How to Launch a Business Instantly
From Warren Buffett’s Stunning Video Testimonial
I have to tell you I now have nine suits all made in China; I threw away the rest of my suits. Our directors, my partner Charlie Munger, Walter Scott, Ron Olson and even Bill Gates now, are wearing suits made by Dayang Trands. And they know and love Madam Li for what she’s accomplished. As a matter of fact I think maybe Bill Gates and I should start a men’s clothing store and sell the suits made by Madam Li. I think we would be great salesmen, because we love them so much. The suits we’ve received that have been made in China we’ve never had to alter a quarter of an inch. They fit perfectly. We get compliments on them. It’s been a long time since I got compliments on how I looked. But since I’m wearing Madam Li’s suits I get compliments all the time. So maybe Bill and I can start a clothing store. And if we sold the suits made by Dayang Trands someday we might even be rich, who knows.
Warren Buffett's testimonial on the 30th anniversary of Madam Li Guilian’s company was released over The Wall Street Journal’s digital network on Sept. 10 as a YouTube-type video. Dalian Dayang Trands Co. stock jumped 70%.
Because I work at home, I haven't bought a new suit in five years. After that endorsement, I lusted after a Trands suit.
No dice. They're available only at the 20 Trands stores in China—mostly in secondary cities, the brand wasn't even widely known in China—or by mail to the very rich who know the owner, Madam Li, and have access to a great fitter.
What we're looking at is not only the greatest testimonial in the history of the world, but also a marketing opportunity that gives me the tingles.
The Importance of Testimonials
The generally recognized sequence of events in marketing is:
- Find a suspect.
- Make the suspect a prospect.
- Turn that prospect into a customer or donor.
- Convert into a renewer, multibuyer, regular customer or donor.
- Nirvana is when that person becomes an advocate who likes your product or service so much that you get a testimonial and referrals.
Cashing In on a Testimonial
In a prior edition of this e-zine was the following takeaway:
If your product or service is mentioned, shown or described in a positive light anywhere, is your PR person able to exploit it quickly—while the news is fresh in the public’s mind?
In the case of Trands suits, a campaign to hype the Buffett testimonial in the U.S. would represent a colossal waste of time and money, since the product isn't available. It’s the equivalent of sending an author on tour before the book is published.
But it would be possible to cash in big on this Buffett windfall by starting a North American business ASAP.
Here are the steps involved:
1. Research whether orders—a lot of them—can be fulfilled. If you can’t fill orders, you don’t have a business. However, Dayang has 15,000 employees and produces 10 million garments a year. Setting up a mail order export division quickly would be a slam dunk.
2. Get permission to quote Buffett's testimonial. The essential element needed to make this new business work.
3. Cut a deal with Madam Li. Get the damned lawyers involved and you’ll wind up with a 250-page contract that takes eight months to get signed. I'd go with a couple pages that said:
- Dayang Trands China gives Dayang Trands U.S. exclusive rights to sell Trands custom tailored suits in North America at retail prices (plus shipping) mutually agreeable to both parties.
- Dayang Trands China will fulfill orders promptly and ship directly to Dayang Trands U.S. customers.
- Dayang Trands China will supply sales kits that include photos of merchandise and generous-sized swatches of material.
- Dayang Trands U.S. will assume all costs of North American travel, advertising and promotion.
- Page 2 would be some legal-eagle stuff about warranties, covenants and exit strategies.
I may be naïve, but in this litigious, nasty, money-grubbing world, competent ladies and gentlemen can still do business together successfully.
4. A chain of dedicated men’s stores? Warren Buffett’s lighthearted idea of partnering with Bill Gates to open a Trands suits store (which would presumably expand into a chain of stores) is nuts. This wouldn't only require huge investments in commercial real estate and inventory, but also take months before the first sale could be made.
“A good plan violently executed now,” said Gen. George S. Patton Jr. “is better than a perfect plan executed next week.”
Three elements go into the custom tailored men’s suit business:
I envision the business model as a three-legged stool:
- Leg #1: Traveling salesmen/fitters
Over the years, I've seen full-page newspaper ads announcing great deals on custom tailored menswear from Hong Kong or mainland China. A traveling suit salesman would hit town and set up shop in a hotel suite. I could make an appointment to show up for a fitting and choose suit styles and material. The measurements would be e-mailed to China and the suits shipped directly to me. Meanwhile, after a couple days, the salesman/fitter moves on to the next town.
Back when I was a working stiff, these offers for suits, sports jackets and shirts appealed to me. I have a dreadful body with a spare tire around its middle, fat neck, and short arms and legs, each of different lengths. The prices were good, and I assumed the guy would be a good fitter.
What’s more, I'd only have to show up once. Assuming my weight was the same, whenever I needed a new suit I'd e-mail an order, have it delivered, and presumably the salesman would get a commission.
It's a neat business model. Unlike men’s clothing stores, which have capital tied up in racks of unsold garments, each item is bespoke.
My hang-up: I never trusted these guys. I never heard of them, and I was afraid I'd pay dearly for great suit material, only to discover these were be bait-and-switch con artists who sent great-looking suits of cheap material that'd look junky and rumpled after three cleanings. Yes, I could complain, but the tailor was in Canton, China, and fitter plying his sleazy trade to suckers in some hotel 700 miles away.
Warren Buffet’s testimonial on the quality of Trands suits is truly powerful, so the chance of cheapsy-weepsy material being substituted is off the table.
To get the business out of the chute immediately, this traveling salesman/fitter option would be the first step—finding world-class fitters, giving them territories, and heralding their arrival in towns with local newspaper and Internet ads.
The ads would hype two unique selling propositions: (1) Warren Buffett’s incredible testimonial with a URL where the prospect can actually see it, and (2) the promise that Trands custom fitted suits are now available in [NAME OF TOWN], so that, “You, too, can dress like a $37 billion man!”
If everything fell into place, the business could be up and running in three or four weeks. Maybe less.
- Leg #2: Home sold
My wife, Peggy, is president and publishing director of the Target Marketing Group with six magazines and a slew of ancillary products (including this one) under her aegis. She always looks like a million bucks. In addition, she's horrendously busy and doesn't have a lot of time to shop. How does she do it?
Peggy’s secret: The Worth Collection—a national marketer of stylish women’s wear at relatively moderate prices. Three or four times a year Suzy, a Worth sales associate, calls to alert Peggy of the new Worth line or a special something she thinks would look terrific. Suzy knows Peggy’s size, so whatever is ordered fits. The two women decide on a mutually convenient time, and Peggy wanders over to Suzy’s house just three blocks from where we live in Center City Philly.
The benefit to Peggy: The experience is pleasant and convenient, the clothing affordable, and frequently the items arrive at our front door via UPS the next day. As one of Suzy’s clients—a high-powered Philadelphia attorney—told me:
When I go there, Suzy has an outfit picked out that she knows I will like. She says, for example, “This jacket will go well with the slacks you bought last year and the gray skirt you bought two years ago." Suzy doesn’t sell you clothes; she helps you build a wardrobe.
The benefit to Worth: an efficient distribution system that obviates the need to invest in slews of SKUs in myriad sizes for the shelves of retail stores, which would have to eat big losses on unsold garments.
With the Dayang Trands line, I'd duplicate the Worth business model, giving world-class fitters exclusive territories and the opportunity to work out of their homes. They'd be supported with generous promotion and advertising.
Once a city had a full complement of home-based fitters, the traveling sales rep would be reassigned to the 'burbs and smaller towns. Ultimately, these travelers might become the regional sales managers, recruiters and trainers.
I might test Worth’s concept of having inventory at a central site for immediate delivery (instant gratification) vs. having everything made to order and shipped from China.
- Leg #3: Retail (maybe)
The premier menswear stores in the Philly area are Boyds, Macy’s (formerly Wanamaker’s), Saks Fifth Avenue and Lord & Taylor. Arrangements could probably be made for these merchants to carry the Trands line. However, in my opinion, the Buffett testimonial is so overpowering that it might wreck the sales of all other lines of suits. My bet is that traditional retailers wouldn't touch Trands with a pair of tongs.
5. The linchpin of the business model. It's imperative that the fitters be world-class. Offers for JoS. A. Bank's great deals (first suit $199, second suit just $99) are all over Philadelphia TV these days. The unctuous voice of the announcer is like fingernails on a blackboard; he gives me the crawlies and results in my instantly hitting the mute. Why? Because JoS. A. Bank in Philly once shoehorned me into a pair of gray slacks that the salesman said would be perfect once altered. The waist was let out, but the pants crimped my crotch and squeezed my butt. I chucked them out and vowed never to return.
The key element in building an instant U.S. business for Trands would be finding the very best people.
“A’s hire A’s,” said Donald Rumsfeld. “B’s hire C’s.”
If hiring takes time, so be it. The future of the business hinges on it.
In the words of National Business Furniture Founder George Mosher, “Agonize over one thing only: hiring.”