January 3rd, 2012
The world’s largest electronics show, CES 2012, is almost upon us and as always Shipwire will be in attendance. We’ve decided to share some of what we know based on past experience so that you can be better prepared and know what not to miss at this year’s expo, along with a few things that we’d like to see at this year’s CES.
Hot Trends to be on the lookout for
Fuel cells. It seems that fuel cells are coming to power portable electronics, with companies like SiGNa set to exhibit fuel cell-based chargers for various devices. AppleInsider also recently reported that Apple has filed a patent for fuel cell tech.
Bigger, better screens. 3D TVs were the big thing last year and it looks like there will be a strong theme of screens this time around as well. New developments in OLED will see a big announcement and one maker plans to unveil the world’s largest HDTV unit based on the technology. Not only that but LG is also announcing a 4K television which will quadruple the resolution of typical 1080p display.
Ice Cream Sandwich (ICS) and new tablets. Last year, Honeycomb was released shortly after CES and was followed up by the new ICS in November. This means that there will be several new tablets released close to the $100-dollar mark. This accessibility will make tablets an even bigger trend than it already was, although as always there will only likely be a few winners.
What we’d like to see this year
More businesses focusing on selling directly to consumers.
Last year we lamented that everyone was focusing on selling to distributors. This is great, but finding a good distributor, getting their attention, and building a business relationship is harder than it looks. Distributors are attracted to products which already have success in at least one market. This is completely normal since they have their own risk tolerance and investing too much into unproven products can mean bad business (or worse) for them. This means that if you’re selling a product without a track record, convincing distributors to partner with you may be more difficult than you expect.
The lesson is that with a new product, learning to sell direct in one market will work as an ideal proof of concept and will help you attract distributors for other markets.
Since last year we have seen many new customers – even ones that displayed at CES 2011 – join us as Shipwire customers, using fulfillment to reach their market directly. We’re also seeing a huge increase in product crowd-sourced funding through venues like Kickstarter. So we know that some innovative product makers are selling to consumers.
When we examined how exhibitors can be successful in finding and dealing with distributors, we found three major points that contribute to the success of the most successful retailers:
- They sell online. Many distributors are strong with both direct-to-consumer (B2C E-commerce) and B2B. Many distributors have a complex chain of relationships when it comes to shipping to or on behalf of retailers. Don’t be surprised if you get asked to “drop ship” or ship to their buyers. Like everybody in the supply chain, they are trying to simplify their supply chains as well. Be prepared to offer them simple solutions.
- Selling internationally. Selling in overseas markets is very important because it can help your business grow quickly, discover new customer needs, and hedge against local market downturns. It’s also a task that has many challenges so finding the right distributor is very important. The best distributors have strong overseas networks and know how to localize your product. Good overseas distribution partners are often hard to come by, so do your due diligence on them.
- Smaller wholesale purchases, drop shipping and vendor managed inventory. To hedge against risk, the strongest distributors will only invest heavily (by buying larger quantities) in proven products. For unknown or unproven products they may ask you to drop-ship to consumers (incurring costs of holding inventory, shipping, etc.) or consign inventory to them where they will only pay for what they sell. This lets them unload their risk to you and keeps them a strong force in their market.
The truth is that each of the above three strengths can be used by any individual retailer and not just the largest, most powerful retailers. And most importantly, capitalizing on these strengths will not hurt your relationship with retailers but will actually improve it. Since distributors have large networks and the market you’re going after is smaller, there won’t be a threat of cannibalizing sales for them. This will help the distributor make the decision to purchase your product because suddenly you will be showing them something that has proven success in the market.
Our wish for CES 2012 is to see more exhibitors using fulfillment to break into new markets and sell their product directly to customers.
Parties and events:
Of course, CES is also known for big parties, ranging from celebrity events to awards ceremonies. You can see a full list of this year’s CES parties here.
