Well, it's Tech Tuesday during Retailer Week, so what else could we talk about but selling online? Clearly MB&F is focused on leveraging the internet as much as possible. Without the internet, we would never have gotten to where we are. It is the single biggest factor that allows little guys like us with no money to compete with big brands. So, it may seem obvious that we should be selling the watches online. Well, here are some of the reasons we don't.
The biggest is that people need to see the watches. There is nothing like an MB&F. Show me a round watch and give me its dimensions and I will have a pretty good idea of how it looks in person and how it will look on my wrist. But, if I give you the dimensions of HM4, you still will have absolutely no clue what the piece really looks like. For a $1580 watch, you might take the risk. At $158,000, the number of people willing to take that risk is certainly not enough to build a business on.
Also our retailers provide marketing and education. We are pretty good at getting the word out about our watches given our limited budget, but we are far from well-known. Most customers who walk into the retail store have never heard of MB&F. It is, in fact, targeted marketing that is very similar to the internet. A point-of-sale provides a great opportunity to educate customers who have already signaled an interest in watches and their behavior can be tracked through the store (and sometimes after if they stay in touch with the sales people).
Another great function of retailers is to cut down delivery times. Here is how our deliveries work: we take an order from a retailer, provide an estimated delivery date usually between 4-12 weeks depending on the piece, and then get paid by the retailer either shortly before or shortly after we deliver. This helps us with our cash-flow as we get paid close to production. For a customer, they can walk into the store, buy the watch from the store's stock, and go home with it that day. If we were to sell online, we would either have to produce in advance in anticipation of sales and risk major cash flow issues, or have delivery times of between 4-12 weeks per sale. I don't know about you, but when I want a watch, I want it NOW!
Of course there are a lot of other reasons why selling online is difficult with such a product, but those are a few of the big ones.
Tomorrow I'll be back to profile our Mexican retailer, Berger Joyeros, and give a fun story of my first days with MB&F.