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Sunday, January 27, 2008

It's not a religion

Michael Dell is on record as stating the direct model is not a religion and anything can be changed. I suppose if it were change would not be an option, but that is another matter. What the company has done is it has continued with its direct model while at the same time partnering with WalMart, Best Buys and other retailers in America as well as in Europe and Asia. In keeping with change, Dell annouced several weeks ago it would launch a channel program where it would partner with VARs (Value-Added Resellers). This course of action by Dell is, of course, not without its detractors and skeptics. Nonetheless, the potential sales increase for Dell is
enormous. I think the future looks very bright for Dell.

Some thoughts, or lessons, come to mind as concerns independent apparel retailers and independent technology resellers, VARs (Value-Added Resellers) as they are more commonly known.

1 The willingness to change your mind about how you do business. Dell has effectively admitted if it is to not only survive, but to thrive, it must reassess the competition. The company decided it would be better to partner with that competition, namely VARs and mainstream retailers to their mutual advantage.

Thought: Both, independent apparel contractors and independent apparel retailers in Round Rock and Austin have consistently acknowledged the value of partnering with one another. Yet, the decision to act on that acknowledgement has yet to materialize. Talented, knowledgeable, skilled and experience techology individuals have reponded heartily to the possibility of partnering with VARs, not as employees, but as independent contractors. That is a mutually advantageous relationship for both parties. Independent retailers, whether in apparel or technology, continue to hold to a model that will not allow their growth because they as individuals can only do so much.

2 The realization that it takes time to develop relationships with VARs who were yesterday's competition. Like anything new Dell realizes it has to, and Dell is willing, to make adjustments if the relationships are to grow stronger. Dell's decision to partner with VARs by any other name is a network.

Thought: The Independent Enterprise Network model is not a cure for all struggles, challenges or problems faced by independents. However, because it provides a means for increased sales and service without the burden of hiring new employees, the potential for growth in sales and service is enormous.

Finally, the IE-Network business model as different from conventional business as was the direct model for Dell twenty years ago. You remember the snickering about an upstart company thinking it could sell its computers without a middleman? I hear the snickering of those who think you cannot leverage IE-Networks to create or build apparel and computers, locally. Michael Dell didn't listen. I'm not listening, because I know there those who have worked their existent business model long enough. They are surviving. Now, they want to thrive. Their business model is not a religion. They can change it.

Saturday, January 19, 2008

Hollister CA

I admit I am at a loss to comprehend the mastermind at Abercrombie & Fitch who conceived of the Hollister CA apparel marketing scheme.

Hollister CA apparel is a long way from Hollister CA the agrarian community 100 miles south of San Francisco. It is most certainly not the trendy beach resort marketing makes it out to be to appeal to young buyers. It's about 30 miles inland from the Pacific Ocean.

My daughters love to shop there, as expensive as it is; it's their money. Hollister CA, for myself, is my high school town, class of 69.

The peculiar, though not surprising, thing about the agrarian Hollister CA phenomenon is with classmates and schoolmates I correspond with online. They are oblivious to the hip apparel reputation associated with the name Hollister CA when I describe it for them from deep in the heart of Texas.

Travel a little south to Los Angeles for a reality update. Where the Texas border region was once the jeans tailor shop of America boasting home to the largest of apparel manufactureres including Levi Strauss, Wrangler and many others, it is no more. El Paso, Laredo, McAllen, Brownsville as well as San Antonio were coveted by New York designers for production of their brand. Although Dallas still sees a good level of apparel merchandising business it does not compare with the 70s, 80s and into the 90s. Now, Los Angeles California, alone, has become the hotbed of apparel design and manufacturing for the nation on par with New York.

That said, I want to go to California. I know Jed Clampett would say if the good Lord had wanted me there he wudda put me there. Truth is I was born in south Texas, but grew up in California.

My reasons and interest in California (as a place to live, it faded in my rearview mirror years ago) lie in its position in the world of apparel manufacturing, to be specific. Up until three years ago Texas vied for position among the top five states with New York being a far distant second to California. Texas is number one in the number of displaced apparel workers. In more recent years, that hierarchy has undergone a makeover with Pennsylvania and Connecticut entering the mix. California remains in a distant first place.

Now, I know we hear a lot about business and government partnering to eradicate sweatshops out of apparel manufacturing. However, I remember when my wife and I lived in Alhambra bordering on the east side of Los Angeles. Almost without fail every central American I met worked in apparel manufacturing as they had back in their countries and every one of them knew many others in similar life and employment situations. The media in the 80s often reported there were more central Americans, particularly Salvadoreans in Los Angeles than in El Salvador.

I believe the Independent Contractor Network model suits American and foreign workers who possess the KSE to create apparel. As entrepreneurs they can create apparel for independent retailers. IC-Networks generate residual income for them and their families. That holds far greater promise and value for them than California's top ranking or the hot apparel brands they crank out on the production floor. But, _ first comes Round Rock, Austin, then Amarillo, Wichita Falls, Dallas, Fort Worth, Waco, Abilene, Houston, El Paso, Laredo. . .

Sunday, January 06, 2008

The Outsourcing Song

I had a history professor in college who expounded, "Government exists to do what we cannot do as individuals." At the time it sounded good. It sounded true. I no longer accept it.

Now, I am not going to advocate doing away with government. I am steadfast to the biblical exhortation regarding the rule of authority as being from God. Lets continue to work to improve, rebuild, and in some instances, restore its function as intended in the Constitution. I would like to see less government intrusion, myself.

So, I am perplexed when I hear opposing sides on the role of government singing two-part harmony on outsouring: The song calls for government to stop the greed of outsourcing by imposing heavy taxation of corporations. Government should get back those jobs outsourced overseas.

Exactly, what is the magic number which constitutes greed?

It is easy to throw off on business corporations and rail on them about their greed and all manner of evils, but what are you willing to do? I once heard someone define greed as that amount, which those making the accusation, has eluded. That is, for those who do alright or scrimp on 30 thousand a year, 35 would be better, maybe even 45 or 50, but over 50, well, that's just greed. Those who live in the 50 thousand bracket might draw the greed line at 100 thousand.

Generally, individuals, like corporations, do not expend their energy and resources to just get by. Ideally, they both drive for that threshold where the unimaginable comes true for them. When they do manage to attain that they either build up a huge savings account or become employers to those who are quite content with getting by with an amount just this side of greed.

I would venture to say many, though certainly not all, those who want government to solve all the national problems which affect them probably do not believe or excercise the power of their vote.

It occurs to me many of the jobs that go abroad could be re-established in America through independent contractors. Whether low or high tech, apparel or computer making, these represent just two industries that can be replicated in your community by those same layed-off workers. There's nothing wrong with those eager workers. Between them they possess the Knowledge, Skills and Experience to make the apparel, assemble the computers; the same resources which bustled on the manufacturing floor. Both of these can easily be performed in the individual's home, under their schedule, childcare cost free with a work load they determine
for themselves.

The recent China toy scare serves to illustrate my point. There are at-home, cottage industries in the US northeast which suddenly found themselves overwhelmed with orders during the holidays. Like toymakers, there are apparel makers and computer builders who are quite capable of replicating what they do on the production floor in their homes. They include, designers, pattern makers, cutters, seamstresses and computer hardware and software installers, technicians, electrical and software engineers, hobbyists and more.

I once read a CEO's explanation why his company would not be quick to jump on the outsourcing bandwagon. He said, companies incur transportation and tax expenses to ship those goods to America as well as having to deal with cultures that oftentimes do not possess the American work ethic corporations were built on and to which they grew accustomed. As if these factors were not enough, there are inferior infrastructures which simply are not able to handle the demands of a new high energy consumption and maintenance plant in their neighborhood even in tech-coveted locations like Bangalore.

Two lessons would-be apparel and computer independent contractors can take from American corporations: Leverage tax law and create alliances. A corporation, by its very nature leverages tax law to its advantage. Alliances are an old trick in the book corporations resort to even with rival competitors when it is of mutual advantage. Corporations will not go it alone if they can help it and thereby minimize potential losses through an alliance or partnership with another company.

Our federal government recognizes contractors as sole-proprieterships, or businesses, and as such they can leverage tax law even more so when they are LLPs, LLCs or other business entities. Nobody can stop or prevent you from creating your own business and generating your own income. It's far more proactive for your family than crying about corporate greed and outsourcing. The song doesn't have to remain the same, with apologies to the 70s heavy dirigible. It's in your hand to do something about it.

The IE-Network model creates alliances and facilitates dialogue between independent (enterprises) contractors and retailers, whether in the apparel or computer industry, to replicate the production floor manufacturing model in their communities through at-home enterprises. The Independent Enterprise Network model enables members to generate income three different ways; personal, residual and bonus overrides.