Announcement from Jonathan Pengilley of Habitech Limited
I am excited to tell you about the launch of Tecblu. I formed Tecblu as a completely separate company to Habitech. The reasoning here is to position the new company as a completely separate entity from Habitech offering obsolete Habitech products as well as specific lower cost tech products with a much lower level of support that would normally be expected by Habitech’s regular customer base. Charles Redgrave-Plumb is heading up Tecblu and he comes from website design and the internet trading market sector.
Over the last couple of years, we have been approached by a number of manufacturers that want us to represent them but we turned these opportunities down as there was a conflict with our existing brands or the margin model did not work for Habitech and its Integrators.
Over the last few years there is a whole new category of products emerging, sometimes called the I.O.T (Internet of Things). The Habitech model is a proactive business with a high cost of sale and full support, it clearly sits in the high priced, high margin market selling to wealthy people through specialised integrators that also need healthy margins to support their high cost of sale and high engineering costs. Whereas the I.O.T. model is low margin, high volume with minimal support.
We believe these two markets have to be served very differently and therefore a completely different structure is required. Ring is a good example of this new IOT market. We dismissed Ring due to margins and the multi-channel model. A few months later a CI Integrator approached Habitech and suggested we distribute it. It was available through Amazon, John Lewis, Costco, Argos, etc etc. Our margin was 10%, the dealer margin was 20% and the end user price was £150 so £15 for us and £30 for the Dealer. How many would we have to sell to make any money and how could we support it with £15 profit? However, I subsequently found out that Ring'srevenue last year, the 3rd year of trading was $400m!
The world of IOT is growing fast and there are certain products that some end users can configure themselves but a lot of end users want a professional to install the device(s) and we want to grasp the opportunity to serve this sector where margin expectations are 10%. We would encourage you to look at some of these great new mass market IOT products but like us we would strongly recommend that you have robust business plans and that you are ready to compete with those Internet Resellers who make 10% on hardware and charge heavily for labour. In very simple terms, we need to learn from electricians, the IT industry, the security industry etc. Please don’t get me wrong I am not for one minute recommending the 10% margin model as a standard approach for all of today’s Habitech customers but as an industry we do need to consider how we charge our clients for our goods & services.
We hope this email clearly lays out Tecblu's market positioning.
Jonathan Pengilley and Charles Redgrave Plumb
- Tags: Announcement
- Charles Redgrave-Plumb