How an Electronics Wholesaler Saved £250,000 a Year by Fixing a Hidden Profit Leak
John owned a £25 million UK-based electronics wholesaler. He had built a successful business over the years, supplying major retailers like Argos, Staples, and Currys.
Everything about the business was good – except the one recurring problem—sales returns.
Every year, millions of pounds worth of product was returned from these big-name retailers, and the company had a process to handle it. But, unbeknownst to John, this process was draining the business of over £250,000 annually.
The Problem: A Hidden Drain on Profits
Here’s how the process worked: All returned product was sent back to China for repairs.
The repairs took anywhere from 6 to 12 months, with expensive shipping costs and, by the time the products were returned, they were often discontinued, The electronics market moves on very fast…. meaning the returned products now had to be sold at a huge loss.
What no one realised was that this process was quietly draining the business of over £250,000 every year.
What no-one had done was to stop to question whether there was a better way to handle the problem. And over time, it became a massive burden on the business—financially, logistically, and emotionally.
The Solution: A Fresh Perspective
This is where a fresh perspective came into play. Instead of simply continuing with the “old” process, we recommended a bold shift: repair certain products locally in the UK and sell off the rest in bulk for £1 each.
This decision was a game-changer…….
By working with local repair companies, the business could reduce turnaround time from 6-12 months to just 1 month. This meant the products could be re-sold whilst the product was still current. The shipping costs also disappeared as the products no longer were shipped to China.
And by only repairing specific products, they could eliminate a huge chunk of unnecessary repair costs.
The Results: More Profit, More Cash
Within a few months, the results were a game changer!
By changing just one process, the business saved £250,000 every single year. That money didn’t disappear into a black hole—it was now available to reinvest into marketing, product development, and growth.
The logistics team also became much more efficient, with fewer delays and less wasted time.
With fewer bottlenecks and a leaner process, everyone in the company was able to focus on what truly mattered, without being weighed down by inefficiencies.
A Simple 3-Step Plan to Save Your Business
So, how can you apply this approach to your own business?
- Identify Your Biggest Cost Leak – Take a close look at your processes. Where are you losing money? Is it in inventory, shipping, or something else?
- Think Outside the Box – Don’t be afraid to challenge the status quo. Ask yourself, “Is there a simpler, more cost-effective solution that I haven’t explored yet?”
- Take Action – Don’t let inefficiencies fester. Start small, make one change, and measure the results. Refine and keep moving forward.
Imagine the Possibilities
Now, imagine where you could be a year from now if you started making these changes today.
Picture having more cash in the bank, fewer headaches, and a leaner, more profitable business. By thinking differently and acting decisively, you could completely transform your company’s financial future.
If you’re ready to stop letting inefficiencies drain your profits and start building a more profitable, stress-free business, now is the time to act.
Don’t wait—make the change today and watch your business grow
If you’d like to chat through a business problem that’s causing you sleepless night the get in touch, send an email to [email protected] or call us on 0161 410 0020.
