How can we be so cheap?
One of the first questions we get asked is "How can you sell at those prices?" It’s also where a lot of our competitors start to try and explain away how we do it. Here’s the truth: -
Traditional Model
Most industrial distributors were formed decades, if not centuries, ago and are still set up for that world. This structure means that they cannot be like us without tearing down all they have built and starting again.
So in the price that you have been paying from whoever you buy from now is a contribution to all these costs: -
* Field sales staff (The suited person who comes out to see if you still need the stuff you have been buying for years)
* Customer service people (Someone on the end of the phone who takes your order and enters it into their system)
* Purchasing people (They look at all the orders and place bulk orders onto the manufacturers)
* Warehouse people (They pick the stock from the shelves, pack it wrap it and put it on the van)
* The delivery people (Often their own fleet of vans and drivers)
* The accounts staff (They chase you for money and pay the bills from the manufacturers etc)
* The managers (They are there to make sure everyone is doing their job - often including a sales manager, operations manager or customer service manager, a number of directors and the managing director or chairman)
* Cost of holding the stock (And believe me there is a lot of that)
* Cost of the buildings and the infrastructure
This is just some of the costs that a traditional distributor has and they have to pay for all this. Well actually you do, each product has a profit margin on top and the size of this profit margin is determined partly by what the market will stand but also by the knowledge that they need to pay for all of the above and still make a profit.
Kerboo - The New Model
So how can Kerboo be any different? Well we outsource to leading organisations in their field all our own operational requirements. With this new cost model, we consider that we can change the game.
Here’s how Kerboo does Industrial distribution: -
* No salespeople (We outsource this to PPC advertising and to free word of mouth and support and new product news comes from the manufacturer anyway)
* No telephone salespeople (The website is online 24x7 and was developed in house)
* No purchasing people (The website formats the orders and posts them directly into the systems of our logistics partner)
* No accounts people (You pay by card to make the transaction the cheapest method possible)
* No full time managers (The business is run by experienced people as and when they are needed)
* No stock holding (we use various channels to access product quickly)
* No buildings etc (Kerboo is a 'Virtual business' and that makes it lean and cheap)
So as you can see we have stripped out as much of the cost as we can and we pass those savings directly to you.
The basic philosophy
We have removed all the costs we can and we try to make the remaining costs as transparent as possible, showing the percentage or amount you have to pay for charging your card or shipping and handling. You can at least be sure that you aren’t paying for all the services you don’t use.
That’s it in a nutshell and that’s a promise no-one else can make...
