Fred,
Benchmade has a wonderful business model right now. My communications with Les are confidential and I will not divulge the content or even elude to what we have conversed about. What I can say is that Les has spent a huge amount of his own money and resources to get Benchmade to where it is today. I truly admire him for that and he and I both went through a very similar experience at the same time. He ended up closing Pacific Cutlery and moving to Oregon to start Benchmade. What he has accomplished is nothing short of exemplary.
A few really minor and quick changes to their policy on distribution will make a huge impact on their future. The numbers don't lie folks. 11% of all knives over $50 are sold on the Internet as of last December. That was only 2% 3 years ago and it is expected to be 28% by the end of next year and possibly as high as 50% in 5 years.
A few proactive steps in the right direction will mean a huge difference in his business. He knows it, I know it, the problem is knowing how to implement it and more importantly when.
One thing is for certain. Not one knife manufacturer, not one, has taken the appropriate steps to insure their future with Internet dealers. There are a few who are listening and don't have problems with Internet dealers at all. There are a few others who in no way differentiate an Interment dealer from any other dealer and they will have a few bumps in the road as the market grows but not nearly as much as those companies who have specifically targeted the Internet knife dealers as corporate enemy #1.
I have a 20 or so page plan that any manufacturer, knife maker or not, can implement and see results over night. But who am I, right?
Well let's just say that I have seen this very subject in another industry and I watched intently as the events unfolded. There are ways to make dealers your friend and there are ways to get them to do what you want them to do. Amazingly not one company in our industry is aware of what is going on in other industries. If they are it sure as hell is not evidenced by their actions.
It would be a win-win situation for all involved to work on this together. Only 2 companies to date have taken an interest in my ideas. Both do not have the problems experienced by (Insert name here).
I could write a book on this subject but right now I will just entertain doing seminars at each business that wishes to look into what I have to offer. The key is that you can not punish dealers for not doing what you want them to do, but you can reward those that do what you want them to do.
If you punish a dealer because his prices are too low then what you will get is a dealer who will keep his prices low just to piss you off. He may even go lower. This may not seem a wise way to handle a situation but keep in mind you are not dealing with a "normal" dealer. The Internet is a breeding ground for overnight start ups and you will get all kinds of dealers and many are going to be VERY unpredictable. Someone paying $49.95 for "Internet Tool Box" will have delusions of making killer buck and when they exhaust there resources they will dump there inventory. Others will operate out of their home with no overhead and be happy making $2,000 a month in profit. Others even still will invest in DB driven web sites and will play with dynamic pricing schemes to determine a products market price and stick with what makes it move. If one product moves at a 12% margin and another moves fine at a 50% margin then that will be the price. Deal with it or develop a better strategy that takes the Internet dealers unique situation into account
Keep in mind that several Internet dealers have been on the net longer than any knife manufacturer has. So they know the ropes and the manufacturers are trying to learn them only now. The dealers actually have the advantage here and the manufacturers feel vulnerable. How they proceed is up to them but one thing is for certain; They will be scrutinized and the Internet, and sites like this in particular, provide the perfect pulpit from which analyze or be analyzed. And if you not careful, if will feel more like being "anal"yzed.
Stay Tuned as it is about to get very interesting.......
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Best Regards,
Mike Turber
BladeForums Site Owner and Administrator
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