Apex Digital and bargain culture | PVRblog – It is incredible to think of a company less than 5 years old, with about 100 employees, selling over $1 billion, being second in marketshare to Sony (at least within the category of DVD players.) Apex seems to have converged at a point between the globalization of manufacturing and labor, the distribution of big-box retailers in America, and this “bargain culture,” by providing product cheaper than any other competitor. We have had low-cost brands in the past, but Apex seems to be a different beast. They seem to be exploiting every possible advantage in the most efficient manner. It is very impressive.
It seems that Apex’s value add is their knowledge of cheap manufacturing sources in China combined with access to the channel in the US. Since so many Chinese nationals undoubtably have equal or better knowledge of the manufacturing climate, I wonder how long it is until the channel decides to cut out the middleman. What happens to Apex if next year Wal-Mart decides to go straight to a large Chinese manufacturer to shave off a few dollars?
While Apex has had rapid growth, their position in the marketplace seems to be far from secure. Especially since their biggest selling point is that they are the lowest cost manufacturer, I think most of their customers would be willing to jump ship.
I’ll be interested to see if they make an attempt to move up in the market place, or try some technique to gain repeat buyers. Unless of course, they are willing to treat the manufacturing of consumer electronics like procuring comodity raw materials. Procter and Gamble has low margins, but they more than make up for it in terms of volume. Perhaps Apex is going to try the same? Intentionally keep their profit margin low enough to prevent other players from entering the market.
Apex
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Apex Digital and bargain culture | PVRblog –
It seems that Apex’s value add is their knowledge of cheap manufacturing sources in China combined with access to the channel in the US. Since so many Chinese nationals undoubtably have equal or better knowledge of the manufacturing climate, I wonder how long it is until the channel decides to cut out the middleman. What happens to Apex if next year Wal-Mart decides to go straight to a large Chinese manufacturer to shave off a few dollars?
While Apex has had rapid growth, their position in the marketplace seems to be far from secure. Especially since their biggest selling point is that they are the lowest cost manufacturer, I think most of their customers would be willing to jump ship.
I’ll be interested to see if they make an attempt to move up in the market place, or try some technique to gain repeat buyers. Unless of course, they are willing to treat the manufacturing of consumer electronics like procuring comodity raw materials. Procter and Gamble has low margins, but they more than make up for it in terms of volume. Perhaps Apex is going to try the same? Intentionally keep their profit margin low enough to prevent other players from entering the market.