Re: Whould YOU travel for a great deal on a new boat?
I don't think the issue of selling in Minnesota only is a problem at all. In fact, I think it makes alot of sense. Keeping the initial effort to a 500 mile sales radius allows for a focused marketing plan and it will make "selling" the principals of the company alot easier. I also agree that Minnesota has a large boating market.
I do think you are still missing an important point, however. The analogy in regard to Dell is not even close in terms of its relationship to what your friend is proposing, and neither are your figures.
Michael Dell started selling computers out of his dorm room, one at a time. His first real effort at a mass produced PC was the "Turbo PC," in 1985. He sold it for about $800 at a time the price point for PCs in general seemed to be about $2,000, not $5,000 to $6,000. In fact, I can't think of any time in the history of a basic PC, when an "average" PC would have cost $5,000 to $6,000. At the time, there were tons of people selling "knockoff PCs" via local advertising and discount electronic stores. The individual store owners were getting the units direct from Taiwan, etc. Some of them were even buying the parts and assembling the units at the stores. I know these things, because I bought my first PC at that time.
Dell, was not marketing via the internet then, because essentially no one was marketing via the internet at that time. In fact, widespread use of the net for any purpose, did not begin until later on. What Dell did was to advertise in magazines, for direct sales and direct shipping. This really wasn't all that different than direct sales via a store that existed anyway, but happened to be selling other types of electronics.
What made the Dell take off was the price, but the concept is not the same as what you have been talking about. All of the generic PC makers were buying their components from the same places and anyone who was paying any attention at all, knew that. So, you could buy "this" PC for $2,000, or you could buy "that" PC for $800, knowing that essentially the same parts were in each. That made the decision pretty easy - there wasn't alot of risk in terms of the basic machine.
Gambling $800 is also vastly different than gambling $25,000 to $30,000 on something that could easily be radically different in quality. Once again, most people don't just plunk down that kind of money out of "spare cash," they go to banks and that changes things in a big way.
Another area of caution that I see, is that I think you started this thread with a conclusion that had already been arrived at. It also sounds like you have more than a casual interest in this venture. You've been given some pretty good advice, and you have pretty well argued against all of it. At the risk of sounding sarcastic, I would say that you need to worry less about buzz words like "paradigm shift" and more about a shift in your own thinking - going into something without a willingness to accept info, whether you agree with it or not, is a sure prescription for failure.
The idea isn't a bad one. What I think needs to go along with it, is a solid and broad based business plan that includes all aspects of the pre startup issues and plans, the startup items and
all of the usual items like marketing, advertising, finance, budgeting/cash flow, production, sales, yada, yada, yada. As long as the plan reflects the reality of the current economic environment, as well as your local market envinronment,
and you have adequate working capital, the venture just might be do-able.
Proceed with caution, proceed with planning, proceed with realism and proceed with determination. After all of that, who knows, you just might be shipping some boats to "looooooooooziana"
in a few years time.
