Tag Archives: retail

Niche Retailer TrollAndToad.Com Makes Inc. 5000 Again

Clicks and mortar retailer TrollAndToad.com came in at #1063 in the Inc. 5000  fastest growing private companies in America for the second year with 285% revenue growth over the last three years. TrollAndToad.com is a the world’s largest retailer of collectible games. That is the very definition of niche.

So these guys are successful retailers. They are even more successful story tellers to attract customers, press buzz and decent management talent to the company.

Their website encourages sharing across the range of social media networks their customers may like. They have dedicated themselves to getting their story out.

I’m impressed because they get it. Sadly many companies do not. So the message is

  1. execute the business
  2. tell the world to attract customers, staff and media.

Successful businesses must do both, well.

TrollAndToad.Com’s also credit their growth and success to  acquiring the most talented people in the industry to oversee its growing divisions.  In an effort to rapidly expand its brick-and-mortar retail endeavors, the company has brought hobby retail store veteran Marcus King on board to chart and direct the course for this initiative.

King was a Board Member of the GAMA Retail Division (GRD) for many years. He also served as Vice President of the Game Manufacturers Association (GAMA) Board of Directors, helping to oversee all the activities of that body.  “I will be working with, and in, the newly opened Richmond, Kentucky store,” King explained, “and opening more Troll And Toad Retail and Tournament Centers — first in Kentucky, then across the nation.”

So they hired an expert. Some  companies try to do everything in-house especially when they are not good at it.

I knew a CEO who wanted to write every press release despite being a poor writer. I mean bad grammar, limited vocabulary and shocking spelling. He was smart, but had no talent with words. This industrial company boasted they put 20 press releases out in their best year. They needed to put 2000 releases out and engage with journalists in covering industries. Instead they worried about cost. What did it cost for the CEO to spend two hours on a press release? If he doesn’t add $400+ per hour in value, fire him.

A&R Scandal: Tower Books’ Michael Rakusin Replies

Michael Rakusin, Director of Tower Books replied to Charlie Rimmer‘s letter. I’ve emailed a request to reproduce Michael’s email here, but in the meantime you can read it at Susan Wyndham’s Undercover blog. That way the conversation can allow trackbacks around the blogosphere.

I look forward to watching the fall-out in the industry over this. When a major market player decides to flex their muscle, they should make sure they are a big enough player. I suspect that at a claimed 18% of the Australian book retail market Angus & Robertson will find it is not enough to succeed.

Bunnings on the other hand does have enough market share. But more on that later.

Update Michael Rakusin has granted permission to reproduce his letter below Continue reading A&R Scandal: Tower Books’ Michael Rakusin Replies

Angus & Robertson Scandal: Demands cash from 40% of suppliers

Angus & Robertson letter to unprofitable suppliersAngus & Robertson sent a letter to 40% of their suppliers demanding cash payments and rebates as a condition of continued business. The scandal broke at Susan Wyndham‘s Undercover blog over at the Sydney Morning Herald, firstly in Bookshop chain puts bite on small publishers and then in more detail today A&R Dumps Books.

A friend describes it as “Bookselling, The MBA way”. This is bound to be one of the case studies I’ll use in my MBA.

Here is the text of the letter for the screen readers and the blind:

 

Angus & Robertson

30th July 2007

Michael Rakusin
TOWER BOOKS
Unit 2 / 17 Rodborough Road
Frenches Forrest
NSW 2086

Dear Michael

I am writing to inform you of some of the changes to the way we manage our business.

We have recently completed a piece of work to rank our suppliers in terms of the net profit they generate for our business. We have concluded that we have far too many suppliers, and over 40% of our supplier agreements fall below our requirements in terms of profit earned. At a time when the cost of doing business continues to rise, I’m sure you can understand that this is an unpalatable set of circumstances for us, and as such we have no option but to act quickly to remedy the situation.

Accordingly, we will be rationalising our supplier numbers and setting a minimum earnigs ration of income to trade purchases that we expect to achieve from our suppliers.

I am writing to you because TOWER BOOKS falls into this category of unacceptable profitability.

As a consequence we would invite you to pay the attached invoice by Aug 17th 2007. The payment represents the gap fro your your business, and moves it from an unacceptable level of profitability, to above our minimum threshold.

If we fail to receive your payment by this time we will have no option but to remove you from our list of authorised suppliers, and you will be unable to complete any further transactions with us until such time as the payment is made.

I have also attached a proforma for you to complete wand return to me, with your proposed terms of trade for our financial year commencing Sept 1st 2007. We have the following expectations:

  • All agreements contain a standard rebate, a growth rebate and a minimum co-op commitment to enable participation in our marketing activity.

  • Growth rebates activate as soon as our purchases with you increase by $1 on the previous year.

  • All rebates are paid quarterly for the previous quarter’s performance, you must make sure that your remittance, with calculations, is received by us by the 7th of the month following the preceding quarter. Any remittances not received by this date will attract a daily 5% interest charge.

I am also including a copy of our ratecard, and our marketing calendar, to enable you to begin planning your promotional participation now.

If you would like to discuss this with me in more detail, I am delighted to confirm an appointment with you at 1.00pm on Friday 17th August for 10 minutes at my offices at 379 Collins St, Melbourne.

Best Regards

[signed]

Charlie Rimmer
ARW Group Commercial Manager

Enc: A&R Ratecard
A&R Marketing calendar
Trading Terms Proforma
Invoice

Would you like fries with that?

On of my favourite quotes is  “would you like fries with that?

It is the best-known, English-language suggestion sell. And it works. Every business can up-sell something to a customer who has their wallet open.  It’s just a matter of getting creative enough on your product or service offering.

I tend to favour the suggestion sell cost less than the original item. In the same way that the fries cost less than the hamburger. IT and consumer electronics retailers can sell extended warranties, consumables and accessories. Consultants can up-sell research seminars, subscriptions and evaluations.

This is different from promoting a special, time-limited extra as a call to action. The customer has already made a decision to purchase your product. The cost of acquiring the additional order is zero. It will never be cheaper to offer that customer another product. Seize the day.

If you’ve got a product or service that you can’t find a suggestion sell for, leave a comment and we’ll come up with a few ideas for you.

Now would you like to super-size your meal for only $1?

Deal with the Micro Manager

Over the Shoulder, micromanager wayA former CEO of mine was a micromanager. I knew this before I took the job as the company was a client for a couple of years. Socially, I like my boss and we’ve know each other for many years. I’d even call us friends.

Given my interest in entrepreneurship, I have strong feelings against micromanaging. Fool that I am I thought there was no way he’d try to micromanage me. Surely I was immune. Ha!

So I chaffed at the bit — I’d left lucrative contracts before when a client attempted such behaviour. I got stellar results: sales were up, gross margin was up, profit was up, costs were lower. I should have got all the freedom to run my division as I pleased.

But my boss comes from a retail background. I think retailers especially like to run things by the book. They love an operations manual which clearly spells out the detail of every step from opening in the morning to closing at night.

I then realised that it wasn’t his problem, it was mine. I try to deal with what is rather than what should be. Once I accept the reality I can start doing something about it.

Then I accepted I’m never going to change my boss. As a matter of fact until we worked together I liked spending time together. So how will I deal with this?

Understand the boss’s priorities. What are the top 5, 3 and 1 items for me to focus on? Reconfirm regularly to ensure they haven’t changed.

Use my communications skills. I am an excellent communicator. Start tracking the list of assigned tasks, negotiating deadlines that I can meet and renegotiating priorities as they change. This involves instigating planning discussions with my boss and organising my calendar to clearly show available resources.

Commit to frequent and regular updates. When I delegate to one of my team, I want to know if the task is on track and I want early warning if it’s leaving the rails. Other than that I don’t need the detail. The micromanager needs to know every step of every task. This means anticipating update requests but at the same time scheduling time in advance for progress briefings.

Document agreements. Followup verbal briefings, requests and agreements with an email to avoid confusion.

Micromanagers fear disorganisation and idleness. The best way to contain their excesses is to be organised. That’s tough as I am not a naturally organised person, but if I want the freedom to run my division I’ll need to meet the boss’s expectations. That’s what he pays me for.

Retail KPI’s – the germination

Price Tag by Sarah Williams Brisbane, QLD, Australia via http://www.sxc.hu/photo/480217I’m developing a series of KPI’s for a retail operation. They own nine garden shed outlets and don’t currently track anything. It’s late and I’ve got a pile of notes, but I’ll document the process here.

One of the key elements is avoid collecting useless data, and reward the collection of useful data that reinforces the corporate values, empowers the store managers and is an aid profitability through performance measurement.

Obviously the store managers are going to have a say in the KPI.