area of stock options.

Organized Crime Bar Code Scams & Money Laundering

Bar Code Scams are increasingly pointing towards the need for new technology to take over.  Last year a man was arrested after authorities had learned that he had stolen over $600,000 in Legos from Target and other stores over a three year period.

He didn't use the ploy of grabbing an item off the shelf and taking it to the returns desk to request a refund like a member of the Bush Team did not so long ago.

No instead he simply slapped a new barcode on the item and paid for it.  The new barcode triggered a much lower price to ring up and he would later sell the item on Ebay and make a fortune.  Picture the thief slapping a sticker with a bar code over top the old barcode and instead of paying $100 for an item, paying $19.99.

These scams are getting worse as organized crime is getting involved deploying teams of individuals to retailers.  Instead of the same person providing the sticker, buying it and selling it.

One person places the sticker.  A different person purchases the product and they then take the product to an organize unit that consolidates products and sells them online.

Not only are they robbing the retailer, but they are likely involved in Money Laundering of cash and possibly even using stolen identities to fund the purchase in the first place.

Distributors Capitalizing on Web Businesses have to Tech Up to Keep Up

Amazon.com in many ways has turned the distribution business in the US upside down possibly as much if nor more than Wal-Mart's amazing purchasing power.  The difference is that the impact of Amazon is still spreading out and Wal-Mart's impact is already built into the system.

I say this as I look at a new generation of online E-Commerce.  Business model 1.0 for E-Commerce held that a person would setup a store, go purchase products and start selling them.

Business model 1.5 provided that the business would prefer it if the distributor saved everyone some time trouble and money and shipped the product on behalf of the store owner directly to the end consumer whenever an order came into the system.  This was Amazon's contribution.  In the early days Amazon worked very hard to prove their legitimacy by establishing large warehouses and moving lots of books.  Can you remember those news stories about Amazon shipping some of the earliest Harry Potter books?

Well in between that time and now something happened on the internet.  It suddenly became much easier for anyone to setup a website, and millions of people did just that especially websites crafted as personal journals called a Web Log or Blog for short. 

With a weblog a person doesn't initially need to know much about web design.  They just write something, hit submit button kind of like sending an email, and their message is published to the internet.  If you are curious what a blog looks like, well you are reading one right now!

What does a blog have to do with Distribution?

Google and many companies made a fortune realizing that the masses could generate content for them day in and day out year long and advertising could be thrown in there and you have a virtually renewable source of content, advertising, advertising dollars and readers of the content.

So what happens if you mix the Blogging Model with the Amazon 1.5 business model?

Online E-Commerce 2.0

In online E-Commerce 2.0 one single company does not sell everything to everybody.  Instead a company establishes a website with a e-commerce store front generating tool.  They set up partnership with major product suppliers and distributors receiving data feeds for products and prices.  They set up fulfillment relationships as well to have the distributors and suppliers drop ship the product direct to consumers providing tracking information detail as well.  They outsource customer support functions to best in class providers and then they open the door to the masses.   |  Wait they don't open the door to the consumer masses.  No they open the door to the masses of people that want to open their own store and sell a niche of products to consumers. 

Setting up a store through this process can be done in less than 30 minutes and within an hour a person can have products online and for sale at prices that are competitive with a major retailer.

Here's a situational example:

Jeanne Noll setup a online store.  She's not a lost member of the Sam Walton family.  She is a standup comic, Stand up Comedian and mother and is a budding young entrepreneur.

She set up a store called Rosie's Place

Check out Rose's Place!

The store is outfitted with a number of products that Jeanne knows and understands and will attract shoppers like herself.

Her prices are good.  The store design is excellent.  Its secure and she has world class service and support backing her up along the way. It's a great example of how to setup an organize an Online Store.

Distributors that are going to survive the rollout of Online E-Commerce 2.0 around the world are going to have to build out a very intelligent and automated business.  These tools and services are available in North America now.  They are rapidly spreading all around the world.

What will you do to prepare for this business development?

 

Its a  great little store that offers a great selection of Books for children, Baby items, some great gift ideas for the holidays and more.

Jeanne is well on her way to building a great business

Don't miss her performances either if you are in the New Jersey or NYC.  Buy something from her store now, and keep the receipt it will probably be worth a fortune after she makes it big in comedy.  In the meantime there's no better way to show her a little support than by visiting her store.

Wednesday, November 08, 2006

Business Benefit from Bloggers covering their Press Releases

Many companies release Press Releases through organizations that specialize in disseminating that release generically to news agencies.  These agencies will typically rate the press release to determin how news worthy it is. 

On occassion a business will benefit from the release as its picked up and written about for online or print publications.  Even more rarely the company may have their website mentioned in the article or placed in the online article in a way that the reader can click through to the business site and potentially become a customer.

Blogitive, a USWeb company, specializes in taking those press releases and funnelling them out to Bloggers, as indicated in their own web release on the topic.  Bloggers then review the press release and write up an article around the press release.  Blogitive works for the company that provided the press release and they enable that company to select keywords that can be associated with a hyperlink back to the companies website or page of choice. 

This benefits the company by

  1. Putting the Press release into greater circulation
  2. Providing a Reciprocal Link back to the company, which will increase the companies Google PageRank which will deliver more Natural Search Visitors
  3. Provides the link and the information in a contextual setting that can be picked up by other news organizations with the additional and objective analysis that comes with the blog articles.

Bloggers receive a nominal fee of $5 which allows them to   Make Money Online blogging.  They must insert the article in between two other articles that are not press release covered or financially incented.

Tuesday, November 07, 2006

FedEx Raises Air Cargo Rates by 5.5%, Second increase this year

FedEx announced that they will raise Air Cargo rates by 5.5% by January 1, 2007.  They will also change their pricing on packages that are three cubic feet or larger.

FedEx is one of the leading air cargo providers in the industry.

FedEx ground rates will also increase later this year and fuel surcharges will kick in.  FedEx plans on an average increase in domestic express shipping rates of 5.5% also, but this will be offset by a 2 percent reduction in fuel surcharges for a net change (increase) of 3.5%.