This Page

has been moved to new address

Why AccuQuilt Won't be Making Custom GO Dies Anytime Soon

Sorry for inconvenience...

Redirection provided by Blogger to WordPress Migration Service
LoveBug Studios Blog: Why AccuQuilt Won't be Making Custom GO Dies Anytime Soon

LoveBug Studios Blog

Happenings at the quilting studio!

Saturday, June 19, 2010

Why AccuQuilt Won't be Making Custom GO Dies Anytime Soon

First, a disclaimer: I don't work for AccuQuilt, I haven't talked to them about any of this, and for all I know what I'm about to say is pure-D speculation. If AccuQuilt announces custom dies for the GO in the next 6 months, I will stand corrected, apologize, and give up chocolate for a month. I'm not holding my breath though. Also, this is not an assault on AccuQuilt at all; I actually think that it's very prudent for them business-wise (at this time) not to offer custom GO dies, and as a prolific purchaser of custom Studio dies, I also prefer it this way. I'll explain all this in a minute or two if anyone is still reading by then. :)

What I'm about to put forth is based on my nearly 15 year career in the manufacturing world, and also calling upon my own experiences as a small producer of custom handbags. Because of this, I feel relatively qualified to opine on this topic & tell you of the challenges they are probably facing in bringing this service to the masses. Also, I was planning to write some of this in a Facebook post, but soon realized I looked like a maniac posting a 2,000 word diatribe on the topic.

So if you are interested, here's why (I think) you're wasting your time waiting for AccuQuilt to offer custom GO dies. If you want custom dies & that's important to you, buy a Studio die cutter. You'll be much more satisfied than if you complain later about not having the option when you buy your GO.

Now, on with the rant.

Custom anything is EXPENSIVE. If it isn't, said manufacturer will soon find himself out of business. There are a multitude of reasons for this which I won't detail, but suffice it to say that buying single lots of anything is going to be more expensive than buying multiples. If you can't anticipate some things, your costs will be prohibitively high. So for example: I standardize on a particular zipper length & style for a particular bag. Even if someone custom orders a bag from me, they will get the same zipper as I use for the ready-made bags. This allows me to keep my costs in-check doing custom work because I can get a zipper for a quarter ($0.25) instead of buying one zipper for $2.50. (Similarly, in AQ's case... when you custom order a Studio die, it's going to go on one of their standard size die boards. They don't custom-cut your board to fit the die you designed.)

The Studio & GO are DIFFERENT MACHINES. Some of this has to do with how & where they are made. Studio machines & dies are made in the USA. The GO machine & dies are manufactured overseas. [[Note that some Studio dies are also made overseas; these are most likely the ones that are more cost-effective to produce overseas because they are relatively simple to produce, or are super popular, or can free up the USA shop to do other things. For example, the 2.5" strip cutter is largely produced overseas because 99.9% of Studio buyers are going to (eventually) buy it.]]

GO dies are plastic; that makes them lighter and easier to produce & ship. Overseas manufacturing plants are already tooled to produce plastic everything. (Not to mention labor costs which are very high here in the USA compared with other low-cost countries.) This makes the GO a more attractive option to produce offshore, and gets the price point down to where more people can afford to buy one. (i.e. - more sales for AccuQuilt.)

Shipping overseas is EXPENSIVE. Do you know how much it costs to ship a container from overseas to here? Well, I don't either, but I know it is a lot. So you don't want to ship half-empty containers. That means AQ is going to order LOTS and LOTS of dies to fill one.

Short-run manufacturing is COUNTERPRODUCTIVE. Since the only place set up to produce GO dies is overseas, that would be the obvious choice to manufacture custom dies. However, to optimize the manufacturing run, you don't want to change up the production line as often. It doesn't make sense to spend 4 hours changing over a machine that's only going to run for 1 hour. If you spend 4 hours doing a changeover, it's better to let the machine run as long as possible with those settings - hundreds of hours if you can! Bottom line, AQ isn't going to manufacture a die for the GO that only one or two people want. They need to have reasonable assurances that the dies they produce are going to be popular & sell - so they don't get stuck with 4,000 7.375" squares nobody wants.

The shop would need to be OVERHAULED. Now, considering that today, the Nebraska shop is tooled to produce wood-based dies & the overseas plants are tooled for plastic, it's an expensive proposition for AQ to re-tool their shop to now accommodate plastic GO dies that have nothing in common with the Studio dies, or even to produce a facsimile of a GO die in their current shop. Everything would have to be re-calibrated; none of the raw materials are common, which means having two separate sets of inventory. How much is that new equipment? How much space will those machines take up? Do they need a new building? How long will it take to train technicians on the new equipment? How much material will they waste in the beginning trying to produce that one, perfect, custom GO die?

AQ's technicians, machinists, draftspeople, etc. all know how to make Studio dies, so it's a short leap to doing a custom one. Same equipment, same inventory, same building, same process, same people. There's not much that they have to build into their price in order to recoup their costs for custom Studio work.

Custom GO dies would be COSTLY for the CONSUMER. Under the current model they would, at least. Either they pay for it by running shorter production cycles overseas, or they make the investment in their current USA shop to retool & retrain. Either way, the additional costs make it prohibitively expensive to produce custom GO dies unless they can charge more for them.

As much as people complain about the cost of the GO and the dies now, I doubt that any GO owner would be willing to pay more (much, much more) for a custom die than they paid for their die cutter. Most people buy the GO because it's more affordable than the Studio and seems to be less of a commitment. It's like the cool, new little tool in my life & the barrier to entry is lower. I don't know too many people who would choose to buy the GO if they could afford the Studio instead. [I know people do it... I just don't know them. If you would & can - please speak up!]

Releasing dies more often is COUNTERINTUITIVE. This is a little off topic, but bears mentioning. If custom dies aren't available, some people suggest that AQ release dies at a faster pace. They complain about why the Studio has so many dies while the GO has relatively few.

First... the Studio has been around a LOT longer, and while the AccuQuilt brand is relatively new, the original company knew how to make steel-rule dies for many, many years before then. AccuQuilt is built upon an already-successful & viable business model with a proven track record. It was a short leap from cutting paper to cutting fabric, so ramping up to that was pretty fast. The GO is uncharted territory (in the sense that it's mass-market instead of a specialty product), so I think it's perfectly logical, prudent, and reasonable to start with a limited number of offerings until you know people are going to buy it. If GO started out with the machine + 350 dies... how many people would buy that many? If you limit the selection, you increase the chances that people will just buy what you have. McDonald's sold billions of burgers before they introduced chicken & salads. Even still... the burgers outpace the salads by a LOT.

Next, if you, as a business, already know that your customers are price-sensitive, you're not going to do anything to jeopardize your ability to make money. The GO is for people looking for something "affordable." People save money to buy a GO, they save up to buy dies, so they can afford to indulge when a new die is released. But how many GO owners would buy 6 new dies every month? The excitement would wear thin, the cost would become too high, and cash flow for AQ would drop off.

As it is, AQ is releasing dies every 4-6 months; that seems to be a pretty good pace to insure people will order the new dies ASAP. In fact, people will pre-order them. Would you pre-order a die if you knew another was coming next month? Nope - you'd wait to see if the next one is something you like better. That "grass is greener" mentality will keep people on the sidelines, not buying. That would be very damaging to AQ's cash flow, because they would have already spent the money bringing new dies, and they will need an influx of cash if they want to produce still-newer dies.

Instead, AQ takes an approach that makes people anticipate, look forward to, covet, and desire new dies. When they are released, people worry if they are able to get them if they wait to order, so they line up in droves to buy them ASAP. It's brilliant in my opinion.

To me, the pace of die releases is in such a manner that people will probably have saved enough money (or think they have) to buy a few more dies. Any more than that, and AQ is sitting on slow moving inventory, which hurts their business... and ultimately hurts all of us as consumers.

Offering Custom GO dies may permanently damage their Studio business. If all of a sudden custom GO dies are available, they will have removed a significant competitive advantage that the Studio has over the GO. I'm one of those people who did an apples-to-apples comparison of both, and for me, the custom dies sealed the deal. Even if you never take advantage of it, having the option give the Studio caché. The GO is smaller, portable, the dies are cheaper, you can get the supplies you need practically anywhere... PLUS custom dies? Oh, honey, who wouldn't want that?

It's the ECONOMY, STUPID. And I'm not calling anyone stupid, by the way, it's just an expression. With a 10% unemployment rate in the USA and people losing jobs every day still, money becomes more critical for necessities rather than indulgences. Even people who have discretionary income to spend because they think they are better able to afford things begin to question whether they should spend rather than save. I'd raise my eyebrow pretty high at Steve Nabity (AQ CEO) if he suddenly announced making a significant investment in capital & equipment for a product that is almost assuredly on the chopping block in the budgets of a good chunk of their consumers.

Bottom line... I think AQ is doing a great job expanding their business in a fiscally-responsible manner, giving just enough teasers and hints & previews to make people want the next thing they are offering, plus protecting a very core part of their business in the process.

Will they ever offer custom GO dies? Maybe. Under the right circumstances and economic factors, maybe. Will it happen anytime soon? Not in my opinion, unless they can quickly resolve the short-run production costs and really analyze their business model to see if it's worth the risk to make the investment. I'm not holding my breath!

My recommendation - instead of wasting time asking for custom GO dies (the decision by which will most assuredly NOT be made via a Facebook popularity contest) - ask for new dies that everyone can enjoy. We know that AQ is listening to & queuing those requests, so if you see someone asking for a particular die, and you want that too, SPEAK UP!


Happy quilting!

Labels: ,