Have You Heard of the Red Ocean and Blue Ocean Strategy?

 

Red ocean Blue Ocean Strategy

 

This theory argues that the business world consists of TWO distinct spaces, described as the metaphor of red and blue oceans.

The red ocean represents all known industries competing today in what is the “known market space” with red ocean companies take the conventional approach of beating their competition by competing on price and stealing competition from one another.

What does this have to do with cabinets you may ask? Well, think about it this way. If you are a small and solo cabinet maker, your main competitors are those that provide similar- if not the same services as you. Although you may have 10+ years’ experience behind you in the industry, if your target customers are those that AREN’T interested in basic Bunnings or IKEA flat packs AND you don’t have any means to manufacture custom cabinetry, there is only a small pool of potential customers that are interested in your service. These customers will also shop around for the lowest price – after all, in their eyes, you are only putting together some flat pack cabinets for them.

How many cabinet makers can you count on your hand that are in the same boat as you? How can you stand out from your competition or even try to compete with the bigger fish in the industry that can offer clients a designer, fully equipped factory with all the latest machinery and custom cabinetry that is designed to fit their home and lifestyle?

If we are being honest, the service you provide is quite basic – you unpack the flat pack furniture and assemble it for your client. Your selling point may be that you will beat any cabinet maker by 5%. Sure, you may grab a few more customers here and there but it is not a sustainable business for you OR your competitors.

Absolutely no one wins if businesses compete on price. You can get lower and lower until you outbid your competition, but in the end, you also lose. How? You are doing work that is worth more than what you are paid. The only winners in this situation are the customers who just scored a new kitchen or new cabinetry at a fraction of the cost. So how do you separate yourself from your competition as a small cabinet maker with no means of being able to manufacture custom cabinetry and install at a price point that both you and your customer will be satisfied with? That is what the blue ocean is.

The blue ocean represents the unknown market space – the businesses that are not in existence today. Blue ocean companies do not use competition as a benchmark, rather they use innovation. The blue ocean challenges businesses to seek out uncontested markets and avoid crowded markets. Competition is intensifying, and with supply exceeding demand in most industries, it is imperative to stand out in a saturated market. But to do this, you will have to do something no one has ever done before.

So, how does this tie in with cabinet makers and the cabinet making industry?

Think about it, if you are able to provide a UNIQUE selling point for your services (a competitive advantage over your competition), not only would you be able to charge more but you will also stand out from the crowd.

So what’s stopping you? It’s likely you already know you need to do or offer something that no one else does, but you might not have figured what you should do to do that.

Luckily, if you’re reading this post, I am going to tell you what to do and how to do it. If you implement this strategy, you will be several years ahead of your current competition and may possibly become one of the dominant players in this new and untouched market space.

So what is the answer? OneCab.

You’re probably thinking, “um what?? What does that even mean???”

Well, let me explain to you what OneCab is. OneCab is our free online ordering system that allows cabinet makers and trade professionals with ABNs to quote and order custom cabinets in REAL-TIME. We are your local manufacturer for cut-to-size here in Perth, as we believe that everyone should have access to large scale manufacturing at an affordable rate with real value for money.

 

So, what is the difference between our system and the subcontracted cabinet maker you use?

  1. Faster turnaround times for your clients- we strive for 5-7 working days for flat pack furniture and 7-10 working days for assembled cabinetry.
  2. You don’t need to wait for your subcontracted cabinet maker to get back to you on an estimated quote. OneCab gives you real-time instant quoting so you can be confident in quoting your client for the job. With a subcontracted cabinet maker, this could take up to a week depending on how busy they are and with your client shopping around, you might miss the window to get back to them on time. You are literally putting the status of the job in their hands.
  3. You can literally customise every aspect of the cabinetry- the finishes, components, dimensions and more! This gives you and you client more options to select from. See the screenshots taken below from the ordering system

Onecab screenshot

What are start-up business benefits?

  • This software is absolutely FREE (now and forever). That’s right, put that credit card away. You only pay once you submit your order to us.
  • You do not need to purchase ANY extra equipment (edge bander, CNC machine etc.) We have the latest machinery in our factory so why not take advantage of that and send your orders to us for guaranteed quality cuts?
  • You do not have to lease a warehouse to store your equipment and materials. Once your project has been cut, you can pick it up flat packed from our factory or check the box to have us deliver it to your job site assembled and ready for your install
  • You don’t need to hire a team! If you have the tools and the knowledge, you can do it yourself or turn it into a small family-owned operation
  • Our system automatically provides instant real-time quotes. If you add a new component or change the shade, you do not need to submit the new order through to
    us to get the updated pricing. The quote changes right before your very eyes so your project completion date will not be hindered in any way, shape or form
  • Perhaps you can only market your flat pack assembly skills as you don’t have any means to create custom cabinetry because it may be too expensive to buy the machinery for it, or to outsource just one project may be more costly than what your client is prepared to pay. OneCab literally takes the stress away from the manufacturing process so you can focus on the sales side. Whether you are

 

Okay, I’m convinced. What do I do with this information? How do I market myself?

The best part of OneCab, is that our prices are low. How and why you may ask? You will be doing the site measure, ordering the cabinetry on OneCab and installing it yourself. That’s the bulk of the work and how we are able to pass those savings to you. We are only the manufacturing side of your operations.

You can hop onto your business social media and instead of writing, “Flat pack assembly service with 10 years of cabinetry knowledge”, you can now add “We design and install custom cabinetry at an affordable price”. Check out the two ad examples. Which ad do you want to be posting?

 

OneCab red ocean blue ocean strategy

 

Another bonus? You can very well offer this service at a lower price than larger businesses who also offer custom cabinetry.

How? These organisations will have more overheads than a solo cabinet maker. They have to pay their employees (quotes team, sales team, designers, drafting team, cabinetry install team, those working on the production floor etc) a wage, while also factoring in electricity, the purchase of the machinery, depreciation, rent and everything in between.

What a headache huh?

In contrast, you may only have your ute, trailer, your tools and perhaps hire an apprentice to help you out. Your overheads are vastly lower than that of a larger company, so you can afford to reduce the cost of your cabinetry while maintaining the same quality as the bigger organisations. Not only will you be able to successfully compete against your current competitors, but you may very well be able to compete against bigger companies.

Some clients may prefer to work with the business owner as they will be doing the site measure, ordering the parts and installing it for them. With one only one contact person, it may be easier for them rather than passing this information to someone and have them pass it on again to someone else. On the flip side, some clients may have more confidence with working with a larger business as they know they will be looked after. This is totally a preference that changes from client to client.

So now that you have all this information, what are you waiting for? You can sign up here for free and have a play around with the features before making your first order. If you need help, don’t hesitate to contact us at 0423 058 203 or send through an email to sales@onecab.com.au and we will get back to you.

If you know someone who is a solo cabinet maker or thinking about breaking into this industry, show them this post. You may very well change their life.

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