6. (Ex 8) Extract from CPT Marketing Module of WWL Staff Intranet Flashcards
Why does WWL retail not sell directly to homeowners?
Because of the considerable cost and after-sales services required to manage this part of the value chain
Is WWL interested in online retailing?
They have no plans to develop digital retailing
Despite the accelerated move towards online shopping seen in the UK since 2020
Why does WWL have no interest in moving into digital sales?
As they feel online sales are unsuitable for carpet retailing, as home owners generally prefer to go to a store to see, feel and possible walk one a sample of carpet
They also like to discuss the purchase with a retailer before buying it
What % of WWL’s revenue comes from retail revenue? And who is this sold to?
Retail makes up approx 60% of total annual revenue
(Note: UK carpet market is 48% retail)
Sales are made to network of retailers
In terms of in-store presence, what is WWL’s aim for their ongoing business development?
Aiming to increase depth and breadth of in-store presence
Objective: ensure every retailer used is provided with samples of each element of WWL’s product range
Does WWL fit the carpets it sells to retail clients and why?
No, as the carpet retailers WWL sells to offers this service to their customers
What are the credit terms offered to retail clients?
40-60 days credit
But some take longer to pay on occasion
What % does commercial work typically make up for WWL?
15% of WWL revenue
Note: UK carpet market is 40% commercial sales
Does WWL fit carpets it sells to commercial customers?
WWL isn’t usually involved in fitting the carpets supplied as commercial clients organise this themselves
What does WWL need to do to win commercial clients?
They need to be very competitive on price offered per m2
- means generally lower margin than retail sales
However, it is high-volume which makes it attractive in terms of production efficiencies
What produces higher margins - retail or commercial sales and why?
Retail sales earn higher margins
As for commercial sales, WWL has to be highly competitive on price
Despite the lower margins, why is commercial sales an attractive margin?
It is a high-volume sale, so it is attractive in terms of production efficiencies
Each commercial order also involves the delivery of a large quantity of carpet to a single location, so transport costs are lower per order
What terms of credit are offered to commercial clients?
60 - 90 days
What is the credit terms for retail and commercial customers?
Retai: 40-60 days, but on occasion some take longer
Commercial: 60-90 days, depending on the order size
Why is commercial work difficult for WWL specifically to win? But how have they overcome this?
WWL is smaller than some of its rivals
There are some specialist companies that tend to be the first choice for such work
However, they do have good reputation for quality, reliability of supply and service
Also invested in sophisticated logistics and warehouse processes that allow WWL to tender at comparable price for commercial work and offer additional benefits (e.g. off-site storage & on time delivery)
So usually when they get the opp to tender for commercial contract, it is usually successful
How successful is WWL at tendering for commercial contracts?
usually when they get the opp to tender for commercial contract, it is usually successful
As they have a good reputation for quality, reliability of supply and service
Also invested in sophisticated logistics and warehouse processes that allow WWL to tender at comparable price for commercial work and offer additional benefits (e.g. off-site storage & on time delivery)
Why is bespoke design often very lucrative
Involves client and WWL design team working together to produce unique designs which are then manufactured, supplied and fitted by WWL
Often for wealthy indivs/ businesses that serve wealthy clients
Using figures, demonstrate how lucrative bespoke design is for WWL
Bespoke work makes up 25% of revenue
But contributes 40% of gross profit
Also gives WWL access to the premium end of the market
Why must the service be good for bespoke?
As it provides access to the premium end of the market
Critical that client expectations are met as wining these types of contracts relies heavily on reputation and word of mouth
What is the credit terms for bespoke designs?
Credit period offered can vary widely
Usually linked to the completion of the contract, which can place liquidity pressure if contracts are delayed
How big are bespoke orders usually?
Can vary considerably in size
Most place orders around £50k, usually completed within 2-4 months
Orders £100-200k are considered to be medium sized (3-6m)
2 largest bespoke design clients use WWL on an annual basis - each typically placing orders of around £250k (5-12m)
Describe the 2 largest bespoke design clients
Use WWL on an annual basis, typically completing orders of £250k
5-12m to complete
Provide regular level of repeat business, though no on-going contract with them
Orders rarely take longer than 12m to complete
No orders have extended beyond 18 months
Summarise bespoke orders in terms of large orders
Order size
Average revenue per order
Number of orders
Typical completion period (months)
Order size : large
Average revenue per order : £250k
Number of orders: 2
Typical completion period (months) : 5-12
Summarise the bespoke design orders that are medium sized in terms of
Order size
Average revenue per order
Number of orders
Typical completion period (months)
Order size : medium
Average revenue per order : £150k
Number of orders: 14 orders/yr
Typical completion period (months): 3-6m
Summarise the bespoke design orders that are small in terms of:
Order size
Average revenue per order
Number of orders
Typical completion period (months)
Order size: small
Average revenue per order: £50k
Number of orders: 35
Typical completion period (months): 2-4m
How often are bespoke design orders from repeat customers?
Approx 50% of the time
But they rarely place an order more than once per year
