“Take 5 With Dave” – South Bay International Expansion

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Formerly the senior vice president of South Bay International, Toby Konetzny was recently promoted to chief executive officer. Here he shares how South Bay is becoming even more important and valuable to clients during today’s challenging economy.

Transcript

Waynette Goodson
It’s Waynette Goodson. I’m your managing editor of BedTimes Magazine. I’m standing in for the great Dave Perry here with Toby Konetzny. He is the senior vice president of South Bay International. Toby, why don’t you start us off with this? How are you getting a good night’s sleep these days?

Toby Konetzny
Sure. I mean, obviously, sleeping on one of our great mattresses and adjustable beds. I do feel exercise is important. So we definitely put that into the sleep routine, get a little sleep. But definitely, I feel like having an adjustable bed, which is actually something new that I haven’t always used.

Waynette Goodson
Wonderful. Well, certainly, adjustable bases are becoming more and more popular in today’s market. And speaking of which, in the current economic climate, how is South Bay’s value growing and becoming more important for your members?

Toby Konetzny
Yeah, that’s a really good question, I guess. It’s definitely something we think about and plan for, particularly going into the next six months of the year. And you know, with the economic changes that are happening. So what we do is we offer a product line with seven different adjustable beds at different price points. But the unique part is everything we do is drop-shippable.

So our entire product line, from mattresses to adjustable beds to our upholstered beds, are all drop-shippable. So that allows us to be a great value for the retailer. And we also then provide a direct-to-consumer drop ship environment for them. So that kind of helps that out. We’ve also worked with our product development team.

We’ve actually developed an entire product line that we’re launching here at lower price points. So we’ve kind, I like to say, value-engineered our product a little bit to drop it, maybe a $50 to $100 retail where it would have not only been, but then we also feel like there’s a great luxury segment still happening.

Toby Konetzny
So we introduced a good amount of new hybrids and various technologies in that $699 to $999 price point where we’re feeling is a good sweet spot for that mid-luxury price point.

Waynette Goodson
Now, speaking of luxury, another trend is private label. Can you speak a little bit about just how South Bay is involved for private label?

Toby Konetzny
So the unique thing about South Bay is everything you see here is actually white label. So South Bay isn’t particularly the brand. We’re an OEM manufacturer, so we build brands for people. So everything you see here, there’s no South Bay on the box or the mattress covers. So we work with various customers, and we have a very low requirement for us to brand the products for them.

So we like to be a good house brand for our retailers, our dot com folks, and shipping. So that’s kind of the unique part with everything that we do here. We help you build a brand. Our marketing team has a whole kind of template for that and it works out nicely. I think it’s important for a retailer. Cross-shopping is still a really big deal.

And, you know, I think a lot of retailers can’t invest in developing a brand. And because we’re a vertically integrated manufacturer, we pour our own foam, we make our own springs, and we make our own adjustable beds. So everything we do is vertically integrated. And that helps that retailer build a brand through our supply.

Waynette Goodson
It sounds as if you do it all, Toby, so very impressive, very impressive. So when you’re looking to the horizon, you already do so much. I mean, are you thinking of any new products or any special programs?

Toby Konetzny
We just.

Waynette Goodson
Yeah.

Toby Konetzny
We just went online actually with our Juárez, Mexico facility. So we’re actually pouring foam in Juárez. We’re a spring manufacturer there as well. So now we’re vertically integrated in all aspects of foaming. We’re producing mattresses in California, and then we have three different warehouse distribution centers throughout the United States. So on the horizon, we’re really trying to see how we can shrink the inventory need for retailers.

Let us be the inventory, you know, warehousing and distribution and logistics for them. This way, we can build a branded product on their floor, and we can then facilitate the logistics, getting it to their end user.

Waynette Goodson
Wow. So you are truly South Bay International.

Toby Konetzny
That’s right. We are.

Waynette Goodson
Well, listen, thank you so much for your time.

Toby Konetzny
I appreciate it. Thank you so much.

Waynette Goodson
But we promise you that Dave will be back soon. Thank you so much.