Vacuum Cleaners Discussions

A few days ago I spoke with Tom Gasko, who was, and I do emphasize the past tense, a huge supporter of Dyson. The unit he sold and promoted was the now defunct DC07. Everything produced by Dyson since has been of inferior quality. The DC14 reduced the size of the bin because comsumers thought the DC07 looked too bulky. The hose handle was changed because consumers thought it was too much trouble to invert the wand. Hype and hyperbole have been the tools of Dyson marketing since before their incursion into North America. Does anyone remember the original Fantom? Dual cyclone, Dyson invention. Dyson forgot the K.I.S.S. principle. The first 400,000 or so units with their B&D motors were great vacuums. The only reason the ones still running have to go to the junkheap is because parts are no longer available. If Dyson had put his dual cyclone with the improved shroud on top of the Fantom brush roll/head with a v-belt and a full-diameter wand inside a hose large enough to store it, it would have been the perfect bagless vacuum! More cyclones mean more convoluted dirt paths. A powerful enough motor would have boosted the performance of the dual cyclone sufficiently to have made a washable permanent hepa filter feasible.

Dyson was stupid. If he had played his cards right, he could have utterly, totally, completely destroyed the world vacuum cleaner market. But he is in love with his prowess as an engineer, and believes himself above the laws of marketing. Here's what he should have done, and screw astm and all the rest.

1) Create a retrofit single cyclone bagless conversion kit for all uprights. Start marketing on infomercials, and QVC. Do the vacuum demo trick with the consumers own vacuum, clean with a bag, and clean with the conversion kit. See, you don't need a new vacuum at all, you just need our kit to make your old vacuum better than any new vacuum you can buy!

2) Get the vac shops involved. Stay out of the big box retailers! The sales of new vacs and vac bags are hurting, and the sales of old vacs are more profitable than ever. People are buying the conversion kits and keeping their old vacuums. It's obviosly a defensible patent. Don't sell or lease it. The minor players start dropping like flies. Let them. Keep it up until the big players are bleeding. Vacuums are a minor product for big box retailers now, so they buy fewer of them. No one is going to notice or care, it's just vacuums, right?

3) Create the wand mounted dirt cup for canisters, create the new and improved version of the upright cup, hard plastic with push button bottom empty. Keep selling on QVC. Get cleaning professionals and allergists on the bandwagon. Save money! Make your old vacuum better than new!

4) Introduce small canisters, hand vacs and stick vacs with the cyclonic technology, to be continued

Independent vacuum stores who are both sales and service of all brands are for the most part much more recession proof than the big box retail stores.  This bodes ominously for new dyson sales because James's business plan was always for big box store sales venues.  He solidified this sales base over the last 6 plus years in the US during good economic times.  It was two-thirds of the dyson vacuum market.

Now that these retailers are cutting staff and downsizing expenses they are abandoning high priced luxury goods [like $500 plus vacuums].  It's too late now for James to play nice nice with the small vacuum store owners and operators [THE BACK BONE OF THE VACUUM INDUSTRY IN THE USA].  They won't have any of it.  Too late.  They will stick with the value vacuum brands that stuck with them like MIELE, SEBO, BOSCH, RICCAR/SIMPLICITY, LINDHAUS and quality rebuilts like Electrolux, KIRBY, RAINBOWS, etc.  New dyson sales for all intents and purposes are dead in the water with vacuum stores.  Dyson repairs, rebuilts, and parts are and will be the mainstay among the industry professionals who own and operate the vacuum stores in the USA.  A new dyson sale once in a blue moon will be made only as an accomodation IF a loyal customer wants to buy new dyson and not a rebuilt.

Carmine D.

CarmineD wrote: Carmen,

 I stand corrected... the latest published sales where $1.22 billion year ending of 2007.- Or the 15-year-old Dyson LTD only performs to the tune of $1.22 billion in the year of 2007.

Your greater point is or seems to be....  Dyson sales figures are an indicator and demonstrates consumers are abandoning Dyson technologies.  Am I correct?  If so, what are Dyson technologies being abandoned for?...  more [knocked offed] Dyson technologies?


DIB

Thank you, DIB.  I believe you but ............I also believe as President Reagan said: Trust but verify!  I'm guessing [perhaps wrongly] that you may be quoting the article in Forbes Richest People in the World edition, March 2008.  According to that Forbes/dyson article, James's NET WORTH decreased from $2 BILLION in 2006 to $1.6 BILLION in 2007.   This is logically consistent with the link you posted on dyson 2007 financial results [please see my posted comments above]. 

But rather than having me and others guess at the truth, tis better to post the reference/link which is your source for dyson's sales of $1.22 BN in 2007.  Please.  This way you remove alls' doubt.  I conclude that $1.22 BN [like the $1.5B you bantered for dyson sales in 2007] is an untenable number.  Do you evidence to disprove? 

Carmine D.

Carmine,

The point I tried to make in both my posts (which would have been one, except I hit the wrong key) was that Dyson could have controlled the market if he had taken his time. Since no one has yet commented on both my posts taken as a whole, maybe I'm just a legend in my own mind... Of course no one would support Dyson NOW, but if you have read his story, about the Hoover Junior with the single cyclone. and his endless trips to one maker after another only to be disappoionted. What he did was RAISE THE CONCIOUSNESS OF THE POSSIBILITY OF BAGLESS DESIGN. Sure it had been done before, but no one was aware of it. He had in his hands the means to sell the consumer on their old vacuum, converted to the same single cyclone he had outfitted on his Hoover Jr. Can't you see the irony of the old, "Your vacuum missed this much dirt" trick employed to KEEP PEOPLE FROM BUYING A NEW VACUUM! Maybe I'm Don Juan tiliting at windmills, but I can see the vacuum makers dying off because everyone  liked their Dyson conversion, and everyone being led along until POW the new Dyson uprights are here, availalbe only at your local Dyson dealer. Eveyone else, Bye and fold.

All comments, and alternate conspiracy theories are welcome,

Trebor

Hi Trebor;

I agree with you in theory.  In practice, however, dyson always believed he would dominate the vacuum market in short order with huge sales volumes and the competition wouldn't be able to survive and gradually die off.  Giving dyson carte blanche.  It didn't happen in 6 plus years, for variety of reasons, and now likely will not ever happen.  If anything, dyson stands a good chance at being a buy out target for another bigger competitor in the industry in the not too distant future. 

Dyson net worth hit a peak at $2BN in 2006.  Dropped by 20 percent in 2007 to $1.6B.  Likely an even larger drop in 2008 and beyond. 

Carmine D.

Exactly Carmine!

Dyson's hubris led to his nemsis, which it always happens when someone thinks they know more than they do. I came to my conclusions just watching the dram unfold. I'm not saying I wanted that alternate series of events to have unfolded just that had Dyson played his cards right, they likely would have..

CarmineD wrote:
Carmine,

I've only been speaking of the Telegraph.co.uk article (posted above here).

The article states - “£611m in the year ending December 2007, a £100m increase on the previous year, according to latest accounts.”

In Dec, 2007 I used current pound to dollar exchange rates as I should....  £611m x $2 = $1.222b

FYI, it was Moose who originally found and linked the article and not I (as I thought).


DIB


http://research.stlouisfed.org/fred2/data/EXUSUK.txt

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/3469159/Dyson-hoovers-up-as-profits-jump.html

DysonInventsBig wrote:

Thanks DIB.  You use the exchange rate of dollars to pounds in effect on 12/01/07 to quantify dyson sales in dollars.  Is that appropriate for the entire year's operations?  It's not the exchange rate on 12/31/07 nor was it the exchange rate throughout 2007 when the sales occurred.  On January 19, 2009 the rate of exchange was one pound to $1.46.  Using "today" as the time reference, as you did in your post, and applying the applicable exchange rate in effect to dyson 2007 sales, then sales get restated as $892 MILLION. 

Based on the above, I disagree and object with using the exchange rate in effect on 12/01/07 as an accurate, correct and tenable sales number for 2007.  Why?  It overstates dyson sales due to an exchange rate anomaly.  I prefer and recommend as a source the March 24, 2008, Forbes magazine, which you like to quote here for James's net worth.  It states that the dyson company netted $64 MILLION [AFTER TAXES] on sales that rose to $1 BILLION in 2007.  [Page 99 if you have the magazine].  I suspect Forbes uses an exchange rate average for the year.  Possibly a rate variance factor which minimizes the skewing effect of exchange rate flunctuations.  Especially by using a one day rate exchange for a 12 month period.  Forbes may even use euros, the EU monetary standard, rather than pounds.  Certainly not the exchange rate in effect at year end which is meaningless.  Dyson did not dispute Forbes' numbers, quite the contrary, I suspect James agreed with the sales number.

Have to wait and see what dyson did for 2008 when Forbes comes out with its 2008 list. 

Carmine D.

CarmineD wrote:
Carmine,

In the month of 12/2007 the exchange rate is a matter of historical fact.  Swapping history for a future or lower exchange rate is ones prerogative.

People used to view a Dyson purchase as an investment and this helped justify the $400 plus price tag.  People no longer need to buy Dyson (for filtration) since companies like Red-Hoover must meet the subjugated demands of Walmart - A $98 Red Dyson knockoff is the result.

Dyson is not going out of business, Dyson’s business (his consumers) are going knockoff’s.  It happened first in the UK and now other countries too.  The global meltdown ain’t helping either.

 
 DIB

DysonInventsBig wrote:

DIB:

I take umbrage with your logic which is flawed.  Using a one day exchange rate to extrapolate a sales number for an entire year is logically inconsistent and extremely poor business practice.  Sales occur over an entire year not on one day.  Hence, the reason Forbes uses $1BN in sales for dyson in 2007.  There is a big difference between $1BN and $1.22-$1.5 BN in annual sales.  Your sales number for dyson is meaningless.

Not to say that $1BN is good either.  For a company like dyson with 20 years of history in the UK and now in 40-50 countries worldwide with products averaging $400-$500 each, and 6 plus years in the USA market, not breaking the $1 BN mark in annual sales is a weak financial indicator.  Especially in lieu of the global recession in 2008 and beyond.  2007 most probably will be dyson's best sales year for a long time to come, if it survives the economic meltdown. 

Carmine D.