How a back office system helped my business

Founded in 2002, Shropshire-based Stinkyink.com sells original and third party cartridges for every make and model of printer.

Along with 12 staff, John Sollars, the managing director, prides himself on offering his 150,000 customers a choice of 7,000 products - with a 100% satisfaction guarantee.

Stock control challenges

Stinkyink.com has high sales volumes, low margins and is very price-sensitive. Keeping operations efficient and automated is important for the business, because this helps keep prices low.

The company is also facing the challenges of rapid growth. Order levels increased 70% in 2009 and 55% in 2010.  However, until recently, Stinkyink.com’s back office stock control and management systems were run manually.

John explains one of the challenges he faced: “We saw a significant increase in orders being shipped directly from manufacturers. This involved placing an order on the supplier’s website, then re-entering the information on our own system."

"It took a lot of time and was open to errors. I wanted to introduce an automated system to communicate with each supplier.”

Many businesses use an electronic data interchange (EDI) system to exchange information with partners and suppliers. Such systems don’t require any manual intervention.

EDI wasn’t the only requirement; John also recognised that data backup and the customer relationship management (CRM) system – used to help process returns -  needed to be part of the project.

Finding the right back office system

John spoke to his existing software supplier, but it wanted a hefty fee of £22,000 to implement a new back office system.

Seeking an alternative, he evaluated three other providers, finally picking Axis First, because “its software is designed for my type of business, plus it was under budget.”

Stinkyink.com now uses Axis First back office software to automate warehousing, stock control, sales order processing and logistics. The company also set up direct EDI links with all major printer vendors’ networks.

This means the Stinkyink.com team no longer has to contact vendors manually. Instead, the system automatically places orders when necessary.

One particular selling point for John was the real-time stock and price feeds to wholesalers. These allow Stinkyink.com to make live price comparisons and secure the best deals; very important when margins are small.

Back office implementation

The back office system was planned and installed over three months. One challenge was transferring the large quantity of transactions in progress at any one time. As John recalls, “We imported over 500,000 stock transactions but were live and shipping orders the same day.”

There were issues. Some members of staff were resistant to the change, and it took time for them to get used to a new way of working. However, a thorough three-day training schedule plus John’s evangelical enthusiasm for the system helped convert the sceptics.

Operational improvements

The new back office system has made a measurable difference to business performance. “Within a very short time the overall efficiency of the company has increased by over 40%, net profit has grown by 22%, and as our turnover has increased our stock has decreased - for the first time in our history.”

The rate of stock turnover has gone from about 12 times a year with a holding of £135,000, down to £85,000 and over 27 turns each year.

Customer satisfaction has increased too: “50% of our sales are now repeat custom,” says John, “demonstrating that customers are very happy with the service. That’s largely down to on our back office systems.”

The extra cash released into the business has been invested in further IT upgrades. John has developed a website selling spare bulbs for projectors which holds no stock at all, but instead uses EDI to place orders with suppliers when necessary. It’s a virtual extension to Stinkyink.com’s own warehouse which doesn’t require the company to buy in more stock.

John has more plans for the future: “The back office resources and the knowledge my staff have built up gives us a big advantage in new niche areas – all with minimal extra overheads. It’s brilliant!”

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