BOUWMAAT is a large Dutch chain of stores selling construction and DIY related articles.
To be fair, we never really thought about the composition of a product. We know roughly what materials are of importance, but what the impact on a price is, was relatively unknown. I had the intention of getting the team of category managers to a higher level.
At the launch of WTP we immediately hired an intern who started gathering data. Within no time we had broken down the costs of over 100 different products and that’s when the party started. I was curious as to whether a cost price breakdown would unearth anything with a large premium brand supplier like Knauf. After some research within WTP I concluded their margin was extremely high and that we were providing the sales against minimal compensation. This was enough reason for us to find out whether there was opportunity for creating a private label, and there most definitely was! By using insights, provided to us by WTP, we successfully developed a private label that allowed us to make a large margin. Within half a year the margin became over 40%. The profit within this category has now grown by €240.000. Only now do we know, in detail, what we are purchasing, and that insight provides us with a lot of opportunity. Especially concerning the annual price increases. We are prepared.
This story was sent to us by Michiel Mak, Director Pricing & Category Management at Bouwmaat
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