Resultco is not a normal watch company. Bricks and mortar are foreign words to this American fashion accessory manufacturer, whose business plan is based entirely on utilising the increasingly prominent and active watch ‘e-tail’ audience.
Having enjoyed impressive levels of success across the Pond, Jeff Freedman, a Partner at the company, is now setting Resultco’s sails for the United Kingdom. When WatchPro spoke to Freedman, it soon became clear that its unique approach to selling watches and its ‘guaranteed profit’ claim are more than just hot air and should actually all be taken rather seriously.
In a nutshell, the Resultco proposition is to place its products (it has 15 watch brands listed on its own web page) on a watch retailer’s website. It doesn’t matter whether it’s a high street chain of jewellers, a deal site or an online watch e-tailer, Freedman says that the mutual benefits to having Resultco’s brands ‘stocked’ on a watch retailer’s website are numerous and irrefutable.
The first topic to tackle with Freedman is the ‘guaranteed profit’ claim that Resultco makes to prospective online retail partners. Surely this sounds too good to be true? Not so, says Freedman.
“We can provide a programme that guarantees a profit stream with no inventory investment,” Freedman boldly declares. What he is highlighting is the fact that it costs nothing for a retailer to list extra stock on its website (except for a few pennies in IT admin costs).
In a traditional high street jeweller, space is always at a premium, with the biggest brands commanding the biggest physical area to showcase their products in the shop window and inside the store. So, for the owner of the store, there is constantly an opportunity cost attached to any space it allocates to a specific brand. E.g. if they give Omega an extra display in the window, this is space that Rolex won’t be able to have, and vice versa.
This goes some way to explaining some high street stores’ reticence to stock unproven brands, as they will be taking up shop space that can’t be used for anyone else.
By selling through online channels only, Freedman is making the point that it is riskless and costless for websites to take on his plethora of brands, especially as he asks for no up-front investment from the retailer. If they list Resultco’s brands, they will get a share of any sales that come in. If no sales come in, then it’s cost them nothing. It’s what some would call a ‘win/win’ situation.
Freedman keeps coming back to this ‘zero investment, guaranteed profit’ point to make sure that the message gets through loud and clear. “If a traditional high street retailer loads our images with content on their site, sales will happen. No investment but pure profit. If they promote our product via email only and get sales, the only expense is sending the email; we will develop the mailer. Retailers have nothing to lose by listing our brands.”
Compelling as this sounds, one of the issues that Freedman faces, and that he says he regularly has pointed out to him by curious retailers, is that no-one has heard of any of the Resultco brands. A potential customer will ask: “Who will buy a watch from a brand that they’ve never heard of?”
Unsurprisingly, Freedman has heard these sorts of questions umpteen times before, and his answer is therefore appropriately well-versed and fine-tuned.
“We overcome this objection after the first sale,” he asserts. “An internet site in England refused to sell the Bertha brand, yet after some begging they approved the sale. They sold $43,000 and made 50% profit and never touched the goods. Today we have multiple promotions weekly with this account, selling all of our brands.”
‘One swallow does not a summer make,’ some naysayers may cite. But Freedman insists that this simple but effective business model has worked time and time again, going as far as to claim that “We have never failed at providing a profit for any dealer.”
But how did this one unnamed retailer and, for that matter, all the other websites that Resultco have successfully partnered with, attract such impressive sales for such lowly brands? How does your average consumer even known about brands like Reign, Bertha or Heritor, let alone buy them online in large quantities having never seen or touched them in the flesh?
The key, says Freedman, is in driving traffic from search engines. He says that the large number of brands and models that Resultco puts on a retailer’s website pushes that site higher up the hugely coveted Google search results list, which not only benefits his own brands, but also generates noticeably more online traffic for the retailer. He identifies this as being yet another key benefit to working with Resultco.
“Greater content aids SEO for the website,” explains Freedman. “If a site has 5,000 watches to select from and another site competes with 300, more content will get greater placement when searching. The search engine will present the 5,000 item website before the 300 selection one, regardless of name brands.”
He reiterates his point that the ‘name brands,’ as he calls them, should work in harmony with his own lesser known brands and that the two should complement each other in the eyes of the retailer. “Use the name brands to bring consumers to the site, then promote products that increase profit. The joy of shopping is finding a unique product that will enhance the owner. Getting a great deal is a plus too.”
One of the key aspects of the Resultco offering is the heavy discounting of its watches, which is commonplace online. It is accepted that this is a big turn-off for a lot of traditional high street jewellers, who don’t want to damage their own name or that of the watch brands they are selling by discounting established brands online too greatly.
Freedman points out that this isn’t an issue with Resultco watches, as there is no reputation or ‘brand’ to protect. “With our brands we market exclusively online with nobody owning inventory. A traditional watch retailer could market a promotion with sales of 50% to 75% off retail and still make their expected profit. When and if the retailer sells a watch, they simply email the order to us and we ship to the end user. They receive the funds at once and pay us 30 days later. We handle all returns. The retailer made a profit and never touched a product.”
In an industry where ‘the brand’ is everything, it is refreshing and enlightening to hear about a watch manufacturer that considers this to be the least important element of its business model. In layman’s terms, Resultco is simply asking to tap into the customer-base and audience that established retailers and e-tailers have online. Once it is allowed this access, revenue and profit tend to follow for both Resultco and the retailer in question.
If there is a general consensus that the internet is playing an ever greater role in the watch industry, then caps have to be doffed to any company that bases its whole strategy on capitalising on this growing trend. Whether or not it proves to be successful in the UK is now the burning question, but one cannot help but admire the daring Resultco approach.
There is an adage in life that ‘if something sounds too good to be true, it probably is.’ Resultco, with its unique approach to online retailing, may well be the exception that proves the rule.