Box shifting low margin business model is not the way
Wednesday, 4 July 2012 | Admin
Box shifting culture puts security distributors under pressure
Most traditional distributors within the security industry have been forced to adopt a "box shifting" low margin model for their business over the past 5 years, buyers insist upon 60 days end of month accounts and will only order the cheapest products, as a result they force the distributors hand.
Norbain (which went into administration on 29 June 2012) has been competing in an increasingly difficult market, has posted multi million pound losses for four out of the last five years, adopted the box shifting low margin model which has (in my opinion) resulted in the failure.
When turning over millions of pounds of products at 5% or less margins, it is just a matter of time before customers failing to pay and or product failure issues would result in this type of outcome.
Online Security Products are here for the long term, we did not adopt the box shifting low margin model and as a result we are a debt free company.
Philip Wilkinson, Managing Director of OLSP LIMITED said "When setting up Online Security we looked at the problems being experienced by Norbain and ADI, we could foresee the failure of one or both companies as a direct result of the business models they adopted, so set about working in a different way," he went on to say "we offer professional technical support to our customers and sell quality products at reasonable prices (rather than driving in circles to reach the bottom), as a result, our return rate is minimal, our customer satisfaction level is high and we are a debt free business."