Wooting X Distributors
When we posted the Wooting one project on Kickstarter, we hadn't envisioned to work with distributors. I previously wrote about working with resellers. This time, I want to announce a new distributor we started to work with and go into a bit more details why distributors.
Mechanicalkeyboards.com will help us distribute the Wooting in the USA.A lot of you in the US are already familiar with them because their customer service is legendary. That's also one of the reasons we wanted to work together with them. You guys are priority number one, and whoever sells the Wooting one should also treat you in the same way.Now they're not only the number one mechanical keyboard distributor but also the Wooting one. You can now get one from their website.
When we started, we were laser ;) focused on creating the Wooting one and found our own way to distribute them to you. However, we realized some time ago, if we really want to push forward Wooting and everything we want to achieve, we had to think... next level🚀.
Wooting, not just a brand
It really kicked in when I considered that we were not only a brand. But also a hardware manufacturer with actual R&D happening. When I looked back at our experience creating the Wooting one. A couple of things that you'd usually learn from books became very clear:
- Hardware development takes a long time because there's a lot of communications, testing, and failure involved.
- If you want to make the end-product affordable, you need economies of scale. This means, investing in expensive tooling, purchasing and producing in bulk.
- Economies of scale is equal to investing a large amount of capital upfront without fast return
FYI; it's possible to make use of "open" tooling from a manufacturer. This means you'll use molds from the manufacturer to make the product and avoid investing yourself (an easy $20k+). But it also means it limits your design to the molds they offer. We make our own molds because design matters.I thought if we'd keep the supply chain as short as possible, we'd be able to afford a higher cost price per keyboard. We could then focus on small production quantities and just-in-time delivery. Until we could afford to produce larger quantities and forecast what we'd need.The reality, however, is that we couldn't even start producing in small quantities. Unless we'd make a regular keyboard at a smaller manufacturer using a generic switch.It was and still is quite the learning curve for us. For example. We learned about the unreliable lead-times of PCB components (i.e. those little electronic thingies inside the keyboard).If the demand for a certain chip is low, the lead time could take 3 months. 3 month later, you'd still not know for sure if it will arrive on time. A big problem if you aim to deliver just-in-time. You start to forecast and buy these items far in advance. A risky venture, when the forecast is off and cost capital in advance.
When it comes to keeping keyboards on stock ourselves, it means we need to invest in a full production including logistics in advance. Then wait for the sales before we could afford another round of stock.This is plausible, though very difficult for us to afford in a startup situation. It becomes difficult when other keyboard languages get involved. I'm a bit of an idiot or a soft heart, but I felt terrible if we weren't able to offer the Wooting one in your local language.The caveat though is... each language involved means another dedicated production. Unfortunately, it's not as easy as mixing up all the languages in a single production.This is where distributors jump in. They're able to carry the stock and distribute it among other sales channels.For example, we already started to work with Trigono. A distributor for the Nordics. They helped us supply and distribute the Wooting one in Nordic language to different resellers including Inet, proshop, Maxgaming and more.That's why the Nordic language is also part of our batch 2, that will deliver very-very-soon.
Local sales channels
We've aimed our efforts too wide when we started Wooting. We believed that the core-gamers were are all active online and part of a global market community. This was a dangerous assumption and it luckily did work out. But when it comes to more focussed efforts, it doesn't work.We all play the same games, have similar interests, create memes and trash the internet. But everybody still has different purchasing funnels, heavily influenced by the local culture/market.We're very familiar with our home country purchasing behavior. If you'd ask me how it works in Spain for example, I'd be clueless.For example (a very plain and generalized view), in the Netherlands, we rarely go to the retail store anymore for our PC purchases. It all happens online with the optional visit to the major electronic store to check out a demo. Nor do many Dutch buy all their components from a single source. Usually, the cheapest with the fastest delivery time wins on a comparison website. Importing a bunch of cheap stuff from Taobao or other countries isn't too foreign either.Good distributors know more about their local market and help us understand this behavior. They help us position the brand and coordinate marketing efforts. It also opens up new sales channels and makes the Wooting one easier available to a broader audience.
Quantities & credibility
All-in-all this helps us produce the Wooting one in larger quantities. Which means lower cost per product, more revenue for us to invest in growth, more credibility for bank loans and more authority towards manufacturers.Reputation counts in this industry. Not only in your sales figures but also credibility and that's something you need to build. Believe it or not, you greatly influenced our credibility.Before the Kickstarter, we weren't taken seriously enough to make the Wooting one what it is now. We were limited to the tools at hand. They didn't see a good reason why they should heavily invest in furthering the technology yet.After the Kickstarter, your support kick started not only the Wooting one but also our reputation. 👏👏🙌🏼If we can get what we want, it means you and us together can make awesome things happen.
I've only talked about the benefits of working with distributors. There's definitely some disadvantages as well. The most obvious, profit margins. You need to start sharing the pie. Though if everything works out, the pie should be a lot bigger (more quantity sales) than when you'd be alone.For the rest, the disadvantages are equal to anybody you work together with. It requires teamwork, communication and real work not bad promises. In the end, you're giving away a piece of your business to another and entrust them to handle it right. That's why picking the right partners is very important, we'll see if we did.In the end, if you're not happy, we're not happy.
Talk to you soon
Hopefully, you've become a bit wiser and as our team member and stakeholder, agree with our steps forward. The next blog will introduce another distributor and I'll talk a bit about how we're marketing n00bs.As always you're welcome to leave feedback and discuss the above over: