Are you a fast-growing e-commerce entrepreneur struggling with inventory management? Then the Phone Factory case study is a must-read. 

Bart Latenstein, co-founder and technical manager, founded Phone Factory as a school assignment and built it into a serious e-commerce player. Jan Willem van der Knoop, co-founder and purchasing manager, optimized inventory management together with Optiply to support the rapid growth.

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Meet Phone Factory

Phone Factory sees the light of day when Bart Latenstein has to start a company for his studies. He decides to involve his childhood friend Jan Willem van der Knoop. Together they start trading in phone cases. What starts via social media and bingo evenings quickly grows into an online shop.

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Every hour paid off

Bart: “From the start in 2014, things went fast. In 2015 I built a website myself, and we handled all orders from Jan Willem's attic room. Paste stamps yourself and then go to the mailbox to mail the orders. It motivated us enormously that every hour we spent on Phone Factory paid off in orders.”

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More professional approach after break

After two years, Bart and Jan Willem take a break to prioritise their studies and full-time jobs. This brought the number of orders per day down by 50%. However, things changed when Jeffrey van Battum joined Bart and Jan Willem at the end of 2017. Bart: “With Jeffrey there, our business approach turned completely.” The three decide to approach the project a lot more professionally.

Bart continues: “We did everything ourselves. Packing orders, customer service, site construction and maintenance. And, of course, the purchasing operations.”

And still the three partners do a lot themselves, but the division is clear. Jan Willem takes care of purchasing, Jeffrey is responsible for marketing, and Bart sits on the technical side and manages the social media.

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Rapid growth and challenges

Finally, the three entrepreneurs decided to quit their full-time jobs. Their full focus goes to Phone Factory. Bart: “And then it went really fast.”

“We really focused on growth. Every euro earned went - and goes - back into the company. In this way, we could expand quickly and hire more staff.”

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Lack of space

Jan Willem jumps in to indicate that challenges also arose with the growth. “We went from a bedroom to an office in a garage box. Our stock grew with the size of the space.

When we moved into a 60 m2 building, picking orders became more difficult. The number of products also grew. Trying to remember where everything was, became harder day by day.”

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Lost the overview

Jan Willem continues: “We worked with Excel sheets. Due to the growing number of SKUs, we lost the overview completely at one point. This resulted in many 'lost sales'. Really annoying if a customer had already ordered a product before we discovered that a product was not in stock.”

“Something we did not find out until after we started with Optiply was the dead stock and excess stock we had. Optiply helped us a lot to make that visible.” By starting with Optiply's smart software, Phone Factory gained a lot more insight into their inventory.

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Phone Factory chooses Optiply

Jan Willem explains that he started looking for a solution for their difficult purchasing process and stock management. “The fact that Optiply was also a start-up company itself at the time convinced us.” Bart adds: "Optiply was really one of the first software we started working with, next to Lightspeed - with which our website runs."

“When we moved to a bigger building, we also started using Picqer as warehouse software. With the arrival of new employees, it was impossible to continue working 'without a system'.”

Jan Willem: “Jeffrey, our third partner, was initially sceptical about Optiply. If you do everything yourself, you often think - only you know best. Until he started checking products himself and saw that everything was suddenly in stock, then he was quickly convinced.” Jan Willem explains that the benefits of purchasing automation are clear to him and his co-owners.

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The benefits of purchasing automation

The men at Phone Factory are not hindered in their working methods by a lack of conviction. Jan Willem: “Our way of working is to just start with things. Often we find out along the way that we need to change something. Of course, we should have started with software much earlier but growth sometimes comes unexpectedly.

Now, I can say that if we had not had Optiply, the purchasing operations would not have been possible in terms of time. In our branch, orders run continuously.” Because of the time Jan Willem saves with Optiply, he can also focus on product management, maintaining the relationship with suppliers and checking product throughput time.

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No more lost-sales

Bart agrees with Jan Willem when it comes to the benefits of purchasing software. “Optiply also helped us enormously with the step abroad. Germany in particular has grown quickly in a short time and Optiply picks up on that. The app sees that we are selling more and need to purchase more to fulfil all customer orders. In fact, we have no more 'lost sales' since we use Optiply.”

Bart also points out another change in their purchasing approach.”We switched from air freight to container freight. This allows us to limit the number of transport flows and purchasing costs. Where once a cargo came in every month. Now, a container arrives every quarter.”

Optiply also helped to map the transport flows and make the use of containers more efficient.

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Foreign focus

With enormous growth over the last years, the question arises: what are the plans for the near future? Jan Willem: “This year we aim to be ahead of the growth and to get the organisation in order.”

Bart adds that there are also plans to expand Phone Factory. “We started in the UK with smartwatch-straps.co.uk. The only point that works against us, for now, is the long delivery time. For example, in Germany we can guarantee a 'next-day-delivery' with orders placed before 13:00, but for the UK the delivery time is still one week.”

“In addition, the goal is to expand to Poland and then move towards the Nordics. We really want to keep expanding with the number of shops in other countries with the same range and domain structure that we have also applied in the Benelux, Germany, France and Spain.”

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Accelerating growth plans

With expansion into new markets such as the UK and Poland, Phone Factory continues to grow. Optiply enables the company to efficiently respond to increasing demand and international inventory challenges.

Through smart purchasing automation, Phone Factory continues to minimize out-of-stocks and accelerate its growth plans. The combination of data and strategy ensures that further international expansion is within reach.

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Less excess stock

Phone Factory's stock level has decreased - by 59% - in the last year. In addition, lost sales have been reduced by 41%.

Jan Willem about Phone Factory's stock management: “When I look at our stock, we always want to stock our A products. We look at the B and C categories together with Meine Brueker, our customer success manager, what the right stock size should be.” Read more about the ABC categorisation.

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Favourite features

Jan Willem: “At Optiply there is always room to provide feedback. I can always ask Meine, our customer success manager, about how we can best use Optiply.”

“I am very happy with the ABC categorisation. It also helps me a lot with training new colleagues because I can show the impact of different products.”

“In addition, we often use the new export function. With a continuous order process and 17,000 SKUs, it is very useful to be able to export product lists.”

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