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Jawbone Fails To Pay Key Business Partners and Has Almost No Inventory In Stock: Sources (businessinsider.com)
BarbaraHudson writes: The battle between Fitbit and Jawbone may be coming to an end. Business Insider is reporting that wearable fitness maker Jawbone is facing some serious financial problems as the company has almost no inventory in stock and is running out of options to generate revenue. If you click on any of the products for sale on their site, it will say that they're all sold out. Business Insider reports: "Jawbone's Facebook page is littered with complaints from customers saying they have been unable to get in touch with a customer service representative to help with defective products. The Jawbone Facebook account has been responding to these issues, blaming a backup of complaints for the delays. A Jawbone spokesperson said the complaints were because of Jawbone's customer service restructuring. Another person close to Jawbone told Business Insider that there is almost no inventory left and the company is running out of options to generate revenue. The speculation among some Jawbone employees now is that the company might sell to a private equity firm if it can't raise more money, the person close to the company said. Jawbone also declined to explain why its inventory has sold out. A spokesperson said, 'they have sold through what they have to sell.' The company said it was not because it couldn't pay vendors though. It would not provide any estimate on when products would be available for sale on its site again, but did say it planned to make more products." The report says that, according to an internal NexRep email, the company cut ties with the customer service agency NexRep earlier this month after Jawbone failed to make payments. "The email, written to NexRep employees by a NexRep executive, claims that Jawbone is 'struggling financially' and that it couldn't pay NexRep for its services," reports Business Insider. "It also says Jawbone is 'fighting hard' to raise more funding. 'Jawbone is not able to pay us for past services, and their ability to pay us in the future is uncertain at this point,' the NexRep email reads." This resulted in "many staffers being laid off."
Well at least they have a good IT department... Maybe you meant a "backlog"?
Usually, we have a company that makes garbage no one wants, so when they liquidate they have a ton of stock. This is unfortunate... and stupid, because it seems like they should have taken SOME KIND of action before they had nothing to sell.
I wonder exactly how terrible they are when they have a product with a solid demand, yet no one will invest in them. There has to be embezzlement.
Gamingmuseum.com: Give your 3D accelerator a rest.
That they were affiliated with Hanjin Shipping, which went bankrupt a week ago and as far as I know their ships are still stuck off of the Pacific coast. If they didn't keep a large inventory missing a shipment could have just done them in. A line of speculation, but plausible at least.
Probably for the better. According to a study in theJournal of the American Medical Association, JAMA, fitness trackers don't actually help with weight loss. People get fixated on the numbers from the trackers and stop following a recommended diet.
The fits and collapse of a business are better discussed in a business journal. This story isn't really about technology at all.
They tried to be the Apple of the fitness world without a cult of mindless sheeple to back them up.
And we should care why, exactly?
Two niche gadget makers go after the same market, one wins, one fails...so what? Why are we supposed to care?
This kind of thing happens all the time, every day. What's the Earth-shaking news here?
Just cruising through this digital world at 33 1/3 rpm...
I wonder exactly how terrible they are when they have a product with a solid demand, yet no one will invest in them. There has to be embezzlement.
There doesn't have to be embezzlement. Most common when a company runs into a situation like this is that they are short on cash. The cash cycle of a consumer products company is typically something like this. I've simplified the times to make the example easy to understand:
1) Place order for components with 30 day terms. Components received within a few days of placing order
2) Build product between days 5-30.
3) Pay for components on day 30.
4) Sell product into distribution channels with 30 day terms on day 30
5) Receive payment from customers on day 60
So they are paying for components about 30 days before they get paid by customers in this example . That means that if they run low on cash, they don't have enough money to buy new components to build next batch of new product. What usually happens next is a viscous cycle. They push out the length of time before they pay vendors. Eventually vendors get tired of this and put them on credit hold or demand cash on delivery. This means they don't have enough cash on hand to buy new components to build new product so their incoming cash flow declines which makes it even harder for them to pay vendors. Lather rinse repeat and the company prospects decline.
This happens all the time to companies. If there is strong demand for products and/or back orders the company might be able to get a bridge loan or investment. If product demand is weak the company is probably looking at bankruptcy.
I'm still mad at them for purchasing Body Media, they used to make the body bugg fitness trackers. After the buyout they did nothing with the technology they acquired and then shuttered Body Media and the service needed for the old devices to work.
I could never understand why would any company risk JIT (just-in-time) on anything mission critical. At the same time everyone does it and disasters keep happening.
Money. Storing extra inventory is wasteful and expensive. If the supply chain is sufficiently robust then the risk of a stock out is minimal or can be absorbed if it happens. Companies like Toyota that have JIT production systems generally work very closely with suppliers to ensure reliability and they have draconian punishments if something goes wrong. If a supplier shuts down an auto assembly line with a stock out the fines are (no exaggeration) something like $10,000 PER MINUTE the line is idle so the suppliers are typically highly motivated to not cause a stock out.
Excess inventory is considered one of the seven deadly wastes. Defects, WIP, overproduction, waiting, motion, transportation, and overprocessing are all unnecessary expenses and companies should strive to minimize them. When you keep safety stock you have overproduced, generated excess WIP, have parts waiting for processing, and moved parts your customer doesn't actually need. All of that costs money. Now granted you have to weigh the cost of that against the cost of a stock out. Sometimes safety stock is unavoidable but it isn't something desirable.
The fits and collapse of a business are better discussed in a business journal. This story isn't really about technology at all.
It most certainly is a story about technology. Stuff that affects the companies that make technology is relevant to the technology itself. Slashdot is not and never has been solely about pure engineering stuff. Business, ethics, civil rights, and much more are all discussed here and always have been. Perhaps it doesn't interest you and that's fine but it does interest a lot of us who have been here a long time. It's certainly news for nerds and it's certainly stuff that matters.
"If you click on any of the products for sale on their site, it will say that they're all sold out.."
Except, _all_ of the articles are (still) available to order, just, not in the initially selected color.
Now, none of this makes either the articles themselves, or indeed the websites coding (how about, default to in-stock color on page load, chaps?) any more (or less) worthwhile. But the article above sounds like entirely speculative bullshit to myself and indeed, the first (and only) thing I checked, took me literally ten seconds to disprove and find every article still in stock. IANAL either, but there is probably such a thing as being needlesly damaging to a firms reputation, this under false pretences - and if they are that desperate for new revenue sources? - hell, who'd blame them. Reaching for the lawyer's number would appear, n this case, somewhat justified, IMO. Its also why, you should probably have capable editors, but thats another story altogether.
Greyhound used to keep full and complete busses at many of their depots, and spare parts for the major assemblies like transmissions, engines, driveshafts. They were considered unused/new items so they weren't taxed on them.
If they did keep unused buses in cold storage that was idiotic. Beyond any property taxes they would incur all sorts of expenses from storing them including the property and buildings to hold them, people to maintain them (even unused vehicles need maintenance), opportunity cost of cash tied up in an illiquid and non-revenue generating asset, security to protect them, and much more. Buying assets for non-mission critical just-in-case situations is wasteful and usually unnecessary. Taxes on the property are actually among the smaller costs involved.
By the way a bus would not be considered inventory on any balance sheet unless the company was in the business of selling buses. For a company like Greyhound those would be considered fixed assets and would be depreciated according to a depreciation schedule.
Ever since "Just In Time" has been a thing specifically to avoid property taxes on inventory.
The reasons for JIT go FAR beyond any tax consequences. In fact the taxes are usually among the smaller costs involved. To use your example Greyhound would be tying up (hypothetically) $100,000 in a bus that sits in a depot unused. They have to pay for a place to store it. They have to pay for people to protect and maintain it. They lose any interest income of investment income they could have earned on that cash. They have a depreciating asset sitting idle and not earning any revenue. The list goes on. Taxes are one more on the list but they aren't generally the biggest reason why holding extra inventory or assets is a dumb idea.
Marissa Mayer strikes again, lol what a tech visionary huh?
For those struggling to make sense of the above comment
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
If you're the customer waiting on parts, safety stock is pretty much mandatory from your point of view.
Only if the customer is willing to pay for it. Safety stock costs money. If the customer is willing to pay the extra cost of maintaining safety stock then and only then is it reasonable to keep safety stock.
If you want new tires and the store says sure, come back in 4 days when they arrive, you're going elsewhere
That depends on the tires and what sort of customer you are dealing with. JIT is only applicable with items with a production+delivery lead time shorter than the time between identification of need and time of delivery. You also have to consider the economic utility of stocking the part. If you have something like tires where there are thousands of different products it would be irrational to attempt to stock them all. So you either buffer them (warehouse etc) or you build to order. If somebody comes in and wants a tire that few others buy they might have to wait a few days because it would be economically silly for your local shop to stock it.
You keep having stuff out of stock, you ae sending your customers elsewhere permanently.
So don't have stuff out of stock when economically sane. Nobody is arguing that it is an easy problem in every case but the goal is to have as little inventory as possible. That results in lower prices for the customer and lower costs for the seller. Designing a supply chain that cannot work without safety stock is an inefficient supply chain.
Not surprising that Jawbone would tank after their phenomenally abysmal support of their original Jawbone Bluetooth unit. The charging terminals just didn't work after a few months. And for a unit supposedly able to communicate well you couldn't hear a call over the fan in the computer.
NRRPT/RCT