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

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.