Author Topic: Bargain Culture  (Read 1701 times)

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Offline kimmy

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Re: Bargain Culture
« Reply #60 on: December 10, 2017, 01:18:02 pm »
I did not get that impression from the article. It seemed like they were giving away all of the important features and it is not clear what was left for people to buy. In theory, this would address my point. The question is are the services that people would pay for?

It appears I misread the Wyze website.  At first glance I thought they were giving a 14 day trial on cloud storage, which subscribers would then have the option of paying for.  It appears that they are actually giving away 14 days of rolling cloud storage for free. (ie, the last 14 days of footage from your camera are stored on the web, for free.)  That's pretty astounding, as Nest charges $10 a month for that.

Apparently their plan is simply to own this market by killing the competition on price, and to make money on low-margin, high-volume sales.

I can't imagine somebody who's sitting on the fence about trying a home security camera looking at a system that's $250 plus $10/month vs one that's $20 period, and deciding to go with the $250 system.  A $20 price would probably lure people who hadn't even considered buying a security camera to give one a try.  I sometimes have panic attacks that I might have left the stove on... why not spend $20 and point one of these right at my stove so that whenever I have a panic attack, I can whip out my smart-phone and look at my stove to assure myself that it's off.

Personally, with a 700 sq ft apartment, I would probably want one for the main entrance, and possibly a 2nd facing my balcony entrance.  For somebody with a bigger home or a yard, they might not stop there. If they really liked the product, they might buy one as a baby monitor, and another one to cover the front yard to catch the neighbor in the act of letting their dog poop on your lawn, and another one out back to record the antics of the neighborhood raccoons. There's some potential for recurring sales just from people thinking "another one of these would be handy in the rec-room." At $20 a pop, it becomes something people might add on a whim rather than a substantial investment and recurring financial commitment.

And it does have an obvious potential to expand into related products (smoke and CO2 sensors and door sensors obviously come to mind).

Lots of companies doing this already. Who is in a better position to take advantage: ADT which already offers all of the above features and adds Wyze cameras to its line up or Wyze developing completely new services which do not appear to be part of their sale pitch today.

ADT has been around for a long time, and hasn't exactly set the home market on fire.    The existence of companies like ADT hasn't deterred companies from attempting to sell their own security systems directly to consumers. When I was a Costco member I used to always see Swann or Lorex products for sale in Costco.  So apparently Swann and Lorex felt that ADT and their peers aren't delivering what the home consumer is hoping for. And the existence of consumer products like Swann and Lorex hasn't deterred people like Nest and Blink from jumping into the same market. So apparently Nest and Blink feel like the Swann and Lorex didn't get it right either.  And the existence of ADT, Swann and Lorex, Nest and Blink, has not deterred Wyze either.

They obviously think the hassle and expense of existing devices in the market is a big barrier for consumers, and are gambling that their low-cost, high-functionality devices can make a big impact on what's a potentially large market that's not being well served.

Anker appears to have fairly wide product line. That gives them bigger potential volumes and avenues for repeat customers. Kershaw has high margin which is the typical business model for service/support driven sales. If Wyze succeeds selling a lot of cameras (they should) and then expand rapidly into wide range of remote monitoring products then it would be a compelling business model.

Wyze is already back-ordered, so they're apparently selling these faster than they can supply them right now.  How long the demand will remain high remains to be seen.  Maybe you're right, maybe it will fade off quickly, or maybe these guys will be around for a while.

That said, i did look more carefully into the s/w that they offer and it is underwhelming compared to what comes for free with more expensive cameras. For example, you have to have a mobile phone - there is no option to control via a PC or Laptop. This alone would mean I would not touch them.

You don't have a mobile phone?  Are you from the '90s?  You'll be able to access the Wyze cloud services through your web browser.  If they don't have it already, they soon will. That's the easy part of the project.

My reason for linking the article wasn't to make the case that Wyze specifically is going to be a success.  It was because I thought the role of Amazon in changing how people shop is interesting.

Once upon a time if you wanted to sell a consumer product, you needed to convince a whole bunch of brick-and-mortar retailers to make room for your stuff on their shelf. That's probably a full time job in itself. You go to London Drugs, and Best Buy, and Canadian Tire, and Home Depot and at each place try and convince the management that your stuff should be on the shelves in their stores. How do you even start to go about doing that? "Sorry, we've never heard of your company, and we already sell another product that's a lot like yours, so we're not interested. Better luck next time."    You have to advertise so that people even know you exist.  You have to physically get your product to consumers.  All of this sounds like a tremendous barrier for anybody who is just starting out.  And that's without even considering the primary barrier, which is making a product to sell in the first place.

Amazon doesn't solve the last item, but it does help with the rest.

Distribution? Amazon is probably the best in the world at distribution.  Space on the shelf?  They have acres and acres of shelves. If you want space on their shelves, you just give them a cut of your sales, and the space is yours. Give them a bigger cut and you can be a "Prime" partner. Space on the shelf at one of the world's biggest retailers is yours.

Marketing?  I don't know how you guys shop.  But for me the first step isn't to walk around brick-and-mortar retailers.  My first step is to get on Google and do a web search for the kind of product I'm interested in. 

So I'm looking for a USB hub. I go on Google, I type in a search, and the results that come up are... ok, some sponsored results from Newegg.  Right below that, an ad from Amazon.  I click on that, because I get free shipping from Amazon.  Their results come up with... ok, a couple more sponsored results from a company called "Cable Creations", and the "Bestseller" result is ... Anker. A grand total of 3 clicks and I've arrived at some company that for all I know could be a college student who answers a few emails while he studies for his classes.  (this is pretty much exactly how I bought an Anker USB hub a couple of years ago, without putting any thought into how it landed on my desk.)    Wyze, same type of thing.  Wyze isn't sold in Canada yet, but if I go on US Amazon, same sort of deal... some sponsored results, some gift-guide results, and Wyze listed as one of the bestsellers.

I have a hunch that I'm not the only one who shops this way when looking for consumer products.  If I'm looking for clothes and shoes, I have to go shopping in person.  If I need something large I still go to a brick and mortar store.  If I need something in a hurry, or if I'm buying food, I go to the store.  But most kinds of consumer products, online shopping is now my preference.  And the way Anker has done things-- leverage Chinese manufacturing plus the distribution and customer reach and marketing potential of Amazon to build a brand-- has the potential to bring Bargain Culture to consumers in a way that traditional retailers don't.

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