Re: The Next Steps?
in response to
by
posted on
Mar 31, 2012 06:49PM
Creator of award winning eers custom-fitted earphones
I would think that Sonomax can stand almost on its own as long as they get into the stores and distributors worldwide as they have the patents to be a clear better choice for in ear products as everything else is really uncomfortable and fall out, etc.
I agree with you but I would rather someone else take care of marketing and retailing and manufacturing. Additinally Nick has indicated on many occaisions that the end game is royalties.
But I do know the big names are the big players and teaming up with them through the licensing to the OEMs is a fair strategy. Just wondering how is revenue figured out on that? Based on the OEM's sales of these units per year or just a licensing fee set that is not tied to number of units sold or shipped? Because the OEM would be making the whole product themselves start to finish I would imagine.
Yes, OEM;s would manufacture thier own products, market, distribute and retail them. Sonomax would collect a royalty of $5-$10 per ear.
As for the stores, I would hit the biggest as soon as you can once you prove out the sales at the first few smaller stores. Once you are confident in your presentation and demonstrations for the big boys, then you can be ready for Walmart and Best Buy. Best Buy in North America is the key. The big box stores if they get excited which they should, would love to have some form of initial exclusivity and they can help with an order frontlog which in turns pays for extra production capabilities implemented to keep up with demand. Hopefully Nick and his team are working away at one of them as you hopefully suggested could be the case.
One key for Sonomax is to wait for no one. They have be constantly show that they will forge ahead with bigger better deals so that potential OEM's take notice and jump on. As I understand it the returns are minimal and the sales are stong. I do think that Nick is working on some big name players be it retail or OEM. In a conversation with Nick I asked him if he was still working on soem big names and his reply was that he will always be swinging for the fence.
Perhaps the Skullcandy license agreement will be the key to Best Buy and Future Shop as you will find their products there. They need no re-introduction to Best Buy Canada and USA.
I would like an update on Skullcandy. They were supposed to have a product ready for the CES and to the best of my knowledge they did not have it ready. But, you are correct, that OEM deal could be the foot in the door for SHH.