Date: Fri, 18 Apr 1997 17:04:28 -0700 (MST) From: Terry Lambert <terry@lambert.org> To: jkh@time.cdrom.com (Jordan K. Hubbard) Cc: terry@lambert.org, steve@visint.co.uk, jbryant@tfs.net, freebsd-chat@freebsd.org Subject: Re: On Holy Wars, and a Plea for Peace [sorry Danny, wherever you are, but the title fits]... Message-ID: <199704190004.RAA03453@phaeton.artisoft.com> In-Reply-To: <3131.861400721@time.cdrom.com> from "Jordan K. Hubbard" at Apr 18, 97 02:58:41 pm
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> [Redirected to -chat; I don't think this is quite -hackers material now]
>
> > Doesn't Walnut Creek CDROM have a GIS?!? I don't know how a modern
> > sales organization could prosper without one...
>
> I don't own a sales hat, so you'll first have to tell me what a "GIS"
> is before I can answer that. :-)
Geographic Information System. It allows you to track markets by
location and density, and to target locations where population is
high but density is low. That way you can have average sales
everywhere instead of high sales some places... er, wait a minute...
8-).
> > Is this a "stocking fee" (illegal) or is it a consignment agreement
> > (legal, but not the way you want to sell, if you sell by stuffing
> > the channel and praying for rain...)? I could see Egghead wanting
>
> Well, this info is being relayed 2nd-hand here (through me) so I may
> not remember all the details correctly, but essentially they want
> credits in that amount (e.g. 50K worth of stock) plus up-front money
> to market it. In other words, WC would need to pay the costs of
> printing any store advertisements (and there could be quite a number
> of stores involved) plus newspaper adverts and such. On top of this,
> they generally want a liberal return policy which allows them to
> return stock in practically any condition (including downright
> destroyed) for *full* credit, any outstanding invoices simply not
> being paid until said credit is given. In other words, they make it
> damn rough for anyone not willing to risk close-to-6-figure amounts.
> I really don't know what the legalities are, but clearly there's some
> fairly broad loophole which allows this.
I'm pretty sure that they are talking about consignment, then, where
you front the money for the product and the shipping, and if they
sell it they pay you, and if they don't, you pay return costs or
destruction costs, whichever you want. Similar to book sales to
bookstores: they rip the cover off and send it back, and are supposed
to destroy the rest of the book.
I don't know if the collateral marketing agreemesnts are really a
requirement, or a nice thing to get them to push the product instead
of just selling it if someone asks for it. Part of the amount may
be a "catalog fee", where there is a fee charged to have your product
published as "available" in their catalog, and it's probably not
required either, but if the dealers don't know about the product,
then they aren't going to ask for it, either.
The Apple approach to this problem was to create "grass-roots" demand
for the product, and avoid the intermediate marketing fees. Guy
Kawasaki called this "market pull instead of market push" and it
dealt with servicing channel requests, not jamming stuff into the
channel. Part of this is overcoming the "popcorn product" issue...
Walnut Creek sells products that are generally included as "popcorn"
("if you buy the movie ticket, you're going to need popcorn") that
is bundled in with another product.
If I had a choice, I go the Apple route, or I'd "popcorn" the product.
For example, if FreeBSD could modify existing partitions ala partition
magic safely and run reliably (LBA support, VFATFS/VFAT32 support that
didn't trash the rest of the drive), and could be offered as a "popcorn"
product, you might get "USA Flex" (the guys on the back of Computer
Shopper) to bundle the thing with their machines for some small margin
as an "also ran" or "alternate" OS. As "popcorn".
You know that Tony Overfield is one of the guys who did Dell UNIX at
Dell, right? That should lend a bit of creedence to his requests
for getting the memory size and disk geometries from the BIOS... 8-).
Speaking of people whose opinions should be listened to, you know that
A Joseph Koshy of HP in India is the guy who did the X stuff for
UnixWare (about the only thing done really, really well in it, apart
from the VM which the rest of the kernel shamelessly underutilized)?
Another potential comarketing idea is the "free software" scenario,
as in the floppy disks that came with one disk with some kind of
software on it. It had two functions (1) it was "value add" that could
be added cheaply (the market demanded the disks be formated, and you
might as well duplicate data at the same time) and (2) it created
more demand for the initial product. For instance, consider if you
could produce a "low end" FreeBSD that could fit in 100M. If you could,
you could offer it to Syquest and IOmega for their 5/10 packs. It's
worth the per-disk margin or more to these people: (A) the installed
product is a "freebee"; you can't sell them another "tools" disk, like
you did with the "included" cartridge to encourage them to buy media,
and you need something, and (B) If the person does not erase the disk,
they have just increased the potential need for another disk by one
unit by pre-"using up" one of the units the customer bought. Just
like the "free software" gimmick on floppies.
Barring that, the typical approach for CDROM sales is to shovel all
the titles you have into the channel at a high enough margin that if
only a percentage sells, you get a profit. So you end up in "budgo"
channels, and they operate on consignment unless you make up for it
to them by providing volume, and even then, if you want to add a title
that's not in the original contract, well, you're screwed back to
square one.
I don't think FreeBSD CDROMs are in the same market category as most
of WC's other products. I think they can be sold through easier if
they are easier to deal with (install-wise). One big help? A Win-based
installer and an Autorun.inf file to pop it up when they stuff in the
CDROM. Click. Click. Installing FreeBSD, please wait...
> The situation is a little more clear-cut if you're talking about
> someone like Macy's. As our sales mgr said (who used to deal with
> Macy's regularly), they've bankrupted many a small business by
> demanding significant portions of stock up-front, only to return much
> of the merchandise in soiled and unsaleable condition, demanding a
> full-refund before paying out any of their outstanding invoices.
> They'll also pull a number whereby they'll agree to sell your product
> in some corner of the store but ONLY if you pay for all furniture,
> track lighting, counters AND the salaries of the folks who work behind
> them. I was frankly astounded at this - I had no idea that the "big
> boys" had the clout to ram "deals" like this down vendor throats.
Well, check their D&B's -- they are probably screwed royally. Better
to not deal with them [anticipating the question: D&B's: Dunn and
Bradstreet number, a commercial credit identification system that a
vendor can use to establish a line of credit with a supplier in place
of bank credit references].
> > FreeBSD is (essentially) a UNIX-clone product... have you contacted
> > the UNIX products division of Ingram Micro-D?
>
> Heh, we've been trying to get in bed with Ingram for 4 years now. :-{
Hmmm. I know the vice president in charge of the UNIX products division;
we went bar-diving with the Australian Navy at Uniforum in Lessee, San
Francisco in 90 (91? I can't remember which one was in DC). I'll ask;
are you sure you've been dealing with the UNIX Products Division, or have
you been pushing it as a PC OS? He may be cold to the idea given the
current install, though... 8-(.
Regards,
Terry Lambert
terry@lambert.org
---
Any opinions in this posting are my own and not those of my present
or previous employers.
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