CASE STUDY: A 5% margin increase for Bonus Electrical!

Kerridge Commercial Systems’ K8 software has delivered cost and time savings across every area business for wholesaler, Bonus Electrical. A key element of the software is its ability to provide the business intelligence that the management team needed, enabling them to analyse sales in more depth…

Bonus Electrical is the wholesaling division of the East Yorkshire-based, family owned, Bonus Electrical group. Established nearly 60 years ago, the group also owns an electrical retail superstore, a solar P.V. distribution company, and supplies electrical kits to caravan and mobile home manufacturers. Bonus Electrical is the largest independent wholesaler in Hull and a key supplier to local health authorities, councils, schools, colleges, contractors and industry.

Company spokesperson, Carl Dearing, said: “Unlike national wholesaling groups, who have very strict rules, Bonus is extremely flexible. Where local competitors may have one or two vehicles and offer a next day delivery service, we offer a shuttle service using a large fleet of vans. If we have what customers want in stock, the average delivery time is 90 minutes.”

Bonus also offers its major customers a free call out service during evenings and weekends, the facility for stock holding, and warehousing for a council home maintenance company – with whom they have just renewed a three-year supply contract.

In 2013 the Bonus management team was tasked with doubling the turnover in two years. At the time they were using “an antiquated, character based system that was always crashing” and, al­though the old system could not produce the reports they needed, a change of system was considered “too disruptive”. But when it became clear that the old system was collapsing, the search for a new solution began.

‘Distraction of change’

As a member of the ANEW buying group, the Bonus team asked other members for suggestions. They discovered, however, that many others companies were also using quite old systems and had the same anxieties about the distraction of change. Then the manager of a local builders’ merchant suggested looking at their K8 system.

The brief Bonus eventually gave to Kerridge Commercial Systems (KCS), the company that develops K8, and two other software providers, was for a system that would give the company all the business intelligence they needed in a format that was usable and accurate. Staff should also be able to use the system competently as soon as it went live.

Said Carl: “We ultimately chose K8 because of the attitude of the KCS salesperson. He really listened to all our concerns and we felt he genuinely understood them. The fact KCS had implemented systems for other electrical wholesalers, whereas the other providers hadn’t, also gave us comfort.

“The frustrations we expected when the system went live never happened. There was some fire fighting during the first six months over printer interfaces and a snagging list that we worked through at our weekly meetings with KCS, but we never stopped trading or lost any business.”

Being able to send out invoices by email delivered the first immediate cost and time saving benefits. And, on the trade counter, staff were now able to access accurate pricing which speeded up service straight away. The internal sales team was also able to access the customer history they needed more quickly and easily.


Bonus’s Jamie Dawson, said: “The integrated POD system is invaluable and helps us deal with queries quickly and more efficiently. Some of our local authority customers ask for a lot of PODs and I often used to spend half a day wading through files and scanning paper copies before emailing 20 or 30 of these. Now, I just retrieve them from the system by entering the order numbers and I can email out the same number in around 10 minutes. The time this has saved us is incredible.”

K8 allowed the Bonus team to set minimum and maximum purchasing levels for the first time. “This means we’re no longer over-ordering stock and less likely to have to pay carriage charges on orders when we’re caught without standard stock on the shelf,” said Jamie.

The system also started delivering the business intelligence that the management team so desperately needed and enabled them to start analysing sales in more depth.

Jamie said: “Now, at any time during the month, we can look at what a customer has spent over the last month, week or day. We can break it down into product category and can spot patterns and trends that create questions for the sales team to answer.

“For example whereas before they might have been satisfied with a lowish margin on the turnover created by a £50k a month customer, they can now analyse the individual items bought to see which are most profitable. This has ena­bled us to change some customer rebates to exclude certain products and has helped tweak our margin.”

Once a month Jamie provides the management team with a stock figure that would have been impossible to create using the old system.

Interface with Luckins

Bonus has recently upgraded its version of K8 to interface with Luckins. The interface works by Luckins loading their files into an FTP server for K8 to pick up. The Bonus team then imports the file, which updates their entire catalogue and products on stock in around 30 seconds. “Maintaining prices on the old system was a tedious process with every line having to be updated manually,” said Jamie. “And now if we need to bring new products into stock, we just provide the part number – it’s just up to us to add the discount.

“Since implementing the Luckins interface, we’re currently focusing on repairing all the bad data we initially imported and there are tools within K8 that help us do this. To replace an incorrect part number, we simply enter the correct one and the system will find it in Luckins, transfer the new number to all stock in every branch, and update all product locations and related sales and purchase history – including all discounts. It takes around five seconds to do this for each part number. Using our old system this job would have taken me around two years to complete, with K8 I estimate it will take less than three months to update the 50,000 lines on our system.”

The Bonus management team believes K8 has delivered cost and time savings across every area of the business. They are discovering new functionality within the system as each month passes, such as the logical way it manages stock locations and how it stores and automatically updates customer-pricing information.

“Since we’ve implemented the Luckins interface, we’ve seen an overall increase in our margin of 5%,” said Jamie. “Our turnover has grown from £3m to £10m in just six years. K8 is supporting that growth because it’s helping us to buy stock in the right quantities and to analyse our sales activities like never before. Recently, it also helped us quickly pull together the data we needed for a major tender bid which would have been a horrendous job using the old system.”