View Poll Results: What should our new sales model be?
Keep the price at $500, sometimes be slower to respond
19
14.07%
Set the price at $600, pay more staff, allow group buys at $500
113
83.70%
Set up a few dealers, let them set the selling price
3
2.22%
Voters: 135. You may not vote on this poll
A Dilemma
01-26-2004, 10:20 PM
#1
Forum Vendor
Thread Starter
A Dilemma
I am writing this to solicit your input as customers, and as my friends on this forum.
When we first started our project to build the Canzoomer Tuning Computers, we had some specific goals in mind:
1) I personally decided to keep my car, not take Mazda up on the buyback offer, and to spend up to $5,000 of my personal money to design and build and install what was needed to get back at least the missing power.
Mazda had claimed that we were missing 9HP ( 238 versus 247).
I tested the car, as did many others, and we believe the real number is more like 25-30HP. We see the RX-8, in stock configuration, in North America, as making about 220-225 horspower at the crank, and about 175HP at the rear wheels.
My goal was to simply get back the lost power.
2) Along the way i discussed what I was doing on these forums, and a considerable amount of interest developed among readers and other owners.
As I achieved promising results about a dozen people contacted me and asked if what I was doing could be provided for their cars too.
So, I set out to design a device that would be :
a) Easy to install
b) Safe to use
c) Easy to remove for emissions testing or dealer service/repairs
d) Cost no more than the $500 refund we were getting from Mazda.
e) Provide at least a 20 to 25HP gain.
We developed this, sourced the parts, designed the components, and developed a budget whereby we could do this. I did not consider it "work" nor did I intend to profit from it.
At that point it was still just a hobby activity, and I did not need to show a profit. It took some time, but not too unreasonable an amount, and there was a definite end of the process in front of me.
Then the numbers grew... and grew.. and grew..
Pretty soon we had over 100 orders. Then 200, 300 and on..
Dealers/aftermarket vendors and other commercial entities started calling, and wanted to buy our devices wholesale, so they could resell these to their customers.
They asked us what their wholesale price would be on larger orders.
We had to answer "ZERO" as we were only making about $40 a unit at that point, and that is not counting my labour, dyno time costs, or anything for my partner and friends who had helped me to develop this.
At the same time we were starting to receive orders, deposits, and it started to become a major commercial undertaking.
We were working about 1/4 of our office hours on "Canzoomer stuff".
Simply handling the order sheets, emails, phone calls, parts orders, building and testing requirements, billing, shipping, doing tech support iss eating up all my spare time. Like now, for instance, where I have spent the last 3 hours working on this.
Last week I had to go out of town for a few days, with only limited email access, and the questions and requests built up steadily.
We decided that the smart thing to do would be to sell the product to these various commercial dealers, and they would handle the retail orders, and we would only have to deal with perhaps 6 to 10 customers.
We would set up commercial accounts for them, and invoice on terms.
So, we announced in the middel of December tht effective Jan. 1, 2004 we were raising the retail price from $500 to $750.
This price would allow the dealers to make some profit and overhead, and to make it worth their while to order in bulk from us.
Even though we had all this interest, and requests, and verbal and email orders for commercial orders, when the 15th of January passed we only had properly confirmed orders from 3 of the 10 interested parties.
We do not want to have that small a number of dealers, as there would be no commercial competition, and you, the consumers, would suffer.
At the price we are offering these to the dealers I believe they could sell at under $650 and still make a worthwhile profit.
In the meantime we have received a large number of orders, and would be building these units for at least another 3 months the way we were doing it.
We approached a couple of subcontractors to build wiring harnesses and other components, and have managed, due to the volume of sales, to bring down our costs a bit. By buying in larger quantities we have driven the parts costs down a bit further.
Given the above, we now have 3 choices:
1) Keep selling the units privately at $500
2) Change the single price up to $600 and offer these at $500 to anyone who wants to buy 10 or more units, and encourage Group Buys.
3) Go with only 2 or 3 dealers, and let them decide the retail price.
So, I have a created a poll and hope you will fill it in so we may get some feedback.
If we go with option #1 I can not always be as responsive as I want. Simply put, while others are involved, I have the final say on policy, R&D, development, financial affairs, customer satisfaction issues, etc. It takes a lot of time.
With #2 I can afford to pay a full time staff person to deal with the bulk of the work.
With #3 it is easy, but I do not like giving thatmuch contol over to a couple of outsiders. Further, I want to keep the price at or close to the $500 mark.
I invite you to respond to the poll, provide feedback, and tell us what YOU think we should do.
Thanks for your time!
When we first started our project to build the Canzoomer Tuning Computers, we had some specific goals in mind:
1) I personally decided to keep my car, not take Mazda up on the buyback offer, and to spend up to $5,000 of my personal money to design and build and install what was needed to get back at least the missing power.
Mazda had claimed that we were missing 9HP ( 238 versus 247).
I tested the car, as did many others, and we believe the real number is more like 25-30HP. We see the RX-8, in stock configuration, in North America, as making about 220-225 horspower at the crank, and about 175HP at the rear wheels.
My goal was to simply get back the lost power.
2) Along the way i discussed what I was doing on these forums, and a considerable amount of interest developed among readers and other owners.
As I achieved promising results about a dozen people contacted me and asked if what I was doing could be provided for their cars too.
So, I set out to design a device that would be :
a) Easy to install
b) Safe to use
c) Easy to remove for emissions testing or dealer service/repairs
d) Cost no more than the $500 refund we were getting from Mazda.
e) Provide at least a 20 to 25HP gain.
We developed this, sourced the parts, designed the components, and developed a budget whereby we could do this. I did not consider it "work" nor did I intend to profit from it.
At that point it was still just a hobby activity, and I did not need to show a profit. It took some time, but not too unreasonable an amount, and there was a definite end of the process in front of me.
Then the numbers grew... and grew.. and grew..
Pretty soon we had over 100 orders. Then 200, 300 and on..
Dealers/aftermarket vendors and other commercial entities started calling, and wanted to buy our devices wholesale, so they could resell these to their customers.
They asked us what their wholesale price would be on larger orders.
We had to answer "ZERO" as we were only making about $40 a unit at that point, and that is not counting my labour, dyno time costs, or anything for my partner and friends who had helped me to develop this.
At the same time we were starting to receive orders, deposits, and it started to become a major commercial undertaking.
We were working about 1/4 of our office hours on "Canzoomer stuff".
Simply handling the order sheets, emails, phone calls, parts orders, building and testing requirements, billing, shipping, doing tech support iss eating up all my spare time. Like now, for instance, where I have spent the last 3 hours working on this.
Last week I had to go out of town for a few days, with only limited email access, and the questions and requests built up steadily.
We decided that the smart thing to do would be to sell the product to these various commercial dealers, and they would handle the retail orders, and we would only have to deal with perhaps 6 to 10 customers.
We would set up commercial accounts for them, and invoice on terms.
So, we announced in the middel of December tht effective Jan. 1, 2004 we were raising the retail price from $500 to $750.
This price would allow the dealers to make some profit and overhead, and to make it worth their while to order in bulk from us.
Even though we had all this interest, and requests, and verbal and email orders for commercial orders, when the 15th of January passed we only had properly confirmed orders from 3 of the 10 interested parties.
We do not want to have that small a number of dealers, as there would be no commercial competition, and you, the consumers, would suffer.
At the price we are offering these to the dealers I believe they could sell at under $650 and still make a worthwhile profit.
In the meantime we have received a large number of orders, and would be building these units for at least another 3 months the way we were doing it.
We approached a couple of subcontractors to build wiring harnesses and other components, and have managed, due to the volume of sales, to bring down our costs a bit. By buying in larger quantities we have driven the parts costs down a bit further.
Given the above, we now have 3 choices:
1) Keep selling the units privately at $500
2) Change the single price up to $600 and offer these at $500 to anyone who wants to buy 10 or more units, and encourage Group Buys.
3) Go with only 2 or 3 dealers, and let them decide the retail price.
So, I have a created a poll and hope you will fill it in so we may get some feedback.
If we go with option #1 I can not always be as responsive as I want. Simply put, while others are involved, I have the final say on policy, R&D, development, financial affairs, customer satisfaction issues, etc. It takes a lot of time.
With #2 I can afford to pay a full time staff person to deal with the bulk of the work.
With #3 it is easy, but I do not like giving thatmuch contol over to a couple of outsiders. Further, I want to keep the price at or close to the $500 mark.
I invite you to respond to the poll, provide feedback, and tell us what YOU think we should do.
Thanks for your time!
Last edited by canzoomer; 01-27-2004 at 03:05 AM.
01-26-2004, 10:57 PM
#2
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Personally, I would go with choice #2 and focus more on pumping out those wonderful qualify ecu kits. Get more resources to fulfill orders, R&D, QC, Customer Service, and expand the business...more $$$
That's just me if I were you of course!:D
That's just me if I were you of course!:D
01-26-2004, 11:49 PM
#3
so close, I can feel it
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Hi Maurice,
First off, I would like to congratulate you on your effort. Looks like you have a hit on your hands.
As a business man myself, I feel your dilema, you started a side project that was only supposed to last a month or so. However, it's now taking a significant amount of your time with no clear end in site. As nice a dilema as it might be, a solution is required.
Since I couldn't find your poll in the Lounge section, here are my thoughts.
Do you sub-out the sales, but as you've discovered the commercial interest just isn't there (yet?). However, I wonder if 3 dealers is really too few to develop a competitive market (specially if they all can offer mail order).
Do you really have the time to do it yourself without impacting on either your core business or family life? Something tells me no. So you are really left with the alternative of finding someone else to run this little venture. I think that $600 is not an exhorbitant amount, which does give you some room to manoeuver for volume discount. The real question is can you find someone to run this little venture in a way that you find acceptable. I know that this is not as simple a task as it appears.
I vote for 2, if you can find someone to run the show. Otherwise 3, using short term contracts to control potential excessive markup.
Good luck!
First off, I would like to congratulate you on your effort. Looks like you have a hit on your hands.
As a business man myself, I feel your dilema, you started a side project that was only supposed to last a month or so. However, it's now taking a significant amount of your time with no clear end in site. As nice a dilema as it might be, a solution is required.
Since I couldn't find your poll in the Lounge section, here are my thoughts.
Do you sub-out the sales, but as you've discovered the commercial interest just isn't there (yet?). However, I wonder if 3 dealers is really too few to develop a competitive market (specially if they all can offer mail order).
Do you really have the time to do it yourself without impacting on either your core business or family life? Something tells me no. So you are really left with the alternative of finding someone else to run this little venture. I think that $600 is not an exhorbitant amount, which does give you some room to manoeuver for volume discount. The real question is can you find someone to run this little venture in a way that you find acceptable. I know that this is not as simple a task as it appears.
I vote for 2, if you can find someone to run the show. Otherwise 3, using short term contracts to control potential excessive markup.
Good luck!
01-27-2004, 12:13 AM
#5
Forum Vendor
Thread Starter
Sorry, I forgot to set up the poll BEFORE finishing the thread, so had to re-create it, withpoll, and m,erge with the new one.
Done, so people may vote now.
Done, so people may vote now.
01-27-2004, 12:21 AM
#6
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Having been in business for myself, I can appreciate the hidden costs which are not listed which mostly involve a lot of personal time. I commend you for the effort you have given and the ability to come to market quicker than many well established vendors. I find that suprising actually considering you have a day job.
I voted for option 2 as I do think this is reasonable and makes sense. $600 is not unfair and, as you mention, a group purchase can justify the lower cost when they occur as it is easier to bulild in batches vs one at a time.
You have taken a large initial risk which you are justified in recouping and if business is still good in a few months and you find yourself able to lower costs even more, at that point you can then pass those savings on to the consumer.
Cheers
I voted for option 2 as I do think this is reasonable and makes sense. $600 is not unfair and, as you mention, a group purchase can justify the lower cost when they occur as it is easier to bulild in batches vs one at a time.
You have taken a large initial risk which you are justified in recouping and if business is still good in a few months and you find yourself able to lower costs even more, at that point you can then pass those savings on to the consumer.
Cheers
01-27-2004, 01:22 AM
#7
just my thoughts,
once you take it out of house you lose control...
once you lose control you have to compete with yourself, and i am thinking that if you go into business with others you will have a no compete clause.
i think you charge as much as you need to make it worth your while and let the chips fall where they may.
would i like to have one for 500 us sure.
but am waiting to find out the final results.
btw, i would pay a deposit to help beta test. have done it before and works well.
beers
once you take it out of house you lose control...
once you lose control you have to compete with yourself, and i am thinking that if you go into business with others you will have a no compete clause.
i think you charge as much as you need to make it worth your while and let the chips fall where they may.
would i like to have one for 500 us sure.
but am waiting to find out the final results.
btw, i would pay a deposit to help beta test. have done it before and works well.
beers
01-27-2004, 01:57 AM
#12
Ricer is Nicer.....
Pass......
I think you should pass the whole shemozle to a trusted colleague.
Dave (the RX8Friend) has been building for you, and the quality has obviously been proven. If he can run the whole show, and has the time, he is the obvious choice for the job, and very knowledgeable about all things Rotary.
If you care anything for your build quality, reputation and customer/client interface, I would have to recommend that you never let that 'Stealth' bufoon anywhere near your kits in the future....I have never seen such pitiful soldering, mediocre wiring, and sad pin bending skills. (I'm pretty sure I got one of his....)
He also mentioned something about being happier if he never sees the inside of a 'Zoomer mod again! (The pink wires, he is gay right?)
.
.
.
doc
Dave (the RX8Friend) has been building for you, and the quality has obviously been proven. If he can run the whole show, and has the time, he is the obvious choice for the job, and very knowledgeable about all things Rotary.
If you care anything for your build quality, reputation and customer/client interface, I would have to recommend that you never let that 'Stealth' bufoon anywhere near your kits in the future....I have never seen such pitiful soldering, mediocre wiring, and sad pin bending skills. (I'm pretty sure I got one of his....)
He also mentioned something about being happier if he never sees the inside of a 'Zoomer mod again! (The pink wires, he is gay right?)
.
.
.
doc
01-27-2004, 02:48 AM
#13
Forum Vendor
Thread Starter
ROTFL!!!:D
I know Dave seems to be enjoying the tech part of it, but I doubt he would be happy with the paperwork.
The tech is fun.
The paperwork is a drag.
Wait, weren't the pink wires YOUR idea??
Oh, and we have the build stickers now (thanks go out toPolack for a decent job making those). There is a place on them for the assembler to initial.. Hmmm, you have to initial at least one!
I know Dave seems to be enjoying the tech part of it, but I doubt he would be happy with the paperwork.
The tech is fun.
The paperwork is a drag.
Wait, weren't the pink wires YOUR idea??
Oh, and we have the build stickers now (thanks go out toPolack for a decent job making those). There is a place on them for the assembler to initial.. Hmmm, you have to initial at least one!
01-27-2004, 04:10 AM
#15
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Canzoomer,
Go with 600 bucks because from what I am hearing on here, it is worth every penny! Thank you, by the way, for honoring the $500 price even though I emailed you on the 31st of Dec!
Jeff
Go with 600 bucks because from what I am hearing on here, it is worth every penny! Thank you, by the way, for honoring the $500 price even though I emailed you on the 31st of Dec!
Jeff
01-27-2004, 06:33 AM
#16
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For all your time in effort I vote for option #2 as well Maurice, beause you have to make some profit.
Your real profession and entrepeneurship is what got you here in the first place. If this is more of a hobby (that you do to perfection) make sure it stays a hobby and not a full time business. Possibly teach a family member or a close friend your skill and trade to help alleviate some of your time and effort.
We (lot of us) on this forum like modding our cars as fun and as a hobby and if it turned into a business I would think otherwise. We all appreciate the time and effort you have put in. I'm sure we all have day jobs and wouldn't be on this forum if we couldn't afford, or plan to have an RX8. I couldn't even fathom taking on the project you did, let all alone putting up the initial capitol. Wow.
Anyways thanks!
Your real profession and entrepeneurship is what got you here in the first place. If this is more of a hobby (that you do to perfection) make sure it stays a hobby and not a full time business. Possibly teach a family member or a close friend your skill and trade to help alleviate some of your time and effort.
We (lot of us) on this forum like modding our cars as fun and as a hobby and if it turned into a business I would think otherwise. We all appreciate the time and effort you have put in. I'm sure we all have day jobs and wouldn't be on this forum if we couldn't afford, or plan to have an RX8. I couldn't even fathom taking on the project you did, let all alone putting up the initial capitol. Wow.
Anyways thanks!
01-27-2004, 08:57 AM
#18
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Running this project as a hobby was a good idea when you pictured a small group of hobbyists, but you have hit a nerve with this project and the potential is very high. If all buyers were also hobbyists it might be OK, but many have high expectations about delivery and performance, etc.
You have been very understanding of all that and have worked very hard, but you can't address all issues on a larger scale without satisfactory margins. I can see the benefit of either option 2 or 3, but I would favor option 2. Keep it close to home, offer good value, but cover your costs and reward yourself for your very valuable contribution. Even if it means charging more than $600.
The only possible value I see in using dealers/distributers is in reducing shipping/export costs with bulk shipments across the border. Maybe you can find a stateside partner to get the best of both worlds under option 2.
You have been very understanding of all that and have worked very hard, but you can't address all issues on a larger scale without satisfactory margins. I can see the benefit of either option 2 or 3, but I would favor option 2. Keep it close to home, offer good value, but cover your costs and reward yourself for your very valuable contribution. Even if it means charging more than $600.
The only possible value I see in using dealers/distributers is in reducing shipping/export costs with bulk shipments across the border. Maybe you can find a stateside partner to get the best of both worlds under option 2.
01-27-2004, 01:01 PM
#21
ROTOR?
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'Zoomer,
One thing that you must realize is that this product at most has a 3yr life span. Competitors will be hitting the market soon with their products. Using their big "name" to their advantage may not benefit your situation. Have you looked to selling your "mod" to any of these larger companies? Perhaps you can charge a licensing fee or "royalty" (for your maps) to these companies and remove yourself from production. This "mod" is not an idea that will last a very long time, its best for you to cash in right now!!
One thing that you must realize is that this product at most has a 3yr life span. Competitors will be hitting the market soon with their products. Using their big "name" to their advantage may not benefit your situation. Have you looked to selling your "mod" to any of these larger companies? Perhaps you can charge a licensing fee or "royalty" (for your maps) to these companies and remove yourself from production. This "mod" is not an idea that will last a very long time, its best for you to cash in right now!!
Last edited by TiRX8; 01-27-2004 at 01:18 PM.
01-27-2004, 01:30 PM
#23
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It's hard to argue with #2 so that was my vote before reading the other responses. $500-$600 seems to be the price sweet spot in my opinion. At $500 it's a no brainer upgrade. At $750 I'd be looking at your competition.
The key is to free up cycles for you, Maurice, to focus on stage 2 and other mods in the future. That way you get to continue to do what you enjoy while reaping the benefits. I'm sure there are plenty of people who would be grateful to work on the manufacturing side of the operation.
Have you thought about sending a kit and letting people do the fabrication themselves? There are some pretty skilled people on this forum who would be happy to build their own for a price break (raises own paw in air).
The key is to free up cycles for you, Maurice, to focus on stage 2 and other mods in the future. That way you get to continue to do what you enjoy while reaping the benefits. I'm sure there are plenty of people who would be grateful to work on the manufacturing side of the operation.
Have you thought about sending a kit and letting people do the fabrication themselves? There are some pretty skilled people on this forum who would be happy to build their own for a price break (raises own paw in air).
01-27-2004, 03:33 PM
#25
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Maurice,
From the looks of it so far, I went with the majority in voting for option #2. I can't really add anything that hasn't been already said to you on this thread, but for those who took a "wait & see" stance concerning your ECU ( including myself ), customer service is probably the single biggest obstacle you'll encounter in selling more units.
As more owners hear about this great product but haven't been following it's development / history or quite possibly are new to the forum, timely delivery will be a paramount issue. We've already seen comments from those who were worried that their credit cards were charged and no news about the product. In the end, this has become a business and not all your customers will be as forgiving as those who have followed this saga from day one. I know that option #2 will address this and other time-consuming issues for you.
I'd like to see the ability for you to accept direct Paypal CC payments and somehow be able to ship into the US without the current customs hassle. (just an idea)
Continued success to you, we all appreciate it.
-Gary
From the looks of it so far, I went with the majority in voting for option #2. I can't really add anything that hasn't been already said to you on this thread, but for those who took a "wait & see" stance concerning your ECU ( including myself ), customer service is probably the single biggest obstacle you'll encounter in selling more units.
As more owners hear about this great product but haven't been following it's development / history or quite possibly are new to the forum, timely delivery will be a paramount issue. We've already seen comments from those who were worried that their credit cards were charged and no news about the product. In the end, this has become a business and not all your customers will be as forgiving as those who have followed this saga from day one. I know that option #2 will address this and other time-consuming issues for you.
I'd like to see the ability for you to accept direct Paypal CC payments and somehow be able to ship into the US without the current customs hassle. (just an idea)
Continued success to you, we all appreciate it.
-Gary