Everyone Wants Their Slice of the Pie

Everyone wants their cut of the profits.  However making it in America increases the cost of production and in turn lessens the amount of profit for everyone.  This can make negotiating wholesale prices tricky for us. 

The most important thing to always consider is what consumers can and are willing to pay for the product.  We have to make sure that we keep the cost low enough to be affordable but high enough to cover expenses.  Simple economics yes, but when you factor in the higher prices for goods and services stateside it leaves little wiggle room and can kill potential deals.

When we started selling the St. Helens model in 2008 we thought $49.95 was a fair price.  Originally we thought $39.95 but after factoring all the elements realized that we couldn't afford to operate at that price.  The $49.95 price did not include shipping which runs upwards of $15.  That alone inflated the final sales price to $64.95.  So in May of 2010 I decided we'd try to include the shipping into the price and make all RocLok's an easy $64.95.

The change not only helped our customers feel better about their purchases but it allowed us to offer "keystone" pricing to our vendors.  Keystone as we learned early on is 50% margin or greater.  With our prior prices there as no way of accomplishing this goal.  Some catalog companies required Keystone plus 20% which definitely wasn't going to happen.  Needless to say we weren't sure what we where going to do to get some traction in the marketplace.

From day one we knew we wanted to try and keep as much of the production and raw material sourcing as local as possible.  This meant and continues to mean higher prices on everything from the plastic we use in the injection molding to the tape we use on our packages. However instead of taking the greedy way and having our product mass produced overseas for pennies on the dollar and pocketing the proceeds, we have remained stead fast in our resolve whether that be to the detriment of our financial state or not.

Recently requests have increased from vendors throughout the United States and Internationally wanting to offer our product to their customers. Of course we love this new attention but sometimes it is disheartening to get excited about starting a new business relationship and finding out that we can't make a deal because of margins.  For example our margins are such that we can not afford to bring on a Manufacturer Representatives. 

A Manufacturer Representatives aids as the go between person, introducing your products to large big box chains like The Home Depot for example.  The theory is that they have established a good working relationship with buyers in these chains and have pull as to which products get noticed and ultimately sold in the store.  Obviously they want to be paid for their services as well they should be.  However if the margin is not big enough to begin with bringing a third cut into the mix just won't work.  Thus we haven't had the luxury of having a Manufacturer Rep on team RocLok.

Thankfully with some strategic placement at various trade shows and a lot of luck, our product has garnered the attention of  some large vendors and we have been able to nurture our own relationships.  It definitely wasn't a quick process but doing it ourselves allowed us to learn which has to count for something. I think that grow slowly will prove beneficial to the longevity of the business in the end but it is awfully painful on our bank account so far. They say "A journey of a thousand miles begins with a single step," so if we keep putting one foot in front of the other someday we're bound to get there... right?

Rock Through the Window

Driving a billboard around town attracts attention.  Sometimes good, sometimes well...

Yesterday we stopped off at the gas station. Here in Oregon we are not allowed by law to pump our our fuel. As usual we let the gentleman know how much we needed and a conversation ensued about what a RocLok was. Here's the interesting part, instead of wanting to know more about our product the attendant's immediate comment was "how about gluing the rock to the top of the car so you don't get locked out of your vehicle?"  Obviously meant as sarcasm I made the mistake of engaging, joking that having a rock on the hood of your car might takes away from the hiding aspect of the product. To which he retorted

"yeah, and they would probably take it off and throw it through the window!" 

The throw it through the window comment seems to be by far the thing we hear the most from people when they first see the RocLok. When people first started coining this phrase I admit it irritated me. Personally I've never had a house window broken out by a rock and don't often hear about cat burglars running around town breaking into homes with rocks. Still this among all other possible comments is the most popular, hands down! So I've come to embrace it and adopted the old if you can't beat them join them theory. 

However, hearing this yesterday I started to think, what does this answer say about people's psyche's? Where does this reluctance to accept something new come from? I'm guilty of it and from the numerous trade show appearances we've made over the years, it seems most people are.  What compels us to want to run away or hide behind sarcasm instead of taking 2 mins to learn about something new?

For me, I think it is that deep fear of being sold to.  I fear that if I learn about something, I might be "tricked" into buying it. So really I guess it's my own fear about lacking  the will power not to purchase an item that drives my reaction. 

Now that the roles are reversed I have to remember that everyone has their own reason to be adverse to learning about a new product.  Perhaps that is why television sales are so successful.  No interaction with another person, no fear of having to say no, or getting into a debate about why you don't need the thing they are trying to sell you. You can make an "informed decision" in your pajamas from the security of your own home. Even better if the sales person on the tube annoys you, just change the channel!

Still it's hard to accept this truth when you are trying to grab attention for your new product  If you push too hard people push back with reasons why they don't need it, if you don't push enough noone knows you exist.  It's really a balancing act and after 3 years of learning what works and what doesn't I've found out first hand what an art form sales and marketing really is. All I know is that instead of getting frustrated when someone suggests our rocks should be shaped like a dog turd, or annoyed every time someone proudly announces "they'll just steal my rock!" I just have to remember that they are just deflecting their discomfort with being sold to and it has nothing to do with the merit of my product.  At least that is what I'll keep telling myself.