Ron Hamilton, the Scottish entrepreneur who invented the one-day disposable contact lens, believes he has come up with a unique business model that will push his fledgling firm into a position of global dominance.
Hamilton, who was yesterday speaking exclusively to The Herald, said he also believes the model for his company, Daysoft, could be used by other businesses, and that it could revolutionise the face of manufacturing across Scotland.
A projector's image of Daysoft's e-mail inbox is emblazoned on the wall of a room at Hamilton's High Blantyre-based operation, and it reveals that he may well be on to something.
The orders projected on the wall are pouring in - roughly at a rate of around 1000 new customers a month - and Hamilton said he expects his company to break into the black in 2009.
Daysoft, which manufactures and sells contact lenses, 18 months ago launched the world's first internet-based supply service direct to consumers, following the passage of new legislation in 2005, which lifted barriers that had prevented consumers from buying lenses from supermarkets and over the internet.
So far, most of the com- pany's recent cash burn is the result of advertising and promotional activity in its quest to bring new customers to its direct sales operation.
Meanwhile, the new internet-based business is running in tandem with his already-established lens bulk supply business. However, Hamilton is convinced that before long the new business will overtake the established business.
"Our business model is truly unique. We're like an Amazon.com that manufactures its own books," said Hamilton, the "inventorpreneur" who became a multi-millionaire after establishing Award, the world's first company dedicated to making one-day disposable contact lenses, which he sold 11 years ago to Bausch & Lomb, netting around £17.5m.
Hamilton set up Daysoft, formerly Provis, shortly afterwards with the declared ambition of turning the company into the biggest provider of one-day contact lenses in the world. That vision has remained undimmed. Minority shareholder Scottish Equity Partners recently pumped in a further £1.5m to help Daysoft take on and undercut the major supermarkets.
At the company's Blantyre base, every process, every tool, every machine is bespoke and has been designed and built on site, or by local firms under strict conditions of confidentiality.
Daysoft's strategy eliminates the need for distributors as well as marketing and sales departments - and, because customers place their orders via a website and pay upfront for the lenses, the business is also self-financing.
Hamilton, who grew up in a Lanarkshire family business that made curling stones, said: "People point to the supermarkets as being the ultimate business model, because they buy things in bulk and sell them cheap, but there is no way Tesco or Asda can be more efficient than we are.
"We're really going back to the way things used to be done in business. We're like the blacksmith making horseshoes. He didn't need a distributor or a marketing department. He just manufactured his product and sold it directly to his customers.
"We're a contact lens manufacturer that can receive an order in the morning, ship it in the afternoon and have it to the customer the following morning - the modern-day equivalent of the old high street blacksmith's shop. Because of efficiency, we're also able to offer better prices than any supermarket or optician anywhere."
He added: "Scotland has such a rich manufacturing heritage, but perhaps where a manufacturer is being pressured by distributors trying to force down prices, our business model might be applied."
Another critical facet of Hamilton's model is that "labour costs are irrelevant".
"Our cost to produce the contact lenses is a matter of pennies," Hamilton said.
"The only reason anyone would set up a factory in a place like China is to save on labour costs, but we'd only save a few pennies.
"What's important to our model is that we eliminate the distributor and that we are near to our customer base. The potential of what we are doing here is enormous.
"In 18 months we've built up a customer base of 12,000, and more than 80% of those are repeat customers.
"In another two years, we expect to have at least 30,000 customers, and from there we intend to springboard to the rest of the world."
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