In this case study, you will discover how Optiply’s data-driven purchasing solution helped make a deep and wide assortment profitable. Read on and learn how smart purchasing decisions ensure efficient inventory management, time savings and sustainable growth. 

Bart Bouter, CEO of Knivesandtools, shares his insights on the challenges and solutions within their purchasing process. With years of experience in e-commerce, he knows better than anyone how important a strategic and data-driven approach is for successful inventory optimization.

‍

For lovers of quality knives

Bart Bouter introduces Knivesandtools: “Knivesandtools started in 1999 as a purely online player that focuses on enthusiasts of quality knives.” Since its inception, Knivesandtools has grown from a small webshop started in an attic room to an internationally operating name in the knife market.

‍

Scaling up to be able to hold a wide range of stock

Almost every knife brand is for sale at Knivesandtools. Bart explains that scaling up was necessary to justify the deep and specialist range. “Only by scaling up and expanding the business activities across the borders was it possible for us to make a specialist range profitable.”

The necessity of a large stock with specialist products, different brands and suppliers made it difficult for Knivesandtools to control their stock. “The purchasing process was quite complex. Because we only had static data available, we could not see which products were doing well and had the most impact on our revenue.” In addition, Knivesandtools' systems were not prepared for the steady growth of their webshop.

‍

No wholesaler, but an e-commerce business

Bart explains how their back-end was set up. “When Frans Wiersma started Knivesandtools in the late nineties, he had to build and design all systems himself, from his attic.

Ultimately, we decided to completely replace that self-built backend, because we no longer wanted to be dependent on a central system. Our goal was to find expertise partners - point solutions - to join forces. We also started looking at a purchasing tool to improve our stock management and make the purchasing process less time-consuming.”

Bart continues: “Frustratingly enough, everyone saw Knivesandtools as a wholesaler and started talking about min/max stock levels. Well, that is just not how you work in ecommerce and certainly not if you want to optimise your stock.”

In the end, they found in Optiply a flexible partner who approached Knivesandtools as an e-commerce business and who gladly accepted the challenging combination of a wide range and a large supplier base.

Smarter inventory management with categorization

For an e-commerce company with an extensive long-tail range, it is a challenge to determine the right inventory levels. Bart explains: “Within our stock, we also have products that sell sporadically. Especially for those products, it's important to know what we need to have in stock.”

Since Knivesandtools has used Optiply as a purchasing system, inventory has not fallen, but more balance has been created within the inventory. The ABC analysis that Optiply uses to divide the inventory into A, B and C categories looks like this for Knivesandtools: “We mainly invested in our important A category and reduced the inventory of the less impactful B and C categories.”

Thanks to Optiply's dynamic purchasing agenda, the buyers of Knivesandtools have saved a lot of time.

Bart explains: “Optiply describes it as autopilot purchasing, but don't think you're making that obsolete as a buyer. Above all, it means that, as a buyer, you can order reliable products almost blindly and spend more time on exceptions, new products and contact with suppliers.”

By adding a smart system like Optiply, Knivesandtools has been able to take big steps.

‍

Knivesandtools is ready for sustainable growth

Bart explains the forward leaps that have been made in the last years. “What we see now is that the most important products are much better in stock. In this way, we can also deal with problems within our supply chain. In addition, the purchasing tasks are now transferable.”

He states that taking permanent employees' vacations or onboarding new employees has improved a lot. And, lastly, working with data provides more insight into seasonal patterns and supplier performance.

The insight that Knivesandtools has received into their supply chain is a big step forward, but that is not the only positive effect that helps the webshop to continue to grow.

‍

Purchasing optimization is getting better every day

Because Optiply's system works on the basis of AI, it learns automatically and the data gets better every day. This allows Knivesandtools to further grow the range, focus on its own labels and intensify cooperation with suppliers.

With Optiply, Knivesandtools has not only optimized its inventory management, but also laid a solid foundation for further growth. By continuously learning from data and AI, the company continues to refine its product range, purchase efficiently and be ready for the future.

‍

3 threats to purchasing Knivesandtools

1. No insight into products with the highest margin
2. Limited data available
3. Time-consuming purchasing process and work not transferable

‍

3 results of the cooperation with Optiply

1. Better contact with suppliers
2. More time for own brands
3. Expanding the product range

‍

Service level increased

Since partnering with Optiply, inventory has increased by 67% to ensure product availability. Inventory has increased in the A category, which shows that they have more products with a major impact on the gross margin. At the same time, they have fewer products in the B and C categories. Inventory is more balanced, service levels have increased by 30% and no sales fell by 63%.

‍

Favorite Optiply features

‍

Multi-supplier function

Having the flexibility to switch between suppliers makes you less dependent on a single supplier and you can better absorb changes in the supply chain.

‍

Dynamic purchasing agenda

For Knivesandtools, setting back orders and no sales is very important to also meet customer demand for longtail products.