Saturday, August 16, 2014 1:30:43 PM
And all of this operating out of a 2000 sq. ft. space in Tustin, CA with no cash on hand, $100K worth of product to sell currently and distribution in only one small area of one state. That's a pretty tall order as far as $1 billion in sales or half of Grey Gooses market who has a $50 million plus ad and marketing budget at the least.
The forecast numbers are really getting ridiculous in certain respects and seem to be no better than throwing darts. Can any of these forecasts be backed up with numbers? I've never seen any. It's as if revenues will just appear out of midair from non-existent magically appearing inventory.
Ok, another topic. Had a long discussion with a friend who worked with Costco. He did 300-400 road shows a few years back with a food company. He had some very good insights. First, anyone can get in pretty much. Just need to sign a contract and put all of the product on 100% consignment. No purchase order. Every night the vendor is emailed or faxed a record of each store's activity for the SKU and total sales for the given day and the company is paid for whatever went through the register at the end of the month. Depending on the initial deal, a test market requires some co-op cost without in store demos. If and when demos are done, the vendor is steered to a company called CDS who assigns temps to do the in store promotion at a cost of $25/hour.
Here's some good insight he had on the road shows too. With no road show, just stocking, sales were ok, not great. With CDS personnel on site it improved many fold. With his own personnel he'd sell out easily. He said the traffic was incredible and would go home absolutely exhausted. He did demos in stores from Puerto Rico to New York to San Francisco. Costco apparently loves the in store demos. If you want to do it, they'll do it because they sell through. He himself traveled to many a Costco shedding his suit and tie for a smock and a hair net working the crowd. No reason Marani couldn't do this but they choose not to. Why?
My suspicion is they just don't care. It costs money that could otherwise go in their pockets or to Zodiac where Margrit most likely has a financial interest an takes a cut. They just want to make the announcements about it and watch what happens to the stock. Who cares about selling $5,000 worth of Vodka a day when you can unload $60,000 in stock in an hour on the impression and interpretation of the announcement? Why spend any more money than necessary to get the desired effect? It all ties to the rest of the shoddy PR, events and half baked marketing efforts. It's all about the spin and the stock sales. There's no reason Marani could not be in many other stores by now. Furthermore, they have been getting sales reports DAILY from Costco and have refused to submit or report anything other than vague comments regarding "good sales" and unconfirmed "reorders". I would just like to hear someone back up these revenue forecasts with something material other than "it tastes good".
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