Do you have an idea for a great new motorcycle? Would you like to actually design and build it? We cover a lot of motorcycle builders here on The Kneeslider, from one man garage operations to small custom shops to startups, both well funded and shoestring plus the big guys from Honda to Harley Davidson. Some of you have indicated in comments that you are thinking of doing some design or building of your own, one of these days but first you need some funding, some skills, a place to set up your company and actually build the bikes, you know, all of the usual startup company necessities. It might surprise you to know, some forward thinkers have an idea of how to get around some, if not all, of these hurdles, so you can get started on that motorcycle (or any) business a lot faster, maybe right now.
Jeff Bezos, CEO of Amazon.com, is promoting the idea of using the capabilities of organizations like Amazon that are already doing something very well, who have some excess capacity and are willing to sell some of that capability and capacity on an as needed basis.
Virtual companies are nothing new when it comes to digital products and services, you can have almost any work normally done on a computer, done somewhere else in bits and pieces as needed by your business. But what Jeff Bezos is talking about is building physical products, like cars or motorcycles or most anything, really.
Before long, “user-generated content” won’t refer only to media, but to just about anything: user-generated jeans, user-generated sports cars, user-generated breakfast meats.
This is because setting up a company that designs, makes and globally sells physical products could become almost as easy as starting a blog — and the repercussions would be earthshaking.
Amazon is already renting out capacity on its computers, renting out its warehousing and fulfillment center, selling what it does best to people who need to do it. Suppose a car company has a bit of excess capacity, there are a few around from what I hear, or a motorcycle company or an engine manufacturer or a machine shop, and suppose, too, you could buy some of that capacity without having to set up any production facilities of your own. You supply the idea, buy expertise and capacity, then sell your product all over the world. Virtual production.
This, too, is already being done by a few companies who figured out how to do it on their own and negotiated with companies on an as needed basis, but when the CEO of a major company starts promoting the idea, not only will more people hear about it and want to do it but more companies might find a way to offer their capacity to those who need it.
In the United States and elsewhere, manufacturing jobs are heading overseas, factories large and small can no longer compete selling the one thing they sell, but if they can re-purpose some of their machines and rent out the capacity along with their skilled operators, maybe you can build that motorcycle and your neighbor can build that car and the guy down the street can start a furniture company, kinda makes you think doesn’t it? Rent every piece you need from initial design and engineering to manufacturing to warehousing to shipping, … a virtual company manufacturing and selling physical products.
This concept has legs and I bet more than a few of our readers are already thinking of the possibilities from both sides. I like it.
Link: Amazon’s new direction via Instapundit
chris says
GENIUS.
terry says
Seems like a prvocative Text, but where is the primary ingrediente => Ca$h, and the word “rent” euphemistically seems to actually mean convincing all involved to share the Ri$k, but take the Reward as a low-bidder sub-sub-contractor that gets paid when a retail sale occurs. How to get around that mountain, mr.mohammed?
kneeslider says
Of course cash is involved, you’re buying or renting time and skills, those selling the time and/or skills get something in return, cash. But the cash you put up in this case is far less than if you need to set up a shop or factory or warehouse and hire people to do the work.
As far as risk, the risk is primarily on the part of the person starting the business, as it should be. If you pay someone to do some part of the necessary work but your overall business fails, you’re out the money but they were still paid for their work. It’s like the old vanity publishers who were paid to print your books. They got paid, you got the books but if you didn’t sell them, you were stuck with a garage full of books and no money.
Amazon currently will do warehousing and fulfillment so you can sell your products. They charge you while the products sit and a fee for the sale. They make money whether your business succeeds or fails. It’s up to you to make it work. They don’t wait for you to make the sale, you pay, they do the work. No pay, no work. So I guess I’m not sure what your “mountain” is that needs to be surmounted.
terry says
Dear KneeSlider = I am following with you on this, for sure….. The novel/poetry analogy is so apt! Having explored the SBA-Loan, strAngle-Investor and Vulture-Capital avenues … [edited] …
todd says
I know it’s different merchandise but take a look at the successes of CafePress.com. You can upload your designs and hope people buy them printed on T-shirts, messenger bags, and ladies panties. Mean while, CafePress is sending you a monthly check…
-todd
coho says
Terry,
Your wordplay is entertaining, but I don’t understand why you seem so dead set on shooting this idea down right off the bat. Lots of people said Amazon itself would never fly, now Bezos is a billionaire and Amazon just started selling Lincolns in addition to geegaws (much to the chagrin of Lincoln dealers everywhere).
Viveik says
We already run a virtual motorcycle company wherein we outsource our designs to chinese subcontractors and manufacturers. Sure there is upfront design fees involved, however with some due diligience and sell-before-build, we spend fractions of what it would take to setup a full fledged factory in China or elsewhere. There are issues where subcontrators become your competitiors, but we just need to innovate faster and stay ahead of the curve..