Why IO Retail?

Innovative Operations has plans to construct numerous different branches across various industries.

So why start in retail first?

Cost-Effectiveness

Capital allocation is a crucial component to strategize around, especially early on. The one thing a business can not do is run out of money, but it is much easier said than done.

With objectives as grand as ours, it is vital not to make mistakes too costly as they would surely be fatal.

That's why we needed to plan for the right business model.

Although our core business is to be in the field of robotics, entering such a field prematurely is exceptionally risky in our current state of time.

Robotics, thus far, has an uncertain future in many commercial and industrial applications. Promising robotics startups have quickly fallen with the primary reason being a lack of product-market fit.

They've attempted to make a robotics system and look for problems to solve rather than to look for problems that can be solved almost exclusively through robotics.

This is why the drone industry thrives and its leaders are healthy.

But to acquire the means of production at the necessary scale without near-certain demise would be capital intensive and unnecessarily risky for a fledgling business.

More so, it comes with all of the other detriments in a hardware/product business.

Software businesses have not only the ability to expand operations more easily, but the product can be improved more quickly. It requires less starting capital while maintaining equal or often better margins.

We are not a software business, yet we do combine the best of both worlds.

Positioning ourselves not just as a retailer, but as an online retailer, removes the bulk of issues associated with manufacturing in a hardware business while still allowing us to sell physical products. Likewise, it eliminates the purely digital presence of a software business while still being able to scale like one.

It should also be mentioned that because we are to remain privately held, our growth is highly dependent on seeing revenue and profits as soon as possible. Other branches would require additional time and money for product development.

Our primary challenge is now marketing - the battle of every new company.

Data

It's the new oil.

Starting with IO Retail puts us in a peculiar position compared to the other potential options. We get to know where market trends are heading.

Lack of such knowledge is the bane of manufacturing companies which have to know this information. We can't say when or how drastically the market will change, but sales data allows us to make more accurate predictions.

We get to see what exactly is selling in the electronics industry at the final stage of the supply chain.

We see what consumers are looking for and what they aren't.

This allows for a smooth transition into one of the core branches that IO will diversify into:

Manufacturing.

Let us make it clear that vertical integration will be vital to our growth plan.

By manufacturing and designing the products that IO sells, we gain better control over the brand's image, the brand's quality, the ability to leverage retail data to choose products most relevant, and most importantly, IO's self-sufficiency.

Scale

Previously mentioned was the scale of software/online businesses and their reach.

The main plan of doing business upon IOs inception was, and still is, in the B2B space.

Due to starting in electronics retail, however, we are positioned as B2C earlier than later. But, the potential of a retail business should not be overlooked, and it is perhaps better to start building it sooner than later.

The two largest companies by revenue - Walmart and Amazon - are retail businesses.

They both deal with copious amounts of customers and sales. Walmart's stores make millions per week and they've built up their revenue largely by expanding to additional locations.

The most essential advantage that Amazon had over Walmart during its creation was that they were an online store. They could expand far more quickly, they required less time to set up, and they could be visited by anyone.

When Amazon began growing, its revenue wasn't primarily dependent on how many locations they could open up.

For Walmart, location can be as much of a benefit as it is a detriment. People are only willing to travel so far to reach your store before they settle for another brand. Furthermore, you can only open up so many stores close enough before they cannibalize on each others' sales.

For Amazon, all they had to do was attract customers to a single location capable of hosting thousands at a time - their website.

This saves time and money that would otherwise be spent on choosing locations, updating their supply chain, hiring employees, maintaining the stores, and marketing the store's presence. With an online store, your ability to scale is limited mainly by brand awareness.

This is how a business gains scale at a fraction of the cost today.

Many modern online stores have seen similar results compared to physical retailers.

That is where IO Retail stands today, and we are only just getting started.