It has been a while since I have written an entry. The company has been keeping me real busy. That is good news. I want to be busy. I want the pressure to be on. That means we are growing. It can be stressful and frustrating at times but that comes with the package.
Right now we are selling product in the USA, Canada, The Caribbean, England, South America, and Australia. To make that happen we have to have distribution partners to receive the product, ship it to the retail locations and get the product set up correctly in a display, clip strip, bin, or on a peg. We handle some of the smaller distribution to Amazon or to Mom and Pop hardware stores around the USA but for the big box retailers and international we need partners. Many aspiring inventors, as I once did, have a foggy idea of what happens after you get a purchase order. In the past I thought it would be a 1, 2, 3, process. Get interest for the item, deliver the item, and get paid for the item. If it were only that simple.
First we have to produce the product correctly and on time. This is a whole other challenge and you can see my experiences with this in my previous blogs. Once you have production quality and capacity to handle large orders now comes the next phase. I am not even going to get into how to meet the buyers and get the orders. That is another topic for a later blog. We are talking about what happens after the order is in and you have delivered the product to the distributor or store set company who is going to get it into the stores.
What I have just learned is that you have to have a clear agreement with your distributor about how the product is going to roll out into the stores. After you have negotiated the price, your job is not done. Most likely you are rolling out a new product that the customer has never seen before and they need to be educated about the new product otherwise they will walk right on by it in the store and that will be the only order you ever receive from that retailer. You need to merchandise it in a way that gets their attention and tells them why it is better within 2-5 seconds. It is highly recommended that you hire an expert to help you with this. We hired a great company who helped us design an award winning display. You are only going to get one shot at this. Now, once you have this excellent packaging, display, product resource videos, or whatever you are using to get your message across, you have to make sure that whoever is setting up your product in the store is going to set it up correctly. Try a few stores out with no education merchandising. Most likely the product will collect dust even though it might be a great product.
Don’t just assume that everyone is going to care about your one new amazing product. Distributors are real busy dealing with the hundreds or thousands of other products they are managing in the same and other locations. They are currently making a lot of money on those tried and tested products. They are now taking a chance by putting your product in the store. Don’t be afraid to go check everything out and report back to them. They are a large operation with a lot of moving parts and have just as much trouble keeping everything in order as you do. Communication is key and so is following up on everything. Check into it. Ask questions and go see what is going on out there. You can’t understand what is going on from your office. Remember that the distributor is getting a piece of the pie for their services and you should hold them accountable for what they are getting paid to do. The retailer is busy getting the customers into the store, and helping them once they are there. They are relying on you to get the product produced, delivered, and set up.
Be patient but don’t sit around expecting everything to just work itself out. You have to be involved and manage the whole process from delivery to sale. Once you are in the store and you figure out what works to get the sales, than repeat, repeat, repeat. Hopefully you will figure it out before the retailer pulls the plug. They will only give you a small window to prove that your product will sell through.
This is a work in progress for me. I am learning this step by step through experience. I was warned that this was going to be a difficult task and those wise words were correct. I love this process though. I am literally bringing a dream to life. A 9-5 would be much easier but that is not what my Heart called me to do. Stay tuned for my next blog. I plan on talking about how to meet the buyers and get the orders.
When I first started to plan my entry into this intimidating world of big box retailers I was overwhelmed by the stories of how difficult it is to work with them. I spoke with numerous people and companies who have sold product into them at some point in the past. The majority of them told horror stories of how they got screwed somehow. This influenced me to target the small retailers first for my market entrance since I could easily communicate with them and have some transparency without being blindsided.
As soon as we launched our innovative adjustable barrel bolt lock products into the market, most of the large retailers of the world approached us and expressed their interest to carry our items. How could I refuse? This wasn't part of the plan though. I didn't want to experience the nightmares I was told about but I had to at least give it a try.
So, I began the long journey of price and packaging negations which I have found can take 6 to 18 months. Don't think you are going to make a ton of money real fast just because they have 1000 stores. So, if you are a start-up spending investor dollar, and you are targeting the large retailers, you better have at least 2 years of operational cost in the bank or be continuously raising capital. If you don’t, you will run out of money before your sales revenue kicks in to keep the ship afloat. I had to raise more money to bridge this gap. If you have a great product that the market wants and good financial supporters, you should have no problem. If one of these two is lacking than you will be in trouble when you reach that canyon that must be crossed.
I have been through the gauntlet a few times now in setting up an account to sell product to these large retailers and I realize that their requirements are super strict for good reasons. They have huge operations to manage and every system is in place to keep as much order as possible during the process which is often worldwide and can become chaotic quickly unless managed well. In order to play with the big boys or girls, you have to step your game up. I thought those stories I was told were true but they are distorted. These stories were often told by individuals who were not willing to elevate their impeccability in their production, quality, delivery, and paperwork. If you want to do business with billion dollar companies, than you must upgrade the way you do business to harmonize with their level. If you are not willing to do that because of laziness, inertia, entropy or fear, than it is not going to work. I am learning this real quick and making the steps necessary to meet their requirements. They do give you a shot in the beginning to step your game up knowing that you will need to adjust as a new vendor. There is a small window that they open for a new company to demonstrate that you are willing to keep order and harmony in your supply chain and paperwork.
I realize that this outcome is in my hands. I can’t blame the big retailers if they don’t want to do business with me because I am not willing to organize my organization. I guess that is why it is called an organization because in order for a company to work it must be organized constantly. I have to take responsibility and tune our company to play our instrument in harmony with their symphony. They are helping me grow into a top notch respected vendor that will be very successful in the market. These large companies were small once and only were able to grow because of the detailed systems they put into place to manage their huge operations. They are my teachers and I am glad to have the lessons. Thanks Big Box. It is my pleasure to learn from you.
Co-Founder & CEO, Ajustco
AjustLock’s official Year 1 in the market has come to a close as of April 1st 2014. What a wild ride! You just can’t predict what will happen to a start-up. We thought we would be in a totally different place at this time. We weren't supposed to start having conversations with large retailers until the middle of year 2. We are gearing up to have product into 500+ big box stores by September 2014. The original plan was to approach all of the small retailers for the first 18 months and we had to switch gears quickly to respond appropriately to the demand of the market.
This little piece of metal has taken us to Australia, China, Hong Kong, Toronto, Germany, and all over the US just in year One. Who knows where year 2 will take us. It is very spontaneous. At some point this year I will have to make my 4th trip to China to oversee some of the larger orders we have on the schedule. This is becoming an international company which wasn't a part of the original plan. We just need to remain open to allowing the worldwide market to tell us what it wants. If every country in the world wants our innovative adjustable barrel bolt locks than we will manufacture and deliver them.
A lot of people have been telling me that Ajustco is moving very quickly but since I am in the daily grind it seems like everything is moving real slow. Especially with the pace of the large retailers. From the day they say they want to carry our world's first adjustable catch bot lock, AjustLock products to the day we have it on their shelf is anywhere from 6-24 months. There is a huge process that we need to go through with each retailer to become a vendor and sell product to them as a manufacturer/supplier. They are billion dollar public companies and they are precise with their paperwork.
It is a lot of hard work but I am enjoying the journey. Let’s see what year 2 has in store for us. We hope to see you at one of the many trade-show we will be attending. You can see our events schedule on our website. Year 2 here we come!
Co-Founder & CEO, Ajustco
Let’s talk about Product development. This is such an enigma to the inexperienced, which I am moving away from toward its opposite. Only through trial and error am I learning to manage this process efficiently. The large corporations of the world have the luxury of years of experience, endless funds, and highly skilled teams to materialize a thought into a sketch and then into a quality product ready for the store shelves.
I have not had such a luxury. I just finished up my 3rd trip to China all in less than 12 months. This latest trip lasted 3 weeks and was the most fruitful yet regarding our product development. I was able to rigorously test our product, find its weaknesses and then work with the engineers here to perfect our lock. The Ajustlock now not only is able to adjust to fluctuations which is its key differentiator but it is also now as strong and in some cases stronger than the traditional barrel bolt lock.
Producing a product in China is a huge challenge for a foreigner because of the language/cultural differences, amongst other reasons. Another challenge is getting the attention of the supplier to assist in the development of the product. This is not so easy when you are the new guy with a new product that doesn’t have millions in sales yet. Why does he want to invest significant time and resources in my new idea when he has multiple clients spending huge dollars on a free flowing supply chain? My product is just a potential revenue stream to him. And since I am a foreigner it is even harder to gain his respect.
On this trip I did just this. Travelling here multiple times is a huge commitment and holds a lot of weight. I demonstrated to my supplier that I am very serious about our company, our product, and our future sales which is beginning to show fruit that he can see and smell. I have learned that I need to invest time as a start up to show that I am not just an attempt to manifest a dream. I have shown my supplier that I have a strong plan, the financial backers, and the right team who is driven to get past all of the barriers that all startups face in their first 3 years in business.
I can now return to New York with confidence that my supplier is on my team and very interested in making sure I have quality products that the major retailers will approve and the consumers will be very satisfied with. My first supplier was not able to make our product to our specifications and it has taken 3 months for our new supplier to perfect our units. All in all it took around 1 year to source and secure a successful relationship with a foreign supplier. Now that I have the relationship established I could develop and roll out a new hardware product in 2-3 months. Other more complicated products will take much longer of course.
In the end, I realize that gaining the respect and interest from any partner is worth way more than just a large order. Money talks in business but money coupled with transparent communication and confidence is a lot louder than money alone. Investing in relationships is priceless. Don’t be fooled by thinking you can easily find a factory in China to produce your new product. Learn from my experience and save yourself time and money. Do your research first and don’t stop until you get everything to the level you know it needs to be. So many times on this road I have heard people tell me that we don’t need to add more or improve more. They are asking me to settle for less than what I know is required. I will not settle, and I will fight laziness wherever I find it to maintain the level of quality I know is necessary for success.
Jason Stile, co-founder of Ajustco
When we first launched, I never would have thought that AjustLock would have us travelling to Australia but when the country’s largest retailers and distributors want your product, it’s a good idea to make it happen. In October 2013 we went down under and interviewed the top hardware distributors. We choose LSC as our local supplier covering all of Australia and New Zealand.
LSC, or Locksmith Supply Company, started out as a small hardware store back in 1926 specializing in keys and locks. They are now the primary supplier to local professional locksmiths and also have a large number of SKU’s in major hardware chains such as Masters, and Mitre 10. We choose LSC based on numerous factors including the care with which they provide to their clients brands such as Abus and Lockwood, which are strong brands in Australia. We are excited to work with them with our innovative adjustable slide bolt lock and other barrel bolt lock products and look forward to a great future partnership for years to come.
After accomplishing our mission in Melbourne, Arman and I headed over to Hong Kong with a ferry up to Guangzhou. The Canton fair is tremendous. We met over 10 factories that produce our type of barrel bolt product. As a company that produces product for major retailers we see how vital it is to visit the country where we are producing our products. We need to understand the entire process and who is involved.
We spent around 1 week renting a taxi for the day and driving 6-12 hours a day visiting every factory possible. Shenzhen, which is a city 30 minutes from Hong Kong, is known for their printing and cardboard displays. We met 2 great potentials there. A lot of people from the US were telling us that we were only going to find cheap flimsy cardboard in China. That is so far from the truth. You get what you pay for. The factories had cheap and sturdy cardboard available. It is a matter of choice and price.
Our next stop was to fly up to Ningbo where our current factory is. We spent a little more than 1 week there. I love Ningbo. Most of the city is brand new and still growing. The people are friendly and happy. You can see people practicing Tai Chi with swords in the morning all over and they are dancing outside for exercise in the evening. I spent days in a taxi driving from factory to factory. We were all over Ningbo, Hangzhou, and surrounding areas. It is great to sit down with the factory owners and get a quote right on the spot. You can see for yourself if the factory is clean, organized, and producing good quality products. It is easy to spot the sloppy factories like it is easy to spot a sloppy restaurant in the US. You can see a lot by just looking at the small details.
At the end of our trip we spent 2 days in Hong Kong. It is a must see city. It is like New York but with hills like San Francisco, a really friendly crowd and no frigid winters.
All in All, if you want to have a quality product made in China you have to oversee the whole process yourself. Nobody else is going to care about your project more than you. To all of the people who are involved with your project, it is just one more project to them. But to you, it is THE PROJECT. Don’t be deluded into thinking that you can set it and forget it. You need to manage the whole process from start to finish if you want to have any chance to succeed. Remember that the odds are against you so you have to push extra hard to get traction and reach your goals.
Arman and I just finished up our week long journey in Melbourne Australia which was very productive. We visited the warehouses of the major hardware distributors and suppliers in the country. We also sat down with two major buyers in our category who expressed serious interest in Ajustlock, potentially introducing our innovation into the market via branded quarter pallet displays across numerous big box hardware stores (NOTE: These deals are not done yet; they are in active negotiations via our exclusive Australian distributor, LSC). What an amazing country with beautiful beaches. The people are very friendly and most Australians earn good incomes. The DIY market here is thriving. The only difference is that their popular item is a pad bolt instead of a barrel bolt.
We realize how important it is to be present in the market of adjustable barrel bolt and slide bolt lock that we are entering. We need to meet the key players face to face for initial negotiations. These kind of deals cannot be accomplished properly via Skype. They can be maintained with Skype. We spent some time researching and investigating into the local suppliers and deciding who would be the best player to bring us in the large retailer.
This is the same as lifting the hood of a car and learning what all the parts do and how it works. Now we have a clear understanding of how this market operates and we have a plan in place to be in every store in the next 90 days. Current tasks are to alter our packaging to reflect the market. They use MM in place of inches and we need to have a local contact number for customer inquiries or returns.
There are so many parts to get this process in motion. Meeting the buyers of the retail chains, choosing a supplier, negotiating pricing, customizing packaging, artwork for the merchandising displays, placing the order with our factory, shipping and logistics, payment, and more talks all have to come together synchronously to activate just one strong deal in this one country. We have to repeat this process in many countries including our home base (USA). We sure do have our hands full but we love it. We are currently in China so stay tuned for my next blog update about our China trip which is based on managing production.
Co-Founder & CEO, Ajustco