This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

#DigitalSkeptic: JOBS Act Maker Investors Face Major Retail Hurdle

FLUSHING MEADOW PARK, QUEENS, N.Y. ( TheStreet) -- Austin Frawley didn't need to make the trip here to the New York Hall of Science, this year's site for the World Maker Faire, to figure out the big business problem lurking in the big "maker movement."

"With these new startups you can tell pretty quickly that they're only in it for themselves," Frawley told me on the phone last week, long before the weekend's festivities.

A new generation of investors, let loose this week by the deregulation of private investment via the JOBS Act, will want to pay close heed to Frawley. He's director of operations for Kidding Around, a chain of three upscale specialty toy stores in Manhattan and Northern New Jersey. Frawley grew up in the world of actually selling pricey, hip gadgets to kids and young adults and as such offers a unique perspective on the red-hot market of privately financed pricey, hip products enabled by a new generation of 3-D printers such as MakerBot, open-source chip development platforms such as Arduino and Raspberry Pi and computer numerical control tools such as ShopBot.

His mother started the business 23 years ago, and over the past two decades this 30-year-old has witnessed one major business innovation onslaught after another.

"We got so beat up on price with Walmart (WMT), Toys R Us and Amazon (AMZN)," he explained, "that you learn the hard way that even the greatest product in the world will not be something you can touch if the price is wrong."

Frawley is blunt about the pricing challenges the new generation of smart products faces.

"We are really excited about some of the toys coming out of these companies," he said. For example, Frawley was initially attracted to a line of snap-together circuits and control kits from a Manhattan-based company called littleBits.

"They are here in town. It's a great toy," he said. "But we took a look at what they are selling it for online, and there is no room left for the retailer."

Makers don't have much room to make any money
To get a feel for just how serious the retail pricing challenge will be for the larger maker movement, I made the trip out here to check in with some of the maker movement's biggest movers. And sure enough, Frawley's take on the challenges of making money as a "maker" hit a bullseye.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs