Our Retail Model: A new way of buying and selling online

  • You might think the way we're running the Teacher Syndicate is a bit strange - you order from us and pay us, but your products get delivered to you directly from a factory.


    The traditional retail model.  Products are out of date as soon as they come to you.  Additional steps for warehousing and retail sales adds considerable costs to each product.


    The drop shipping process delivers much newer products with no additional costs for warehousing or retail selling.
     

  • It's not part of an elaborate scheme to cheat you out of money or sell your address to another company.  It's the new preferred trend in internet selling, called 'drop shipping'.  
  • Basically, about ten years ago the commercial world discovered that online selling was going to be much harder than anyone ever thought. If fact, thousands of .com startups had 0.001% chances of selling anything, my old T-Shirt shop included. Some trusted items, like books, got off to a good start, but most online businesses never reached the market they were chasing. And even online book shops were struggling to make ends meet in the VERY different and demanding world of online sales.
  • Then followed a strange time, where someone would come up with a good idea, then make it happen with either a nerd on the payroll of a lot of investors' money, and then, much later, try to think of a way to make money out of the service. Think of Facebook, MySpace, YouTube, Skype etc. Most of these companies still haven't found a way to make money, but they are popular. They might try selling direct advertising and access to its members, or selling members' details to commercial interests (and why not, it was always in the fine print that they were allowed to).
  • Most of the time members voted with their internet connections and turned off and found something else. But what stuck was the power of the internet in forming social groups. A new movement, called 'Gonzo Marketing' utilized the social networks people have to develop trust in a brand name. For example, a car company might have encouraged all of its employees to spend at least one hour a day on the internet in chat rooms. Let's say Bill worked at a car company as an accountant. Maybe Bill liked gardening, so he'd spend time in gardening chat rooms, publishing his ideas and helping other keen gardeners. Bill would also make it known in his profile that he worked for a particular car company. When it came time for Tony, another gardener, to buy a new car he'd think about the easiest way to get a good car at a great deal. He might even remember that he'd seen a worker for a car company called Bill in his gardening group. Tony thought Bill was great and trustworthy, thereby trusting the car company he worked for. He might even contact Bill directly to see if Bill could set up a good deal for him.
  • This type of marketing worked for a while, but then it became difficult for managers to tell what online time was productive and what was a waste of time. And disgruntled employees also made sure they used every opportunity to bad-mouth their employer in public forums. There was also another issue, in that Bill's activities were seen by only a very small percentage of consumers, as not many gardeners would be interested in buying a new car once every year.
  • The current marketing model is 'drop shipping'. It is an incredibly simple model, capitalizing on the power of social networks and the capacity of a factory to do what it does best - make products and stay right away from marketing. I tend to think it is a win-win-win-win situation, as everyone gets a better deal with this new retail model.
  • The groups involved in drop shipping are
    1. Factories manufacturing the items every day
    2. The seller (me) and
    3. the buyer (you).
  • There are no retail sales shops, no ego-centric designers putting their labels and 3000% markup on products, no fancy reward schemes that never work, and no communication / personal time if it is not needed. It's incredibly fast, incredibly cheap, and considerably more difficult to establish than I ever thought it would be. The pace is incredible, the prices are incredible, and the percentage of con-artists abusing the system is incredible. It's taken me an extra 6 months longer than expected to develop relationships with 100% honest and genuine factories. I never have to worry about an order anymore, except when I am trialling a new factory for my own orders. Of course all of the customer products available to order are already pre-evaluated and 100% safe, high quality, always available and always a very low price.
  • The basic concept is a symbiotic relationship between the factory and a social group.  The social group helps the factory make better products, giving them feedback and letting them know what the market wants to buy.  The social group benefits by getting great products, made cheap, made new, and made for their needs.  
  • A factory puts 95% of its budget and energy into research, design, quality control, testing, quick manufacture methods and and quickly incorporated modifications based on customer feedback. The factory does what it does best, and doesn't deal with retail customers.
  • A social group, either formed for the purpose of shopping, or founded through another purpose, then becomes the shop-front for the factory's products. In my case, the Teacher Syndicate was founded on commercial exchanges, firstly with exported / imported goods, now moving onto teacher developed tacit knowledge. It's here to make money for me and you. There's no hidden agenda. I also get to type a lot, and other teachers who like to type and tell stories can type a lot too.
  • The group uses the power of online social groups to develop trust in the products marketed through their own communities. If a product is associated with a good group, the product is unconsciously rated 'good' by association. A social group will usually have a limited stock listing, usually no more than 1000 products. The group can then achieve amazing discounts by focusing their shopping on these purchases to qualify for bulk purchase discounts. 
  • If I stock only four webcams, and I get 1000 webcam sales, that could average to 250 sold of each model. My wholesaler rating is improved, and I can then negotiate a further 5%, 10% or 20% price reduction based on selling high quantities of sales, concentrated on only a few products. The listed price then falls on the Teacher Syndicate website.
  • Consider this: 1000 teachers requesting a new product, or a product change, will be heard a lot louder than 1 teacher's suggestions. Not only can the Teacher Syndicate pool orders to save money, we can influence product design and the creation of new products. There is a great benefit in being part of a powerful representation group for education. It's a multi-billion dollar industry world-wide, it employs more highly trained and well paid professionals than any other profession, it has more clients than any other business (students), and it consumes great quantities of products like there's no tomorrow.  And its one of the hardest markets for manufacturers to get into. 
  • Being with us has a few major advantages:
    1. If there are only 1000 products on sale in a community, factories will want to have at least 30% of those products made by them. They will make great deals. I actually went through this process as a government employee, setting up a bulk purchase ordering system for schools. We picked 4 computers schools could choose from, if they wanted to join into a bulk purchase scheme. One single company listed their product at about 60% of the current market price, and got $16,500,000 in business in 1 month (yes, $16 million in one month- we were stunned too). They fulfilled every part of the contract (we made it really, really tight) and other companies took notice. 
    2. A business will make sure if they have even 1 of the listed products, they won't send out a lemon, as highly active communities spread bad news quickly.  I must admit I get about 80% of products from one factory, but once a week I get a special VIP invitation to yet another exclusive factory, based on high sales volume and a targeted education market.   Just as sellers get reputations, I have a reputation as a buyer/reseller.  It's a bit like eBay's customer rating systems. I'm a Bronze seller now, which means my customers get faster issue resolution, high product delivery priorities etc. As the business grows, I'm looking forward to being a Gold seller, so I can pass on more benefits to members.
    3. I have learned one thing over the last twenty years - many manufacturers have NO idea how to make products for education. They do not know what goes on in a classroom and why their products are ignored by the education sector. We're talking NO idea about student safety, privacy or educational rigor. Getting feedback directly from customers is worth a lot of money. It gives them an advantage over other manufacturers as they know how to meet their target group's needs. No more guessing or expensive focus groups.  Your opinions and buying patterns are worth a lot. Although your personal information will never be given out, our factories do take notice of which products are selling well and what products are being ignored.
    4. Shopping is fast. There's no-one else in the equation. There's no regional manager making a stupid decision on stock based on their own personal experience. Like "No, my son doesn't like blue, so we're not going to stock any blue items for anyone in the world, because no-one will buy them."  In my paid last job my priority was to provide unicorn and rainbow based electronic resources for 850,000 students, because my boss's daughter didn't have enough access to rainbows and / or unicorn related products at her own school. And cornify wasn't enough! 
    5. Customers don't have to deal with factories, retailers, or any third party if they have an issue, complaint, concern etc. It's pretty much just you and me. Hi! <<me waving>>
  • So yes, it is a bit of a strange and new shopping experience, but it works, and provides incredibly quality products at a great price, without all the awful online shopping experiences. You are most welcome to look up 'drop shipping' on Google and read about it.
  • I must say it is described in a very simplistic way. Getting a group of people together on the internet, getting us to trust each other (without knowing real names) and getting us talking is HARD. I've been doing it for 15 years now - and I have summarised a few indicators of success:
    1. It's hard and takes a lot of time, because teachers value and expect a high quality of communication in every medium you use (including correct spelling)
    2. Teachers know when you are lying and if you are not really a teacher, or if you really aren't an expert in your advertised field 
    3. Teachers need to 'voice' other stuff first before they switch onto the topic, because there's often no-one else available to listen to a teacher who really needs to 'voice' something, in order to clear their minds
    4. Teachers have hunches about what is a crappy product and will cause problems, and what looks interesting and is worth a try
    5. Teachers know that trying something new (and changing a routine) is not something you want to do every day. There's got to be a very good reason to change, as change creates a domino effect through everything else - behavior management, safety, noise, creating new opportunities for you to be embarrassed by your student's work ("Um, no, I don't know why your son drew that part of the anatomy, we were just studying the food group").

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