subject: American Security Supply Proves this is the time for Small Business [print this page] American Security Supply Proves this is the time for Small Business
With today's economy, the opportunity cost of not starting a business may seem to outweigh the advantages of going down the path of starting a new venture. This can seem especially true for retail businesses. With the economic downturn, many must cut back on spending, or simply do without. However, some entrepreneurs have been able to find their niche in this market. Jeff Jones, owner of American Security Supply, is an example creating opportunity in a time of such uncertainty.
American Security Supply's philosophy is simple: Law enforcement employees cannot be expected to make such cuts while risking their own lives to keep citizens safe. American Security Supply has created a solution for employees of the criminal justice system.
As a budding distributor, American Security Supply is a model for small businesses. The majority of small business owners do not have the resources to compete with corporate retail giants: they cannot afford to risk large amounts of capital to earn a high return on their investment. In order to be profitable, small businesses must create additional value when offering products and services.
This is the case for American Security Supply. First, the federal government must commit a certain percentage to small businesses for the purchase of these items (as opposed to awarding contracts to big suppliers). Because this sole proprietorship is a distributor with several vendor relationships, law enforcement agencies and employees alike can visit one website to purchase various pieces of equipment and gear.
This allows consumers the convenience of visiting one outlet for obtaining the products they know and trust. For example, the company offers wide variety Under Armour products. Even better, American Security Supply obtains the inventory from a wholesaler, or directly from the manufacturer. This enables the company to offer these products at a lower price than what someone would typically pay a larger retail distributor. By offering its products on a retail website (www.americansecuritysupply.com), customers have the convenience of finding what they need 24/7.
The distribution model has its benefits: with no inventory to purchase, small businesses minimize risk exposure, allowing the company to focus solely on generating new sales. If no inventory is kept on site, then no depreciation of said inventory needs to be considered when building the financial picture of the entity's health. While the return on investment may not be as substantial as that of a larger business, it gives new ventures (such as American Security Supply) a chance to develop a modest profit margin.
Another way the wholesale distribution channel helps small businesses is that the business assumes no "reinvention of the wheel." Because transactions are done directly with the manufacturer, the distributor is not involved in the manufacturing of a new product. Instead, American Security Supply can buy goods directly from the manufacturer. In return, American Security Supply helps the manufacturer distribute and sell its products. For example, American Security's website advertises a flashlight for the price of $48.99. Larger retailers sell the same flashlight for an average price of $60.00.
Some may argue that the risk of liability is compounded for the wholesale and retail distributors with such an arrangement. This can be true if you consider website, advertising, and shipping costs. However, there is always risk associated with any business. Again, risk is limited with no property, plant, or equipment expenses, but rather the operating expenses. On the upside, revenues are generated immediately. Wholesalers obtain their revenue when the retailer buys from them. Of course, the retailer's revenue is obtained immediately from a consumer directed purchase. Bottom line: as long as sales are being made, you will see net profits immediately.
While this arrangement can be quite good for a sole proprietor, it should be an attractive proposition for investors. A small business such as American Security Supply has optimal opportunities to attract investors if there is an interest in more substantial growth. For example, a wholesaler and a retail distributor could agree to exclusively work together, focusing on their niche markets. The wholesaler would presumably be larger than a retail distributor, considering they are purchasing the inventory in large quantities to sell later.
Another benefit for American Security Supply is it is not captive to law enforcement professionals. While there is no doubt its products are more tailored to these professionals, there are many others who could benefit: ask any group of teenage boys who are up for a good game of "manhunt!"
We all could learn a lesson or two from Jeff Jones of American Security Supply. Instead of waiting for the economy to get better, he isn't waiting. He's creating opportunity while providing a valuable service. Let us all do our part and do everything possible to support small American businesses: our economy depends on it.
For more information about American Security Supply, please visit www.americansecuritysupply.com.
