Apexcone - Its been 10 years. Now what?

[jsp98m3]

As we roll into 2011 Apexcone will be 10 years old on March 1st. When we entered this market, it was essentially in its 10th year as a market. That's a long time for a market, especially one that is brand based. Our original business was making angel eyes and other accessories for the BMW. As times have progressed we pretty much stayed a BMW lighting vendor through DDM Tuning which took off in 2005 and has pretty much been the price leader in lighting, bringing lighting and accessories to literally hundreds of thousands of customers.

As DDM Tuning did its thing, I personally got involved in other things. I've talked about many of them before, so I won't bore you with too much of it. But essentially, we started an LED company, we invested in other companies in China and bought a factory in Taiwan that makes things for bicycles and sewing machines. We invested in shipping franchises and I started buying up a lot of apartment buildings when the economy tanked and asset prices plummeted while rent incomes actually increased.

Let me give all of you a life lesson. It never hurts to be heavy in cash. Most Americans have lunch money.

So Jimbo, where we going with this?

Basically the best way to make a lot of money is to run a market. The best way to run a market is to know when there is a market or a better one opening up and flog it hard for cash. That's what I've done off to the side. DDM Tuning has been focused on just selling you guys good product for cheap.

Behind the scenes, we have been looking hard at the business. Most people don't do this and that's why people fail.

So, amazing as this sounds, DDM Tuning is going to reinvent itself for the next decade.

A lot of the products we sell now, we are not going to be selling anymore. Some things we sell we will sell a lot more of and most surprising of all, we are going to move out of HID and a lot of other lighting products within the next several weeks. By the time we get to March 1st which is Apexcone's 10th anniversary, we will be doing something mostly different.

Go ahead, call me crazy

Now, besides just telling you WHY you will start to see drastic changes on our website, I'm going to give all of you some good news. If you like bargains, keep your eyes open on our clearance section. I think we have about 2, maybe 3 million dollars worth of inventory that we are going to be getting the heck out of here because I have 2, maybe 3 million dollars worth of different stuff on order and I need to get the warehouses cleared out and completely reconfigured for the new inventory.

Other random stuff:

1. DDM Tunings website will slowly and then more and more rapidly start to show massive changes to reflect the reconfigurations of the business model.

2. Shipped prices on bumpers will start to get ridiculously low. Several other vendors have been using Greyhound delivery for these large oversize items. We are not only going to do exactly the same thing, I took it a step further and I used the Apexcone freight division (San Diego operation known as LGG Enterprises) to quietly buy up a lot of the Greyhound P&D contracted providers all around the country and make money when customers buy from the competition. (Side Note: Didi you know American Apparel ships clothing to their retailers by Greyhound? Bizarre...) Although, I think my shipping prices that will start to appear on the website will be interesting enough that this dynamic may change.

Anyway, enough rambling. I have lots of work to do. Watch the clearance section, there is going to be a lot of stuff on there shortly.

Jim

[rohner88]

This sounds like a great thing for you, but how about your current customers? It's all me, me, me, ofr course. Lol! Is the new venture going to be in the "BMW/Automobile" field? Let me guess, stay tuned, right?

[ttkid06]

glad to see you posting again Jim, clearance section it is!

[EMC]

If DDM is not going to carry HID's anymore, what happens to with the warranty for those of us with raptor HID's, etc.?

[jsp98m3]

Warranties will be unaffected. I'll keep a stash for it. Despite all of the blithering from competitors who couldn't match prices, these things are ridiculously reliable. We get very few back for replacement.

I was a Boy Scout, don't worry about it.

Jim

[pennpen]

what kind of products are you as a company going to be moving towards? if you dont mind me asking

so far your business model is pretty legit

[jsp98m3]

I've been putting together a lot of relationships with dealerships for OEM parts. People like Autonation, Penske and Sunroad. Those are ones local here. There are more in other areas. We are also going to be spinning up on LED business for cars, homes and other uses that will be on other websites.

At some point shortly, there will be a new twist on lighting technology for headlights. HID prices were driven into the dirt (why thank you DDM) and that almost always is indicative of the stuff being a commodity product getting out of the way of the next thing. We're involved in the next thing.

Jim

[M3Alpine99]

But I want to buy some HID kits... better get on that in preparation for this change.

[just4fun]

So... why the 20% price increase on HID before the big blowout? LOL

Can you throw down a code for 20% off or free shipping to members here? Maybe free shipping on orders over $50?

Thanks!

[jsp98m3]

The cost of HIDs went up. Not the product, not the price I pay for them. The cost of the RMB and everything that is paid for in RMB went up because the dollar is weak in China and its weak in Taiwan.

Be careful when you hear things like the government railing against the artificial weakness of the RMB. They beat up China to let the Yuan appreciate against the dollar. Some in Congress have called for up to a 30% adjustment be forced on imported Chinese goods. Supposedly, this will help American manufacturers. Fair enough. It might. Assuming there are any American manufacturers of the product in question. But suppose there aren't? Then what? Well, the products you are getting from China will just cost 30% more. That's the net effect. It would be the net effect, even if there are American manufacturers because thats what Washington "claims" would spur American manufacturing. ORLY? Ok, assume that's true. We here do get the benefit of a product now being made here. I'm all for that. Jobs, tax revenue, blah^3. But the net effect is, inflation. Wherever the product came from, it still in the end costs more.

Anyway, I'm not complaining. But I do have to make daily decisions about where I get the best returns and the BMW market has some structural issues that will have to be faced by all vendors soon. I'm fine with facing them. We will continue to serve the BMW market. But we are going to exit certain segments at this opportune time to focus on longer term opportunities in new areas. That's why I've been investing heavily in transportation and in housing. I'm going to put my money where it will give me the best diversified return.

So, in short, prices were low(er) because I sell to the BMW market because I'm a BMW guy. I sell the stuff as cheaply as I can. That means that when there are currency variations, they effect me (and therefore you) more dramatically than the vendor who's been raping you for $100+ or even more for an equivalent product. Those guys can afford to hide the variations, they are making 90% margin anyway.

Jim

[MarketMaster]

The cost of HIDs went up. Not the product, not the price I pay for them. The cost of the RMB and everything that is paid for in RMB went up because the dollar is weak in China and its weak in Taiwan.

Be careful when you hear things like the government railing against the artificial weakness of the RMB. They beat up China to let the Yuan appreciate against the dollar. Some in Congress have called for up to a 30% adjustment be forced on imported Chinese goods. Supposedly, this will help American manufacturers. Fair enough. It might. Assuming there are any American manufacturers of the product in question. But suppose there aren't? Then what? Well, the products you are getting from China will just cost 30% more. That's the net effect. It would be the net effect, even if there are American manufacturers because thats what Washington "claims" would spur American manufacturing. ORLY? Ok, assume that's true. We here do get the benefit of a product now being made here. I'm all for that. Jobs, tax revenue, blah^3. But the net effect is, inflation. Wherever the product came from, it still in the end costs more.

Anyway, I'm not complaining. But I do have to make daily decisions about where I get the best returns and the BMW market has some structural issues that will have to be faced by all vendors soon. I'm fine with facing them. We will continue to serve the BMW market. But we are going to exit certain segments at this opportune time to focus on longer term opportunities in new areas. That's why I've been investing heavily in transportation and in housing. I'm going to put my money where it will give me the best diversified return.

So, in short, prices were low(er) because I sell to the BMW market because I'm a BMW guy. I sell the stuff as cheaply as I can. That means that when there are currency variations, they effect me (and therefore you) more dramatically than the vendor who's been raping you for $100+ or even more for an equivalent product. Those guys can afford to hide the variations, they are making 90% margin anyway.

Jim

Jim,
Do you have tri color and bi color automotive grade LED's?

[jsp98m3]

I'm going to have almost everything available. It just takes time. We have received two shipments of LEDs that we have been reserving. We have to complete extensive testing to make sure that all of them from all sources are good enough to sell under our model. We have done some of that. I have a LOT of stuff on order and ordered hundreds of thousands again last night. Within 6 months I expect to have approximately 5000 square feet of small bin LED products in stock.

Like the other things we do here, there will be a set up time to prepare and then we will begin making sharp intense penetration of specific products and spread that to more and more.

If you want to see the future, go look at superbrightleds.com and imagine everything worth buying on that site selling for 1/10th of their listed price.

And then, we'll get serious about it. But I do everything on a schedule and with a purpose.

Jim

[MarketMaster]

I'm going to have almost everything available. It just takes time. We have received two shipments of LEDs that we have been reserving. We have to complete extensive testing to make sure that all of them from all sources are good enough to sell under our model. We have done some of that. I have a LOT of stuff on order and ordered hundreds of thousands again last night. Within 6 months I expect to have approximately 5000 square feet of small bin LED products in stock.

Like the other things we do here, there will be a set up time to prepare and then we will begin making sharp intense penetration of specific products and spread that to more and more.

If you want to see the future, go look at superbrightleds.com and imagine everything worth buying on that site selling for 1/10th of their listed price.

And then, we'll get serious about it. But I do everything on a schedule and with a purpose.

Jim

Thanks Jim. Might text you a little later. Right now we buy most of our LED's from Osram

[DD/M]

Geez it was only last June when you were looking at your first Apartment Building...Now you have crap load of them!

I have been diversifying as well, Tell Sarah the Twins (boys) have arrived. She met my wife in HB...

[KHM3R]

i'm afraid

[jsp98m3]

I bought another one today. Well, technically, I had my offer accepted and the walk-through, building inspection and termite inspections are Monday @ 2:00. I'll probably be done with it by the end of the month.

I bought a couple of floors of this new apartment building in Nanjing too. There's a 4 story shopping mall on the bottom with 4 apartment towers coming up out of it. Owners get private elevators from inside the mall. I can just see the looks on their faces if I came out of the elevator by the McDonalds in my bathrobe to get coffee in the morning. At least the plans say there's going to be a Micky D's at the elevator on the 1st floor. I'll be sad if there isn't.

Congratulations on the twins!!! Double happiness just like getting married.

Jim

[jsp98m3]

i'm afraid

Why would you be afraid?

[dRock13]

Congrats Jim!

[rohner88]

Jim, am I correct in assuming that you'll be totally out of the BMW/automotive modding business in a few years if not much sooner?

[jsp98m3]

Jim, am I correct in assuming that you'll be totally out of the BMW/automotive modding business in a few years if not much sooner?

Nope. As I said, we will still sell some things and some others we will not. I still do this today,, not for the money, but for the hobby and to keep people from being ripped off. Remember back just a few years to pricing levels that were quite simply nothing less than robbery. As long as I can run DDM at break even or a little better, we'll keep the meat of the hobby affordable. Some things aren't profitable and hurt our ability to expand into new things that will save you even more money down the road.

I need the warehouse space NOW to make better things happen. I'm not interested in being a little mini Amazon.com carrying everything in the world. We are getting out of some things because some elements of the hobby have plateaued and will be either declining naturally or be replaced by something better soon.

The idea is to not figuratively fly the plane into the ground, its to exit some things to do other things people will need.

Jim

[BadBoostedBmwM3]

Well, Im always happy to see people's business expand/move for the better! Cash is king.


BUT, Im sad to hear about no more HIDs. Maybe you should just keep a few (hundred) around for us for forum members.

What company or companies do you recommend for purchasing our lightning needs??

Are you going to be keeping all the bumpers?? I know you say they will be "cheap."

Jim, please excuse my ignorance, but what is your relationship with DDM. Do you own it or just work with/for them?? I ask because if you work for them does that mean DDM will supply our lighting needs??

[rohner88]

Oh, ok! Glad to hear that. Can you shed more light as to what current automobile products your you'll stop carrying and what products you'll continue to invest/improve into? I'm very curious

[bam240sx]

This does suck for the HID category but i am interested in this up and coming change, keep us updated!

was just curious as well, when i orded just some HID's bout a year ago i some how got free shipping after spending over 75... i got some other enthusiasts in the area hooked on ddm and we are making a bulk order thats going to be in the hundreds (least 2-300 so far and climbing) yet its giving us a big shipping quote? was it just a limited time special or something?


thanks,
~Blake

[6banger17]

nooooo i have like a 1200 dollar cart on ddm and now u guys are rushing me lol
i should definatly get those depo projectors with the quickness lol

[bimmerg36]

Is there any way to get replacement lenses for the DEPO lights with the corner light tabs? I know you don't offer them separately. Or are the Apexcone lenses with tabs still available?