Should I partner with my company I work for to get my new product off the ground?

[pkaiken]

Hi, I'm new to this forum and new to being an entrepreneur, and I need some help. A lot of help, but for now I will just ask one question.


MAIN QUESTION: Should I partner with the company I work for in order to get my company to sell products faster using their online store?

DETAILS:

I just started a new company, my LLC was just registered, provisional patent filed, trademark filed, and I am still getting my product made through a manufacturer. I work full time repairing smartphones. The company I work for owns an online smartphone parts store. I made a magnetic repair guide mat that helps disassemble smartphones. I want to sell these to repair stores (have them be distributors of my product). The company I work for would love to sell these repair mats. Should I brand the mats with their names in the corner, or should I be independent and sell my mats myself through my website? What are the possible problems that could arise if I "partner" with them and use their store to make first sales of these mats once they are ready from the manufacturer?

Thanks.

[Paul]

Hard to answer but in general I’d guess you would do better through an existing distribution channel. It sounds like they are already established right in the middle of the market you would target.

[pkaiken]

Thanks for your reply Paul. Actually, my product complements their store. They currently do not have a repair guide mat. Many other parts stores do. I am a graphic designer and also a technician and photographer, so I can make these mats for any device. I am new to entrepreneurship and I would start by letting them buy my product in bulk to sell in their store. My main question is, should I not include them (possibly because they may have issues later if my product becomes a great success) or should I just sell this on my own web site once I get it set up and don't use them at all. (NOTE: Screwmat.com is the leading repair guide and they make a million dollars in revenue a year and have world wide distributors , I have made something superior to their product and hope to mimic their business model and possibly sell my repair guides the same way).

[Paul]

Others on here may have very different opinions than I do. I would say first you have to think what you would do if you were not attached to this company. Would you want to try to sell your product one at a time from your own site or sell in bulk to distributors? Then you have to analyze the profitability of each scenario. Will they sell a million? How many would you sell from your own site? You have to consider which is likely to be more profitable. How much you’ll make selling bulk vs selling retail should be an easy calculation. ALSO which is a safer and easier option?

There are other questions. Are you giving them an exclusive? Will they guarantee sales? What if they don’t meet sales expectations? Can you sell to other distributors? What is the expected “shelf life” before a superior product emerges? Do you have the resources to compete against the existing leading brands? Remember this; it isn’t true that a superior product automatically wins. You need marketing and distribution.

I don’t know anything at all about that business. I can only guess that customers are more likely to buy the product that is most easily available from their existing parts supplier that they know and trust, rather than from a one product online seller that they don’t know.

[Fulcrum]

Paul has asked some good questions. I want to ask a few more detailed ones.

1) Who is making the mats?
2) Where are the mats being made?
3) Do you have the capacity to fill a 100pc order quick? 1,000? 10,000?
4) What are the advantages of your mat over what's already on the market?
5) If you sell through distributors, are they going to stock your product or will you be drop shipping?
6) Who cares what the other guy generates in revenue, what can you generate in profit?

You've taken some great steps that most only dream about. If it were me, I'd start with supplying your current employer and build up/pivot from there.

[Paul]

You've taken some great steps that most only dream about. If it were me, I'd start with supplying your current employer and build up/pivot from there.

I absolutely agree! Take the path of least resistance and get it going!

[Harold Mansfield]

I agree with licensing or branding it for the company you're working for now and wants to sell it. That bird is in the hand.
You also need to have your own sales funnel, so yes you need to create a website or whatever is needed to sell them on your own as well.

You may find that licensing and branding is your most profitable business model, or they may not sell at all on the other website and you won't have your own sales channel.
Take the opportunities in front of you, but always have your own.

[pkaiken]

Others on here may have very different opinions than I do. I would say first you have to think what you would do if you were not attached to this company. Would you want to try to sell your product one at a time from your own site or sell in bulk to distributors? Then you have to analyze the profitability of each scenario. Will they sell a million? How many would you sell from your own site? You have to consider which is likely to be more profitable. How much you’ll make selling bulk vs selling retail should be an easy calculation. ALSO which is a safer and easier option?

There are other questions. Are you giving them an exclusive? Will they guarantee sales? What if they don’t meet sales expectations? Can you sell to other distributors? What is the expected “shelf life” before a superior product emerges? Do you have the resources to compete against the existing leading brands? Remember this; it isn’t true that a superior product automatically wins. You need marketing and distribution.

I don’t know anything at all about that business. I can only guess that customers are more likely to buy the product that is most easily available from their existing parts supplier that they know and trust, rather than from a one product online seller that they don’t know.

Thanks for the great response. Okay, here is how the leading company Screwmat.com works (summary from web site):

WHAT IS SCREWMAT?:

The ScrewMat is a magnetic illustrated guide. Each guide is color-coded to keep each part orderly during disassembly and reassembly. When you take a screw out, you simply place it on the adjacent spot on the ScrewMat. The magnetic sheet holds the screws and small parts from sliding around until you are ready to put the device back together. ScrewMat has customized more than 20 different designs for the hottest and most difficult models to repair. ScrewMat has a model available for every iPhone, IPad, and iPod including several different Android phones, most notably the Samsung Galaxy line.

SCREWMAT VS SCREWPAD

My "screwpad" is the same except my repair guide has special labels that show only the screws that need to be removed for a specific repair. The 3 common repairs on an iPhone for an example are the charge port, screen repair, and the power/flex cable (that controls the power button). There are about 30 screws in an iPhone. Some screws do not need to be removed for curtain parts that need replacing. Screwmat does not show any specific repairs. It only labels ALL of the 30 screws on their guide. My Screwpad labels all 30 screws as well, but color codes labels for the main 3 repairs. The most complex repair is the power/flex cabe because it is under all the parts in the phone. You have to gut the phone to replace this cable. No repair guide in the world right now shows how to replace this in ONE page visual guide except my Screwpad. There are a few other smaller elements to my Screwpad that screwmat does not have that any technician will love.

YOUR QUESTIONS ANSWERED:

Are you giving them an exclusive?:

-Yes and no. My plan was to have Screwpads branded with their parts store and website URL exclusive to them. I would sell my Screwpads on my own website without their branding. (I may have their store as a link for parts supplies since I will not be supplying any parts from my web site)

Will they guarantee sales?

-No major discussions have been made yet. They are waiting for me to finalize all pricing and finish all the business details. I have presented them an general idea of how this would be sold in their store but nothing more than this yet.

What if they don’t meet sales expectations?:

-They will be buying units in bulk from me. Also, I am making very high quality youtube repair videos that reference the Screwpad in them. The only way sales are not met is if we do not market this properly. But then again, this product almost sells itself. This is something many technicians would want to have in their stores for interns, as well as repair schools. All of these repair stores and schools currently use Screwmat because its the leading repair mat. Again, mine is superior in every way and I hope these same customers of Screwmat grab my Screwpad.

What is the expected “shelf life” before a superior product emerges?:

-That is a good question. There is nothing stopping any company from copying my design and making their own. That is why I hope to get this to the market and get to all the possible customers as fast as possible before other companies re-design theirs. That is another reason why I am partnering with my company I work for to get them to help me get this to market very quickly as well as use their connections to advertise Screwpad. They will try to sell their Screwpads not only to make money from it but to advertise their own parts store. The Screwpad brand will still be advertised because of this. So when I sell my Screwpads on my website, that is another place that Screwpad will be marketed and sold. Its like two companies marketing one product. (NOTE: they will only be a distributor with exclusive and customer Screwpad's, and not have any stake in my company).

Do you have the resources to compete against the existing leading brands?:

-As I said above, I will be marketing this through my web site and the company I work for will indirectly be marketing my brand for me as well when they try to advertise their store using Screwpad. I am a technician, photographer and graphic designer so I have no limits to making more Screwpads for any device (including computers, game systems, and any other non-smartphone device if I want to). Screwmat is limited ONLY to smartphones.

Thanks for reading this long reply. I really appreciate your advice and questions.

[Harold Mansfield]

I like it. I just repaired/replaced the screen on my Nexus 7 so I understand how something like this would come in handy. The screws are ridiculously small, and my eyes aren't 20 anymore.

[pkaiken]

I like it. I just repaired/replaced the screen on my Nexus 7 so I understand how something like this would come in handy. The screws are ridiculously small, and my eyes aren't 20 anymore.



Thanks Harold. Look forward to my new product in the next couple of months when my website is set up. www.screwpad.com

[pkaiken]

Paul has asked some good questions. I want to ask a few more detailed ones.

1) Who is making the mats?
2) Where are the mats being made?
3) Do you have the capacity to fill a 100pc order quick? 1,000? 10,000?
4) What are the advantages of your mat over what's already on the market?
5) If you sell through distributors, are they going to stock your product or will you be drop shipping?
6) Who cares what the other guy generates in revenue, what can you generate in profit?






1) Who is making the mats?
Me, I am a technician and graphic designer. There is no limit to what mats I can make. They will not be limited to smartphone only like Screwmat is. They will also be made for laptops and game systems later on. The only limit is that I am making them by myself. So if my company takes off big time, I will be scrambling to make more guides by myself.

2) Where are the mats being made?
I am currently in talks with a guy who finds manufacturers. Due to the Chinese New Year, these talks are delayed. I have no details as to how much units will cost or anything like that yet.

3) Do you have the capacity to fill a 100pc order quick? 1,000? 10,000?
No, but my father who makes six figures will become a partner and investor in the company once I get this company off the ground and prove it is profitable. I DON'T want my company I work for to be an investor because I don't want them to take control of my business. They are owners of a repair chain that spans the entire east coast. They may want to buy my company if it takes off, who knows.

4) What are the advantages of your mat over what's already on the market?
Read my response to Pauls reply.

5) If you sell through distributors, are they going to stock your product or will you be drop shipping?
Very good question. I am totally new to this and I will have to research this. I guess since I will be starting small I would stock my product (this mats are as thick as paper and I could easily stock 1000 of them at home). Drop shipping would become necessary once I gain distributors. Screwmat has distributors around the world. That is my ultimate plan too.

6) Who cares what the other guy generates in revenue, what can you generate in profit?
True, I only mention that the other guy makes a million in revenue a year because I am following their business model and hope to reach or surpass their market permeation to overtake Screwmat with my product.

[Nelson]

"I am a technician, photographer and graphic designer so I have no limits to making more Screwpads for any device (including computers, game systems, and any other non-smartphone device if I want to)."

"I like it. I just repaired/replaced the screen on my Nexus 7 so I understand how something like this would come in handy. The screws are ridiculously small, and my eyes aren't 20 anymore."

This is very fascinating. It puts me to think about electronics industry. Today we are quite dependent and in constant use of devices. And why not, every user should be able to perform simple repairs and replacings.

I'm quite sure that in the near future, when we will buy our new device, we will find at least a screwpad in the box and instructions that helps us replace the screen, the case, the button etc. It will be like mounting the spare wheel when we have a flat tyre at our vehicle nowadays.

What do you think about this? Are you seeing the same?

[Harold Mansfield]

This is very fascinating. It puts me to think about electronics industry. Today we are quite dependent and in constant use of devices. And why not, every user should be able to perform simple repairs and replacings.


To be honest, now that I've done it a couple of times. I have to disagree. The average user should not, and will not want to perform their own repairs. There's a good number of DIY'ers like myself who'll give it a shot fully understanding that I could completely ruin it and that I'm voiding any warranty, but it's not for everyone.
But there's enough of a market for this product from both DIY'ers and repair and service professionals to make it very viable. Probably has more uses than that.

[pkaiken]

To be honest, now that I've done it a couple of times. I have to disagree. The average user should not, and will not want to perform their own repairs. There's a good number of DIY'ers like myself who'll give it a shot fully understanding that I could completely ruin it and that I'm voiding any warranty, but it's not for everyone.
But there's enough of a market for this product from both DIY'ers and repair and service professionals to make it very viable. Probably has more uses than that.

Unfortunately in this market, the entire point is for the DIY'ers to fail the repair. Repair stores DON'T want you to fix your own device. But since there are those out their who will try, there is a market set up to make money off of DIY'ers. Repairing a phone is hard. It takes a lot of practice. But that doesn't stop some people from trying on their own deice. When the DIY'er fails, (and most do), he takes it to a repair store. So the online DIY store AND the repair store make money. Even better when you own a repair store AND an online DIY store and get revenue from both.

[Harold Mansfield]

Unfortunately in this market, the entire point is for the DIY'ers to fail the repair. Repair stores DON'T want you to fix your own device. But since there are those out their who will try, there is a market set up to make money off of DIY'ers. Repairing a phone is hard. It takes a lot of practice. But that doesn't stop some people from trying on their own deice. When the DIY'er fails, (and most do), he takes it to a repair store. So the online DIY store AND the repair store make money. Even better when you own a repair store AND an online DIY store and get revenue from both.

In my case it was a 2013 Nexus 7. My favorite tablet of all time thus far, and my 3rd one (lost one, sat on one). Cracked screen. I bought a repair kit and new screen and figured I'd give it a shot. It was a pain in the butt for a few minutes but it actually worked. But then I couldn't leave well enough alone and thought I could repeal the glass for a better fit and cracked it again. I ended up just buying another one for $150.

Had it been a more expensive device I would have taken it to a shop.

I'd do it again since I know where I made my mistake, but I can't imagine the average person who doesn't like tinkering with things to try it.