Managing inventory: How one business grew its revenue by 300%
3 minutes read
Suleyman Odemis built his company The Tile Shoppe on a “no returns-no refunds” business model.
Today, the tile retailer sells his products for up to 50% less than his competitors, a cost advantage that has helped his firm achieve strong growth since its founding in 2007.
“With the right strategy, you can generate profits even in a tough economy,” says Odemis, who travels extensively on buying trips in China, Europe and India to stock his six stores.
Headquartered in Vaughan, Ontario, The Tile Shoppe now has four Ontario stores in Concord, Scarborough, Mississauga and Toronto, and also expanded its operations to Calgary and Edmonton. The company has been ranked as one of Canada’s top emerging growth companies by Profit magazine.
“It’s not my style to sit on my laurels,” says Odemis, a native of Turkey who immigrated to Canada in 1998. “I knew very little about business when I got started but I had the drive.”
He first set up a school in Toronto specialized in tourism and international travel. But a chance meeting with some people in the marble and tile business led him to focus his efforts on a new venture.
“I got to know more about the tile business and learned that managing inventory was a big obstacle for entrepreneurs,” he says. “It was easy to accumulate a lot of inventory debt. That’s when I came up with the idea of selling tile to customers for close to the cost, which would help move inventory faster.”
Today, he says his store’s firm policy on refunds is a benefit for both his business and its customers.
“I’m obviously saving on the costs of returns. My customers also save considerably and they become smarter shoppers. My policy encourages them to be more selective and measure properly before they buy. They know that when they leave the store, they can’t bring the product back.”
To boost sales, Odemis ensures his employees are well-trained in the tile business and earn above-average sales commissions.
Knowing how to grow
Still, it hasn’t always been easy to retain employees. When faced with high turnover a couple of years ago, Odemis decided to seek the help of an external human resources company to screen candidates. “We’re now getting people who really fit our profile and turnover is definitely down.”
Investing in his business has also worked in his favour. For example, his company purchased a new computer system to track and monitor inventory. “We now have a highly accurate portrait of our inventory with customized reports and rankings of product popularity. That investment was critical to our company’s performance,” he says.
Odemis also attributes The Tile Shoppe’s success to seeking outside help when faced with growing pains. “Frankly, it’s easy to put your company on the map with more stores, but I didn’t really know how to grow,” says Odemis who sought the expertise of BDC to help him grow.
The consultants worked with him to first do growth potential assessments and prepare a formal strategic plan. “Getting that fresh perspective on my business was invaluable. I really have a better sense of where we’re going now.”
- Find a business model that adds high value for your customers and delivers significant margins.
- Retain the loyalty of your sales team with attractive incentives.
- Consult human resources experts to help you hire people with the right profile.
- Invest in information and communications technologies to help your company improve its performance.
- Hire a consultant to assess your company’s growth potential and develop a strategic plan.