Market Update

Tulipia Bridal wishes you a Happy New Year and the best in all of your endeavors in 2009. We wish you a new and refreshing business season, with profits and growth in your personal and professional lives.

2009 has kicked of fairly well. The stock markets are improving, and although the economy is still reacting to the recession, the future still looks bright. It is easy to remain pessimistic when nationally the retail industry sales are down, but it is easier to look on the bright side when we look the wedding industry.

The Metro News from Ottawa, Canada, states that the brides are not looking to cut back, while some vendors in the wedding industry are looking forward to a very profitable year. The Providence Journal, of Rhode Island, also reports further wedding industry growth in the region. While both articles agree that the effects of the economic decline on the brides does not restrict their spending limits and that the business is looking to increase, the brides are working under a strict budget and are looking to get the best deal with the most value. Richard Markel of Association for Wedding Professionals International looks to add, “While the brides still look for bargains, as they did before, they will still buy based on their criteria.”

Thus, we continue to confirm that the wedding industry is looking to turn around the economic down sets of 2008 and looks to greater growth in 2009. The business is still the same, capturing the bride’s attention, fitting her criteria. We must work smarter, add more value and be more creative.

Your Business

Every New Year we make resolutions to improve our lives somehow in the next year. The gyms notice an increasing growth of attendees in the first few months, salads begin to outsell burgers, and people begin to set goals and plans for themselves. While few stay true and committed to their established resolutions, even fewer people make resolutions for their businesses.

Facing slow business, both due to economic recession and seasonality of the wedding industry, we need to look over our business and slim down our extra pounds. This is the perfect time to take some time to re-evaluate your business. The following is a simple, yet effective way to lose the extra weight in your business and get back in shape as the industry turns around.

1. Look over your business plan – If you don’t have one, make one. If you have the time, you can get technical and make an extensive plan. Doing so, you will learn a lot about your business, your industry, and your competition through research. But if  you do not have the time, don’t sweat it. Simply look at your product(s) and analyze your strengths (look at “Being Unique in a Copycat World!” article). Understand who you are and what you do best.

A simple way to do this is by using this statement:

Tulipia Bridal’s looks like this

Simple, yet very clear. This should be the direction where you want to go. Remember, you cannot be everything to everyone. Just think of an average diner. Lots of options, but all subpar.

2. Return to basics ¬– After you analyze who you are, and who you strive to be, stick to that. If your core strengths are customer service, then return to focus on that. Very often when things get busy, or we are worried by micromanaging our businesses, we forget what is really important. Find the passion and the reason why you are in the business once again, and focus on what you are the best in the world at.

3. Cut the Extra Weight – The longer you are in business the more things we add on to our processes. However, sometimes the way things are done isn’t the healthiest for your business. You don’t say, “I eat a bag of chips before dinner everyday, because that’s the way things are done.” While it might be the way things are done, they will not help you with your New Year’s resolution of losing weight, for example. So if giving your customers 10% off on every sale is the way things are done, then maybe you should change the habit (see “Killer Discounts” article). Maybe that very attractive, but useless and expensive letterhead you use isn’t the best investment you can make.

Another great way to cut expenses is to analyze your process, from purchasing to final sale. Maybe you can decrease your purchasing expenses, handling costs, storage, or reduce your expenses in final sales. Be careful to only reduce costs in non-value adding expenses. If you provide a great wedding dress storage bag, and brides absolutely rave about it, then keep doing that, but if it doesn’t really matter to them, don’t wait until someone says something. No one complains about a freebie if it doesn’t harm them.

Tulipia and You

Once again, Tulipia Bridal is a great place for you to start slimming down and looking great in 2009. After you’ve looked over your business plan and are truly looking to have a unique and exclusive collection of bridal gowns, then our collections speak for themselves. As you are looking to improve your core business, Tulipia Bridal is there to enhance both your company and your bottom line.
As you begin to return to the basics, whether it is providing great customer service or unbeatable selections, Tulipia Bridal becomes a part of your value chain. We work individually on every order, helping you do what you do best, while fulfilling your customers dreams. Bringing our unique and exclusive wedding gowns, we do not add on any special charges, or extra problems. We try to become the most profitable and effective part of your value chain. There is no pork-barrel spending in the Tulipia Bridal Bailout Plan.

Wishing you a happy and leaner New Year.

Release 3 - New Years Resolution.pdf (2.15 mb)

Market News

BAILOUT!!! The U.S. President Elect Barak Obama is expected to provide additional $500 billion economic package, through job creations, tax cuts and another stimulus plan, as reported by the Associated Press. While many talk about this issue, very few actually explain what this will do to the Small Businesses.

Regardless of whether or not we agree with these actions, their effects on taxpayers and the future of our economy, this will be good for our business short term. The extra $300 to $600 each person received between June and September of this year, led to a small boost before the large downfall of the stock market. As similar stimulus plans are in the near future, consumers will receive a lot of money to boost the economy. Thus, our brides will have some more cash, and as we saw from Tulipia’s previous article, they are not looking to cut their budget on one of the most important days of their lives. So now that we are not panicking, the question is how do you catch the bride’s attention?

Your Business

Looking at many bridal sites and stores, what we often notice is one thing in particular… resemblance. Everyone promises to be the best, everyone promises to be the cheapest and everyone promises extraordinary customer service. Well, if we are all the same, how do we attract the bride?

As promised, we will talk about marketing in this issue. The real question is how do you differentiate yourself and play to your advantages?

The first thing we must understand is: What are our strengths? Consider the following aspects (The 4 Ps of Marketing):

 Is it your product? Are you offering a product that is unique and creative? Or is it one of the few traditional and classic gowns that are out there?

Is it your placement? Are you the only distributor in a certain area? Do you have connections in retail chains that no one else has?

Is it your price? Are your expenses so low that you can offer the best prices on the market? Is your service so good that people will pay more for you?

Is it your promotion?  Have you built your brand name, or store name, to the point that when people hear it they think reliability or exceptional service?

Next step is to decide what you would like to be known for. What your goals and aspirations? For example, at Tulipia Bridal, our goals are to build a brand.

Now that you evaluated your strengths and have a goal, you must build upon your strengths to reach your goal(s). When you know where you are heading, it will be very easy to establish who you are looking to target. Why spend money to reach the price sensitive customers, if your wedding dresses are expensive? Why reach out to modern and artistic brides, if your wedding dresses are classic?

As you begin to understand your value offering, you are now able to separate yourself from mass competition, and are more focused and effective in attracting your ideal customer.

One thing we do want to point out, be careful of separating yourself by price.

Remember this: There will always be someone who will be willing to make less profit then you.

Tulipia and You

Now here is where Tulipia comes into the picture. Tulipia gives you the edge to be who you would like to be. We offer unique and exclusive wedding gowns, with styles inspired by European designers, using European fabrics, manufactured by high quality European craftsmen. We realize that the U.S. often follows fashions from Europe, and the wedding industry is not far behind. Tulipia allow brides to be unique trendsetters on their special day. Tulipia’s strategic distribution allows for exclusive partnerships within numerous areas and locations. Our suggested retail prices not only give a great value to the customer, but also provide a great gross margin for the retailers. And last but not least, while Tulipia’s brand name is young, there is none like it.

Understanding who we are lets us know who to target, which business decisions are right for us, and where we are going. So now try to understand who you are, and play to your strengths. Tulipia is there to help.

Release 2 - Value Prop.pdf (1.52 mb)

“Killer Discounts!!!”

By: Alex Andreyev

Market

The politicians are arguing, the stock market is falling, and all chaos is breaking loose on all industries. If the big boys of Wall Street need a bailout, where does that leave us, the small business owners? As Sarah Palin mentioned (or maybe it was Tina Fey), If we are going to bail out Freddy and Fanny, when is someone going to bail out me, Joe the Plumber?

Well, regardless of who took the oval office and what will happen in the stock market, the wedding industry is in good shape. After conducting a survey, Knot.com, a world-leading destination for brides, reports that while 76% of brides are concerned with the poor economy, only 17% are definitely cutting back on their budget. Even those brides who are reducing their budget, will decrease honeymoon and entertainment spending first. The wedding industry is not completely recession proof, but it is still a thriving industry.

While the industry is vibrant, it is still as competitive as ever. In order to stay profitable, a few steps need to be taken. We must minimize our expenses, market efficiently, and promote more sales (expenses and marketing will be addressed in the following releases). Very often, in order to generate higher revenue, companies give outrageous discounts. While giving a discount might be a good way to increase sales, the outcome on our profit could be detrimental.

For example:

You sell about 10 Tulipia Bridal gowns per month, which generates $12,000 in sales. Your cost of goods/dresses sold (COGS) is 50% of your sales. Your fixed expenses (rent, insurance, etc.) are $1500 per month. Your variable expenses (salespeople, packaging, shipment), also know as Sales, General and Administrative expenses (SG&A), are about 20% of your sales. Now let's see how this all works financially.

Here you have your profit of $2,100 per month, or in other words, out of every dollar you earn you keep 17 ½ cents.

You are happy, but now your mortgage payments went up, cost of food is up and you want to go on vacation soon. So you decide to give a 10% discount. At the end of the month things look great, your sales are up 20%. Wonderful, but for some reason you still don’t have enough for your vacation. Here is why:

Here is why:   

So here you see that while your sales increased by $2,400, your profits fell by $720. Beyond this loss, you now work harder, sell more, but keep less then 10 cents on each sale.

Don’t let your vacation plans fade just yet. Tulipia Bridal gowns are all priced in order for you to make and protect your gross margins. As you can see when you give discounts, you are giving up margin, which is essential for protecting your business. We price all of our gowns in order for our retailers to receive at least 50% on wedding gowns, and 40% on evening gowns. Rather then giving away discounts, you can simply invest the same $1,440 in your marketing initiatives.
While investment in your marketing of $1,440 would still leave you with only $1,380 in profits, this investment should generate future increase in sales, while continual discounts will decrease your margins and profits with no additional benefit to your overall brand name. So keep it up, the best time to take a vacation is when very few people can, the beaches are less crowded that way.

Release 1 - Margins.pdf (1.49 mb)