Wednesday, November 17, 2010

JBII's latest 10Q discusses Pak-It's "DropShots"

On July 30, 2010 Pak-It launched a new retail product line called DropShot. DropShot’s initial advertising campaign was managed by Western Creative and included a 60-second and 120-second commercial, as well as an online store, The launch of DropShot commercials was seen by the Company as a way to gain a better understanding of this market’s dynamics. With the airtime we purchased, the commercials provided limited success, and the Company expects to pursue a more in depth retail approach when it makes more financial sense.

DropShot’s unique selling proposition lies with its packaging process, which is positioned to capitalize on the ‘green’ movement that many businesses and consumers have become focused on. Although the retail-cleaning sector is highly competitive with low barriers to entry, by exploiting our technological advantage, and through correct product positioning, the Company believes there is an opportunity to derive considerable value from what many would consider a saturated market. A successful marketing approach will involve significant up-front financial investment to make sure that DropShot and Pak-It products produce the revenue we believe they are capable of.

When purchasing PakIt, we saw that there was a considerable amount business value that was being lost to inefficient internal controls and operating procedures. In addition, the Pak-It accounting system runs from a DOS operating system that turns tracking orders and analyzing data into a complex process. We have invested in a new accounting system for this subsidiary, which is currently being implemented. With this new accounting system, purchasing, production orders, inventory, sales, and shipping/receiving will be integrated into a network with the capacity to accommodate larger sales volumes, increased inventory turnover, and a shortened cash conversion cycle.

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