Right business model is Signature's tower of strengthRight business model is Signature's tower of strength

Published: 2009/09/07

THE outsourcing and exclusive dealership business model, which was "coincidentally" developed due to cash flow shortage, has been the tower of strength for kitchen cabinet and wardrobe maker Signature International Bhd.

Managing director and co-founder K.C.Tan said he was a salesperson for the modular kitchen cabinet systems for four years before deciding to start his own business with his colleague in 1994.

"In this business, you either be a retailer or manufacturer," he said.

To be a manufacturer, one has to have large capital, so Signature decided to get manufacturers to do contract manufacturing for the products that it distributed through re-sellers.

"We give credit terms to them (re-sellers), but we faced problem in collecting the payment. So, we decided to go straight to end-customers and that's how we started our retailing business," he said.

Later, they found out that a low-price strategy did not work. "So, we came out with our brand (Signature Kitchen), with more quality and value-added. We outsource the manufacturing, appoint dealers to open the showrooms and we focus on design, product development and marketing," he said.

Signature also gives opportunities for its staff to be dealers of Signature showrooms.

Tan said a latest check with the Companies Commission of Malaysia showed that Signature's closest rival in Malaysia has less than RM10 million revenue with only 10 showrooms.