Order efficiently, sell better:
pixi* retailer eXXpozed developed a data-based purchasing strategy with automated minubo reports
eXXpozed’s previous purchasing routine was not supported by any meaningful figures and reports – In fact, most purchasing decisions were made on gut feeling. This consequently caused the following problems:
- Insufficient storage space: Products ordered by instinct were not selling as well as expected and filling up the warehouse. There was hardly any room left for new products.
- Lost sales: Ordering too many products means unused potential for higher sales volume and inventory turnover. Far greater sales revenue could be secured here.
- Low purchasing discounts: Lack of data transparency meant supplier orders were seldom made precisely accurate, so reorders had to be made often – with considerably lower discounts than would have been possible with preorder.
As eXXpozed never had any chance to control their purchasing based on available data, a huge potential exists to sustainably increase sales and inventory turnover with optimized supplier orders – through proper figures and reports available for decision-making.
So, eXXpozed has been using minubo since Fall 2014: Precise planning of purchase orders is just a mouse click away using minubo’s reports. This data is worth hard cash when negotiating with suppliers.
Equipped with a new, improved purchasing routine, Andreas Bindhammer has set himself the following objectives:
1. Constant availability of top sellers
2. Low discount rates for sales
3. Stable sales volume, even during weaker months
Analyzing and devising the steps to take
Objective 1: Top sellers should be available at all times!
- Establish top sellers based on inventory distribution rates and sales margins
- Make chronological demand for top sellers transparent using historical customer ordering behavior at the item level (product/size/color – basic sales levels and peaks)
- Reporting cancelation rates per item: These also influence item availability and reorder requirements
The figures demonstrate how delivery amounts and dates should be selected to guarantee top-seller availability at all times. This avoids delays in deliveries to customer as well as expensive reorders, while ensuring effective management of stock and fluid sales. All obstacles to fast-moving top sellers are gone!
This minubo report shows inventory movement, sales revenue, profits and stock items – and can be easily filtered by clicking on either individual suppliers or different time intervals.
An item-level discount rate report (product/size/color) prevents unintentional discounts in the future.
Objective 2: Slow-moving stock should be reduced and discount rates lowered!
- Create transparency in existing discounts: Item-level net sales discount rate (product/size/color)
- Make inventories comprehensible and identify slow-moving stock: Stock and sales rate at the item level (product/size/color)
The compiled reports make visible, where (possibly regularly?) Backlogs exist that are recoverable only with discounts. Moreover, how great the correlation between past backlogs and discounts has been over time can also be determined. Identifying slow-moving stock prevents replenishment of these items so inventories no longer accumulate of products not in demand, avoiding involuntary discounts for recovery purposes.
“Making purchasing decisions on gut feeling exposes buyers to incalculable risks – ultimately, involving high investments. Thanks to minubo, I now have a concrete base for decision-making during discussions with my suppliers!”
Andreas Bindhammer, CEO of eXXpozed
Objective 3: Sales volume should remain stable, even during weaker months!
- Sales volume and brand/product-group sales – overall and during the year
- Establishing discount potential to stimulate sales volume during weaker months: Reports on sales margin rates (how much leeway do we have?) vs. inventory distribution rate (how high is demand?) of individual items, as well as analyzing success stories in previous discounts.
To maintain stable sales volume throughout the entire year, eXXpozed emphasizes product range in brands that do not only sell in certain seasons, but provide high sales revenue throughout the whole year. Furthermore, purchasing and advertising of seasonal products can be much better analyzed so high earnings can also be attained via this channel in as many months as possible. If there are weaker months nevertheless during the year, eXXpozed would like to take systematic counteraction with carefully planned discounts. However, balancing various supplier prices guarantees margins will remain high!
This sales volume report quickly identifies top performers among product range brands and categories – both throughout the entire year and seasonally.
Well before the actual performance review following the 2015-16 winter season, Andreas Bindhammer is already fully aware that the new purchasing policy is extremely healthy for his business – after having used the minubo purchase report only seven months, he can already draw the following conclusions:
- Transparency in supplier and brand performance: Some suppliers and brands perform considerably better or worse than previously assumed. The new reports clear things up and order decisions can be adapted accordingly.
- More time saved: 50 hours were previously required every season for eXXpozed to prepare, albeit in a makeshift manner, each individual delivery deadline using laborious and cumbersome reports. Switching to minubo reduced the time required to only 20 hours, or less than half. This saves more than three person-days each season!
- Assurance in supplier discussions: Now that purchases no longer have to be decided on gut feeling, Andreas Bindhammer enjoys a much better starting point during supplier discussions. He knows exactly what, and how much he would like to purchase at which price – and what not to purchase. This not only makes him feel more secure, but also provides him room to negotiate.
“I would absolutely recommend minubo to any pixi* retailer. pixi* mail order software offers considerable advantages in purchasing and inventory – and these strengths are optimally complimented by minubo. All valuable data pixi* gathers for me can be practically utilized with minubo, so control of my purchases is more efficient.”
Andreas Bindhammer, CEO