Supply Chain & Ecommerce Master Class

august 2012 JOIN US ON > THE GREAT FACEBOOK PUPPY DOG AMBUSH PAGE 15 > EMAIL > ONLINE DELIVERABILITY RETAIL PAGE 18 ESSENTIAL LEARNINGS > 7 COSTLY PAGE 28 EMAIL MISTAKES > WHEN NEVER PAGE 22 TO USE A COPYWRITER > HOW TO PAGE 30 DETECT DUPLICATE > CONTENT CONTENT CURATION PAGE 25 PAGE 31 RUSLAN KOGAN SUPPLY CHAIN & ECOMMERCE MASTER CLASS >> THE ORIGINAL AND BEST INTERNET MARKETING MAGAZINE DESIGNED SPECIFICALLY FOR THE IPAD, IPHONE, ANDROID AND THE WEB From the Desk of the Editor getting good value from Internet Marketing Maga- Last month was a great month for Internet Market- ing Magazine with the ‘Monetizing eBay’ with Matt minute of your time and click this link to give us Clarkson a real talking point. a quick honest review (click ‘view in iTunes’ then scroll down and click ‘write a review’, thanks :). Chain & eCommerce Masterclass’ Ruslan Kogan In- terview audio in the ‘Audio Expert Interview’ sec- Until next time… Wishing you the best of success tion of the member’s area. Ruslan is a revolution- online ary thinker and Entrepreneur. His skillset is vast and deep and the full interview is not to be missed. It’s free; so if you haven’t been sent your link to the member’s area please feel free to register for it today at http://internetmarketingmag.net/be- come-member/ GregCassar Important: We’re working on building the number Greg Cassar of reviews we have on the Apple platforms so as to Internet Marketing Strategist keep dominant rankings in the search. If you are & Editor – Internet Marketing Magazine internet marketing magazine august 2012 5 > EXPERT INTERVIEW SUPPLY CHAIN & ECOMMERCE MASTER CLASS An Interview by Internet Marketing Strategist Greg Cassar Ruslan Kogan is a product and industry innovator and an outstanding eCommerce success. Kogan Technologies is a manufacturer and retailer of consumer electronics devices. Founded in 2006 by Ruslan Kogan, it sells products direct from Asia to customers in Australia and the United Greg: Ruslan, it is my understanding that you - so essentially it is manufacturers direct to con- were an entrepreneur even as a child. Can you sumer. We are using advanced analytics in order tell us a bit about that? to determine what consumer electronics products are in demand and what consumers actually want. Ruslan: A big part of that is Google searches, and know- of ten, so I’ve always been wheeling and dealing ing how many times certain words and terms are and trying out new things. I love the market place searched, based on what people are looking for and business and essentially for me that’s what an and what they want to buy. entrepreneur is – someone who looks at the market place as it currently is and tries to invent a Then we’ve got manufacturing capacity over in new way of doing things that creates extra value Asia. We get all the products manufactured in for the consumers. China and then sent to our distribution facilities in Australia and the UK, and then sent directly to So, for me as a ten year old I ran a business where the customer. So it cuts out all the middle men I was collecting and re-selling golf balls; then I ran and enables us to be a price leader in a very com- a car wash business. Through high school I had a petitive market place. website design business and a mobile phone repair business and all of that sort of stuff. So, I’ve al- Greg: My take on it is that your business produces ways been active in the business world. products the same quality as Sony or Samsung etc with even much of the same componentry, but it Greg: I can really relate to that, because in high is branded as Kogan. Is that correct? school my school shut down the junk food in the Ruslan: Yes, agreed. We make a very good prod- lockers and set up shop – I bought confectionary uct, but being an Internet business we leave that wholesale and set up a business that was doing 50 up to the consumer. So, if anyone asks us how good is your product, we tell them, well, don’t So, I can very much relate to what you’re saying take our word for it, go online, read reviews, read there. what people are saying about Kogan, read what they are saying about our products, our customer The Kogan business model is different to most service and all of that sort of stuff. We think the electronic retail in that it has a whole bunch best opinions on any product are from the users - who are actually using them. plain the Kogan business model for those who That said, the componentry in our products, like an LCD panel makes up the majority of the cost of Ruslan: We do things pretty differently at Kogan a TV. And we’re using panels from Samsung and LG internet marketing magazine august 2012 7 and other big brands. So what a lot TV’s and our business will ramp of people don’t know about LCD up over time. They laughed at me and LED TV’s is that, even though and they weren’t interested in there are thousands of brands out the order at all. Because the way there that essentially there’s only China works is it’s all about mass a win/win situation.” a handful of manufacturers of the production, you need to do things core component - being the LCD in huge scale in order to gain that So I sent them all of the market- panel, and no matter which brand ing material and pricing stuff that you get, the panel, is made by one make it worthwhile for them to I had re-done for them and I got of those big brands. set up a production run and a pro- a reply from them within hours duction line for you. So initially saying, Greg: The manufacturing of they didn’t want to work with me. much for all of this. We accept your own product range is very much one of the keys to your But the way that I view business success. What strategies did you is that it’s all about creating a . use to get the factories in China win/win situation. So, I lost a bit to take you seriously when you of sleep over the factory knock- What happened after that was a were just a start-up? ing back my order and I thought week later they emailed me and “how can I ensure that this is a they said, Ruslan: That is a very good ques- win/win situation for both of us?” tion because you are a hundred So, the idea I came up with was percent spot on. The only way to pretty simple actually, because I be really competitive in the con- don’t know if you’ve dealt with the US”. So it had helped them sumer electronic space at the mo- China before but even the big- ment is to be the manufacturer gest factories in the world, these direct to consumer. It’s such a multi-billion dollar organisations, competitive market place that they still don’t know how to deal that’s the only way to make a sus- with the western world. All of tainable margin, whilst offering their marketing material is in Ch- your customers the sort of value inglish - none of it makes sense. that will keep driving them back They’ll use images that are differ- to your business. ent sizes and model lines are not in proportion. When Kogan was starting out I had zero dollars start up capital. Their pricing spreadsheets will I had no money in the bank, and - my initial production run was for ing is aligned, numbers will be Kogan TV’s one container - I wanted to pro- centred rather than right aligned and all of that. So, I stayed up for Greg: That is very clever. You the massive factory to cooperate a couple of days and re-did all of were able to engineer a win, win with, initially I had told them that this for the factory that I had cho- there. I know that you’re also we’d planned to place an order sen to work with and made all of stocking other brands now, like for a hundred thousand TV’s. So their product brochures look real- Apple, Samsung, HTC etc. And they were pretty interested in the ly professional. I made all of their often you’re able to sell for far business and we’d discussed the user manuals very detailed and cheaper than much of your tra- order and I put it out for tender made them make sense. I re-did ditional competition. What do and then I picked the best factory all of their pricing spreadsheets. you think you’re doing right to and wanted to work with them - Then I emailed the factory back buy so well from major brands then when I told them the order and I said to them, “I know that that others may be are not? internet marketing magazine 8 august 2012 Ruslan: budget. And what we saw very quickly is that our we have done with the other brands stock now is we’ve created a business model that positions us as a global price leader. Our prices on Canon and Nikon ten friends about it. And the ten friends would look cameras and Apple iPads is even cheaper than cus- at it and tell all their friends about it.

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