A small startup company based in Vancouver that wasn’t satisfied with selling its product in retail stores, tried a different approach in their business by applying the direct business model. Peekaboo Beans was created by Traci Costa, who wanted to make children’s clothing more comfortable and convenient for parents. So, she started her business by supplying her clothes to small boutiques in Vancouver. After little success in doing so, Costa realized she could better grow her business using a direct business model which would bring her a higher return. In class, we recently discussed the topic of operations and direct business model. A big example we talked about that also uses this model is Dell. In ways similar to Dell, Costa replaced all of her retail stores with an army of consultants who would sell her product. In this way it was easy for Costa to grow her brand, rather than selling her product through clustered shelves. The number of direct sellers is up 17.8% over the past few years, while global direct sales have increased 20.8%. These numbers prove that a direct business model is indeed effective and are good for startups to expand their market.
References:
http://www.canadianbusiness.com/innovation/peekaboo-beans-direct-sales/
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