WELCOME TO SCOE

Presentation Title:

“CREATING UNIQUE PRODUCTS FOR EBAY AND AMAZON WITH

PRIVATE LABELING AND PRODUCT BUNDLING”

WHO AM I?• My Name: José Calero

• Our Company: LapWorks, Inc.

• Founded: April 1, 2000

• Product Category: Consumer Electronics

• Online Since: June 2001

• Online w/Amazon Since: July 2010

• Number of Products On Amazon: 90 Plus

• 2013 Sales: $1,070,000.00

• 2013 Net Operating Profit: 20%

WHY PRODUCT LABELING IS IMPORTANT

• Product labeling is important for many, many reasons. But first and foremost is . . . .

• Registering your product or company's Intellectual Property on Amazon's Brand Registry

• This would include patents, copy rights and trademarks • Once registered, it works in your favor when a conflict arises with a poacher • Poachers who list under us don't usually copy your logos • So if you're IP is registered w/Amazon it becomes the club you use to remove the

poacher • Even if poacher has same exact product but without your branding, you win the

dispute • The way to get over these poachers is to differentiate your products –

individualize them • Poacher Defined: I call a company who lists their product under yours at a

cheaper price a poacher. Other names would be mugger, assailant and robber

WHY PRODUCT LABELING IS IMPORTANT(Cont’d)

NOTE: For those of you interested in pursuing a Trademark inexpensively, Skip had an article in a recent newsletter for a service that will process a Trademark application with the USPTO for just $149.00. Hers's their URL: http://www.mycorporation.com/

WHY PRODUCT LABELING IS IMPORTANT(Cont’d)

• To deter competitors - show an image of your logo and/or label on your product page

• Heard from a poacher: “would not have copied us if we displayed our brand label on the product

• Logo labels for your products must look and feel like they were created specifically for the product – not an afterthought

• Label color, size, placement, font, shape, material, adhesive are all important

WHY PRODUCT LABELING IS IMPORTANT(Cont’d)

Source: knowthis.comTitle: Labeling – page 1

Most packages, whether final customer packaging or distribution packaging, are imprinted with information intended to assist the customer. For consumer products, labeling decisions are extremely important for the following reasons.• Captures Attention - Labels serve to capture the attention of shoppers The

use of catchy words may cause strolling customers to stop and evaluate the product.

• Offers First Impression - The label is likely to be the first thing a new customer sees and thus offers their first impression of the product.

• Provides Information - The label provides customers with product information to aid their purchase decision or help improve the customer’s experience when using the product (e.g., recipes).

WHY PRODUCT LABELING IS IMPORTANT(Cont’d)

Source: knowthis.comTitle: Labeling – page 2

• Aids Purchasing - Labels generally include a universal product codes (UPC) and, in some cases, radio frequency identification (RFID) tags, that make it easy for resellers, such as retailers, to checkout customers and manage inventory.

• Addresses Needs in Global Markets - For companies serving international markets or diverse cultures within a single country, bilingual or multilingual labels may be needed.

• Meets Legal Requirements - In some countries many products, including food and pharmaceuticals, are required by law to contain certain labels such as listing ingredients, providing nutritional information or including usage warning information”.

WHAT'S A COUNTERFEIT AND WHAT'S A KNOCK-OFF?

Source: Internet Retailer MagazineTitle: Direct From ChinaDate: August 2013 • A counterfeit item carries a federally registered trademark

and it's not made by the trademark owner

• A knock-off emulates the style and appearance of a brand-name item, but doesn't include the trademarked logo

HOW TO REMOVE A POACHER'S WEBSITE WHO’S VIOLATED YOUR TRADEMARK

Source: Internet Retailer MagazineTitle: Direct From ChinaDate: August 2013

• “Taking advantage of the Digital Millennium Copyright Act of 1998, you can seek to take down an offending site for trademark violations.”

• “The law enables the holder of a registered trademark to petition a web hosting firm to close a site that's violating its trademark. If a firm does not comply, it becomes liable for legal damages.”

• We call this the nuclear solution for IP infringement

WHAT IS PRIVATE LABELING?

• Private labeling is another way to protect your products from those pesky poachers

• Private label products and services are typically those manufactured or provided by one company for offer under another company's brand

• Generally private labeling requires higher minimum than normal order quantities so it may not be right or everyone

• Another definition of “private label” is when the brand is owned not by a manufacturer or producer but by a retailer or supplier / distributor who get its goods made by a contract manufacturer under its own label

• “Private Brand” is another name for private label

WHAT IS PRIVATE LABELING?(Cont’d)

Source: WhiteHall Products - Specializing in private label productsTitle: Private Labeling Made Easy

• “Private label products is one of the hottest trends in retail today! And, why shouldn’t it be? Why would you want to sell someone else’s product when you can sell your own?”

• “At WhiteHall Products, we can customize and create a private label for your business (or customer) at no additional charge to you. So, it makes perfect sense (and cents) to have your own private label these days.”

• “More and more businesses are getting away from the ‘national’ brands and offering their customers a less expensive alternative through private labeling.”

• “Though the public generally used to see private labels as low-cost imitations of branded products, private labels have overcome this reputation and now more businesses are offering private label products these days.”

HOW WE MANAGE OUR PRIVATE LABELING

• Source: Lapworks, Inc.• Title: How LapWorks Manages its Private Labeling and Branding • Because we do so much work with China in particular, we have a partner in

Shenzhen, China who reworks all of our orders • He applies our logo labels and bar code labels to each and every product • Our partner maintains an inventory of eight different size logo labels

depending on the application • None of our 90 products being sold on Amazon leaves China without our

branding • Our partner also produces custom packaging of chipboard or cardboard

boxes for our products in small quantities as needed • We have been fortunate to find a partner in China who has been able to

help us grow our business

ADVANTAGES TO CUSTOMER OF BUNDLING

• Source: Upstream Commerce - The Retail Intelligence Company• Title: Bundle of Joy

• Advantages of bundling include cost efficiency, market opportunities to enhance profits, and more competitive pricing. Bundling might also encourage customers to look to one single source for several solutions

• Bundling allows consumers to benefit from a single, value-oriented purchase of complementary offerings

• There’s less confusion with studying (and ordering) several different products at the same time.

• The consumer can recognize cost savings of as much as 7 to 15 percent over the cost of purchasing the items separately

• The customer might enjoy additional discounts if they purchase larger volumes or more items from a single supplier

• Some consumers dislike bundling of the type of services like phone, music, and subscriptions, where they are required to order or receive a minimum that they won’t use to the fullest."

EXAMPLES OF BUNDLES WE’VE CREATED(Soft Grip iPad Handle)

Soft grip iPad Handle bundled with the Smart Cover and price increased and sales maintained.

EXAMPLES OF BUNDLES WE’VE CREATED(Wizard Desk Stand)

Wizard Desk Stand bundled with the larger MouzPad, Velcro straps, six elastic book holders and price increased and sales maintained.

EXAMPLES OF BUNDLES WE’VE CREATED(Shock Resistant iPad Case)

Smart Kids iPad Shock Resistant Case bundled with the Smart Cover and price increased and sales maintained.

EXAMPLES OF BUNDLES WE’VE CREATED(Armbot Tablet Mount)

Armbot Tablet Stand bundled with the C60 spring loaded holding bracket and price kept the same and sales increased.

SCREEN SHOT OF THIS PAGE

HERE ARE 10 BUNDLING TECHNIQUES AND ADVANTAGES (1 thru 5)

Source: Upstream Commerce - The Retail Intelligence CompanyTitle: 10 Ways Retailers Can Leverage Bundling Of Products To Drive Sales

• Pure bundling: Where you offer a group of products that are only available as a bundle and aren't sold separately

• Mixed bundling: Where you offer products that are sold both as bundles and as individual units)

• Cross industry bundling: Where you offer products from more than one company that complement each other. Product bundling may also incorporate products from multiple producers

• Premium bundling: Pursue strategies in which the bundled price is actually higher than the total of the included products

• New - or lesser-product bundle: If you bundle a successful product with a newer or less successful product; the stronger product will help the other product find its way into a new market

HERE ARE 10 BUNDLING TECHNIQUES AND ADVANTAGES (6 thru 10)

Source: Upstream Commerce - The Retail Intelligence CompanyTitle: 10 Ways Retailers Can Leverage Bundling Of Products To Drive Sales• Bundling increases speed: You can prepare and send out a package of bundled products

quicker than preparing a bunch of separate items and sending them out after gathering them.

• Bundling increases efficiency: When putting together the bundled merchandise, your employees can focus on one trip down the warehouse aisle to get the bundled package, as opposed to gathering individual products, one at a time.

• Bundling at a lower price point is an advertising opportunity: Lower price point is a great opportunity to advertise this fact; in your outreach, you may also touch potential customers who are focused solely on price.

• Bundling leads to extra sales: With bundling, customers order and purchase products they might not otherwise have considered or purchased.

• Bundling is a competitive tactic: Product bundling not only can lead to more customers and sales for you; it also makes it difficult for your competitors to track what you are doing and compare to your prices.

5 BENEFITS OF BUNDLING (1 & 2)

Source: ExperianTitle: The Benefits Of Bundling

While there are a few risks involved in offering bundled products , for the most part, the benefits of bundling products are many:1. Enhanced customer loyalty

- Customers are less likely to go to the trouble of unbundling services in order to switch providers. - Customers feel more connected to your organization on multiple fronts.(Both of these help to shield you from competitive displacement attempts

2. Simplified customer experience- Consumers enjoy the convenience of bundled services, which allows them to manage multiple services with a single billing statement and a single payment

- When money is tight, bundle customers will generally pay the entire bill, as opposed to paying only part of the bill.

5 BENEFITS OF BUNDLING (3 thru 5)

Source: ExperianTitle: The Benefits Of Bundling

3. Save provider time and money- Bundled billing reduces the number of bills sent each billing cycle, which means less paperwork for you and your customers. - Fewer bills sent also means fewer payments to process

4. Penetrate new markets - Partnering with a company, who has a bigger footprint in a particular

market, allows you to leverage that partner’s existing customer base - Bundling also can help you penetrate a new market with more competitive price points. 5. Easier and less risky up-selling path for larger share of consumer products and services - The partner, already having an established relationship with the consumer, will have an easier time up selling your product offerings to their customer base.

4 FACTORS TO CONSIDER BEFORE BUNDLING

Source: Brighter Minds PublishingTitle: The Importance Of Product Bundling

If the product combination is right, bundling will effectively open doors to new marketing channels. The decision to bundle often involves taking these four variables into consideration: • Volume: Bundling typically increases unit sales volume • Margins: Bundling can reduce margins or increase them • Exposure: Bundling may offer new channel opportunities or exposure to

new potential customer • Risk: If executed incorrectly, bundling may cannibalize more profitable

sales, resulting in lower contribution margins and potential channel conflict

4 FACTORS TO CONSIDER BEFORE BUNDLING (Cont'd)

Source: Brighter Minds PublishingTitle: The Importance Of Product Bundling

• These factors must be considered in terms of the revenue opportunity and exposure potential bundles offer

• Determine if bundling has a place in your marketing plan

• And how it will provide value for your customer and your organization

• It is important to be selective, but with the right bundle, everyone can win

4 BUNDLING TAKEAWAYS FOR RETAILERS

Source: Upstream Commerce - The Retail Intelligence CompanyTitle: Four Bundling Takeaways for Retailers

• Increase unit sales volume • Increase margins • Offer new channel and cross-industry

opportunities • Offer exposure to new potential customers

IN CLOSING . . . . . . . . . . SOME FINAL NOTES ON BUNDLING

• Bundling makes it more difficult for your competitors to gather pricing intelligence on your company and your products

• Remember to use your own competitive pricing intelligence tools to help you be aware of their prices and information 24/7

• Don't cannibalize your own more profitable sales, resulting in lower contribution margins and potential channel conflict

• Be selective in what and how you market, but, with the right bundle, you and the customer can both win

THAT'S IT FOR ME – I HAD FUN – HOPE YOU DID TOO

ANY QUESTIONS?