RDIM Relevant Information based on the December 28th conference call and newly gathered information:
RDI-Marketing was formed in July of 1998 as a merger with an existing shell. RDIM while presently a developmental stage company is currently (first quarter of '99) evolving to be an operational stage player....
I believe this is about to happen.
If it does happen, as I'm hoping it will, we should see a very nice rise in price from RDIM's current closing price of .91 on Friday:
dailystocks.net
It's primary business is as an acquirer of private wholesale buying clubs. As such RDIM expects to become the nations largest player in this industry by consolidating as many of the fragmented 150 private wholesale buying clubs through-out the country as possible. RDIM will commence with an e-commerce internet launch sometime in the second quarter of this year. Their main emphasis is to form a private wholesale buying club for Internet/Web TV users coupled with about 100 physical locations through-out the U.S.
The wholesale buying club industry has two distinct segments. One is the typical public wholesale club; ie., Costco, SAMS, etc. and the second segment being a private wholesale club type. The former has over a $100 billion market, while the later consists of approximately 150 fragmented operations, and enjoys about an $8 billion subset of
this market. RDIM is attempting to consolidate the smaller sub-set of the private wholesale market. The acquisition of PCS will be the first move towards this very large undertaking. RDIM will separate themselves from many existing e commerce companies because they will not be simply building a site and hoping to find customers. RDIM will already have a customer base in place due to their plans to consolidate the private wholesale club industry. They will not be spending huge amounts of money to find a market to serve or on advertising to find potential customers. Instead RDIM will be using e-commerce to better serve an existing customer base. For reference... Costco is a major player in the former group and with 246 physical locations has a market cap of $50 Billion dollars and is larger than Microsoft... BTW both out of Washington state. Costco members are of an essentially public club. Costco has no way of knowing what these consumers might need on a forward looking basis. Costco facilities are very large and contain a great deal of inventory ready for sale to their consumers. Costco sells factory close outs, overstocks, discontinued items and often off brand name products. Those products which might be considered mainstream (food products) are generally sold in such unusually large quantities. Costco has been wildly successful despite these obvious drawbacks.
Private wholesale buying club industry facilities are much smaller usually between 6,000 to 10,000 square feet. In an RDI Marketing facility a showroom will be found where products can be shown. These products will range from a wide variety of products, virtually any kind of item you can find in and around your house. The private wholesale buying club premise operates completely different than than of public wholesale model. Initial membership fees are higher but overall savings are dramatic. In addition members will be able to buy those products which they are really interested in not just items limited to stock on hand. Members will find a service center will be in place of about 1000 to 2000 square feet in which they can expect to find between 500 to 1500 manufacturers, wholesalers and distributors catalogues available. There will be literally 100,000's of name brand products available. RDI Marketing's internet e commerce application will allow the use of intranet communication between one club and another. Manufacturer information will be available over the internet allowing customers to be serviced in whatever manner which they choose. A front end set top box like Web Tv can be used for those who do not have sophisticated computer equipment.
The private wholesale buying industry does something very special and quite significant which separates them from the public wholesale market and in fact any business model set up to date. Members of these clubs join for one reason only to spend money while achieving cost savings. They also provide their buying clubs with detailed psychographic customer profiling. This information is extremely detailed. As a result Club Members will get very pointed information about the kinds of products in which they are truly interested. Club Members thereby receive information on products they are interested in rather than being bombarded with information about products in which they have no interest. The company will be able to send out information via fax, e mail and or snail mail information on products in which the consumer is actually interested in a very timely fashion.
John Folger is the President and visionary of RDIM. His past expertise is as a joint venture partner with the high technology group. I have personally met John Folger and many of the individuals on the management team. Click on the URL below to read a post with some background of those on this team:
Message 7784554
RDIM expects to offer products at wholesale prices plus a 5 to 10% mark up and handling and shipping charges. Savings can be expected to be about 1/3 off what what we are accustomed to seeing as a retail price. An RDIM physical location can be expected to have between 500 to 1500 manufacturer's catalogues available for the consumer to view. These manufacturer's information will be available on the internet.
Internet shoppers who are not members will see the manufacturer's retail prices. Members will have access to seeing actual wholesale prices by using their personal identification numbers.
RDIM intends to use one to one marketing. Detailed purchasing information will make this possible. Each new member will willingly fill out multiple pages of a buying profile in order to insure deep discounts and pointed sales information. The Avatar demonstration which I saw in Vegas was a prime example of how personalized this could become. Service will be designed in a very unique fashion by use of data warehousing. Members can be alerted when a particular product in which they have expressed an interest goes on sale. The use of e-commerce will make this private wholesale buying industry work faster, better and more efficiently.
RDIM expects to become the major player in private wholesale clubs and is currently doing DD on several acquisition candidates. They have been in talks with like PCS with whom a letter of intent was recently announced. In addition during the late December conference call RDIM announced it was making progress towards acquiring several other turn-key and profitable players (primarily in the south and west) in this industry. These expected acquisitions were estimated to bring $30 million in revenues to the company this year. Three letters of intent were announced as signed. I would expect to see fruition of many of these potential acquisitions shortly starting with PCS. In addition Thunderstick Software is also going to be acquired which will add a great deal of revenue:
biz.yahoo.com
RDIM expects to generate revenues from three areas from Club Members. They are; initial membership fees for the ability of the private members to buy from manufacturers at truly wholesale prices. The second is the handling charge for acting as the liason between manufacturer and purchaser. The third is from the annual renewal fee charged to members.
RDIM expects (as previously mentioned) about 100 physical locations to bolster the Internet and Web TV areas. All three mediums will offer information and stats on thousands of currently available household items from over 1500 manufacturers. All products will be digitized (in Singapore if a potential acquisition that was discussed during the conference call is finalized) at a substantial cost savings versus the U.S.) and the website will provide a multitude of comparable items.... not just the selected group that traditional wholesale clubs buy as a result of discontinuations, close-outs, etc.
RDIM will use EDI (Electronic Data Interphase) technology to expedite and maintain direct links with their physical locations and manufacturers
The demo website is expected to be up this month as 60% of the hardware is installed...with the final completion in May or June of '99
RDIM expects to focus their concentration and efforts on offering to their private customers the best deals which are congruous with psychographic information that will be provided by the customer. Data warehousing will kick in and send Email, fax, or snail-mail to the customer notifying them of considerable savings from mfgrs. on items
that the club member expects to purchase at varying defined intervals. All types of goods from tires, to cars, to furniture, to rugs, and tile, and appliances will be available. Club member will be able to research from several competitors model lines directly through the Internet....Web TV.... or the expected 100 physical showrooms throughout the country.
RDIM expects to generate well over $100 MM in revenues by the second year of operations (if not earlier)
If RDIM acquires the Asian Navigational site discussed in the conference call the company may establish it's own web portal design. This company is based both in Singapore and the United States. This company had 16 million hits in the month of November by people who used the site for any number of applications which parallel those of a site like Yahoo. The number of hits is important because advertising banner revenue is generated based those numbers of hits. This site could serve as the catalogue generating site for the e commerce site Catalogues items could be scanned in at 20 to 25% the cost of what it might be done here in the United States. Once a manufacturer's complete catalogue of products it will be available at wholesale prices to club members. Manufacturers who do not have this kind of detailed product information available on the internet might actually license from RDIM a turn key solution and use it on their own site with public pricing available there. There are many possibilities for growth for RDIM and it's e-commerce solutions. For instance RDIM could be looking forward to offering all sorts of financial applications through this site. Many parties have expressed interest to provide goods and services through the developed RDIM (primarily owned) conduit.
RDIM can be expected to provide the conduit for EOM purchasing agents and to utilize the backbone of their system (and EDI with other manufacturers) to facilitate the purchase of raw and finished materials for various EOMs.
RDIM expects to provide to all members any household item. All items will be new current inventory and can be drop-shipped to 90% of the country.
RDIM analogizes their system to the Century 21 reverse franchise operations which forever changed the complexion of the real estate industry.
RDIM suggested that they were looking into a half a dozen pre-existing names already registered with Internic,that are currently more in-line with RDIM's expected website activities. It is expected that when the RDI Marketing demo site opens it will be under a much more attractive name to consumers and stockholders alike.
RDIM stated they were in talks with Microsoft (the licensor) of the Web TV format that RDIM expects to use in conjunction with their web-site. RDIM also stated that they were in talks with POWER X a company which provides deeply discounted medical insurance and may do so for RDIM Club Members.
RDIM's core mission is to develop the infrastructure for e-commerce applications with a primary focus on the private buying club industry. Once that happens RDIM is free to concentrate efforts towards developing efforts throughout many areas. RDIM feels it has the potential to become a provider for purchasing agents in much the same way as the Thomas Registry currently offers.
Operating capital has been raised through a 504. Expect a Form 10 to be filed soon for the company to become fully reporting. An SB2 follow on offering of restricted shares can be expected a few months after the Form 10 is filed in order to raise more working capital.
As the stock price improves RDIM will have the ability to acquire more private wholesale clubs using a lower number of restricted shares for each acquisition. The company hopes to raise around $20 million in the SB2 follow on offering of restricted stock. This will help make these additional acquisitions possible.
Regards, Jeff |
