Too Many SKU's? - Need Help

Sal Glesser

Sal Glesser

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Joined
Dec 27, 1998
Messages
11,619
Spyderco has a problem. I would like to solicit your opinions as to possible solutions.

We have been told often recently that we have too many SKU's. With almost 70 models and 2 to 4 variations of each model, a variety of difficulties arise that let us know we must make a "change" in direction.

Spyderco distributors (domestic and international) are required to carry full line Spyderco or their dealers and our ultimate customer, the ELU will not have a particular model avaliable.

With more than 200 SKU's, it is unrealistic to expect all of our distributors and star dealers to maintain such a huge inventory. It is also unrealistic for Spyderco to maintain such a large inventory.

On the other hand, we feel their are also reasons to maintain at least minimal production on many of the models so future ELU may enjoy them (not possible if production is stopped). The designers get to continue the rewards associated with having one of their designs in production. Collectors get to add to their collections. (what good is a collection if you only get to add something every 3 years?). And the makers (small groups of highly skilled craftsmen) get to continue making the high quality Spyderco requires, something they take great pride in doing.

We are open to all suggestions. We would like truth above all else. Thank you.
sal


 
Sal,

If you reduce the product line, I don't care. It won't bother my at all. Just be sure to keep all the knives and variations that I like. Therein lies the problem.

In the Door Hardware industry very few distrubutors actually stock (in their own warehouse) the complete line of any manufacturer. And there are many different manufacturers. The few that stock a complete line of a particular manufacturer advertise as such. They also market to a particular group of ELU's. Home Depot has common items on shelves but you can fairly easily order special items. Same with most book stores. Can storefronts "stock" the complete line the same way? Put what they feel the customers in that area want and offer to order the special items? Would a reward system help move product? For a certain amount of knives special ordered, the salesman (clerk) gets a choice of a free knife from Spyderco. That clerk would probably carry that knife at work and home. If the store sells a certain amount of a specific knife they would be required to actually stock it. This might make it harder to "work" the system. Although it probably wouldn't make a difference. If a knife was moving fast enough to get the clerk some freebies, the owner would probably see a value in making it a normally stocked option.

This got long fast. I will have to move to email.

Danny
 
Sal

I think that I would first cut back on the variations then discontinue or scale down production on the units that are not doing that well or that have been around for a while.
I would then offer dealers and distributors
incentives to liquidate some stock.
I hope that this helps. It is not much but it may be a start

Bobby

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Sal, Sounds like a Spyderco Custom Shop, mentioned in other threads might help out here. Have SKU's for the basic models and variations can be made in the Custom Shop. Maybe try eliminating some SKU's and I am sure ELU's from the Forum will be very vocal if it is one that should not eliminated. I am guessing that most of your business is in basic models such as the Delica and Endura. These were my first Spydercos. These should always remain in inventory. The Custom shop can make fixed-number runs on the more interesting models. What do you think?
smile.gif
 
Sal,

From my knothole it appears that your products have started to stratify. For example you have a solid line of low priced zytel one-handers on one hand, and the upscale collaborations on the other hand. I do not favor any reduction in models or variables within a model.

I know you already tried using a different trade name with the kitchen line and it didn't take but perhaps it's time to re-examine the issue. You also handle the Moki line. I favor continued diversity but if you were to develop clear lines, your distributors or dealers could opt to carry one, two or all. A proposed example is your low end knives...call them Spyderco Classics and catalog them seperately from the other lines. The high end could be Spyderco Signature Series, proprietary inhouse designs with exotic material could be your Spyderco Exotic Series. I think you get my drift. The bottom line is you'd allow your retailers to be full or partial line dealers. The Signature Series could be one set up for tighter, exclusive distribution. Just a thought.....

I also favor the notion of a custom shop for variables within a model offering. This would preclude distributor and dealer stocking, your having to project quantities to be made, etc. Have special stuff ranging from colors to engraving to reverse clip mounting, etc. a demand driven only deal for we ELUs to work out at the source.

------------------
-=[Bob]=-

I did NOT escape from the institution! They gave me a day pass!



[This message has been edited by bald1 (edited 13 February 1999).]
 
It would be impossible for someone who is not
directly affected in the pocketbook by
the changes you propose to suggest the canning of a particular model based on personal preferences.I would poll the major
dealers and distributors to find out what
lays on the shelf.I am sure they would be glad to tell which models they would just as soon not carry.Send out a questioner,tally the votes,cut out the dead wood.I have been
amazed at the number of models Spyderco
produces and have wondered how you do it.It
makes my head hurt thinking about it.
 
Sal:

First off, I'm a teacher, which means that I don't know anything about business (and I'm proud of it!).

Having said this, I observe that there are two distinct distribution channels: retail stores and on-line stores. What if you treat them separately, using the on-line stores for exotic variations and the retail stores for basic models?

Well, I tried. Now, ignore the ignorant.
smile.gif


sjc
 
Sal,

I know this doesn't sound like a viable business solution, but I feel that Spyderco tends to get ahead of itself, and may need to slow down. What I mean, is that new models are developed and announced (maybe even advertised)at a rapid rate. Then comes the availability factor. Model "567" may be announced before anyone has had a chance to obtain models 560 through 566, which are not yet available. I'll give you a personal example: I have been waiting for the Bob Lum model, but I have seen an ad depicting the new Terzuola model. I am now more interested in the latter. If the Lum model had been available sooner, I would have already purchased it, and would more than likely, obtained both. Also, some models are so similar that it may not be worth producing both. I greatly appreciate Spyderco quality and innovation. I have lost count of the Clipits I own. Spyderco should keep up the good work, but set a more realistic pace for itself.
 
I'm pretty tired(literally) right now and tried to absorb all the great suggestions above but it's all getting kinda blurry. I apologize if this has been suggested already. How about rotating a variation every season or year, and based on it's success decide whether or not to cycle it around later? or something like that. If tooling costs are too much, maybe there's an equal quality alternative method?

Is it just me or has there been a population boom at all the forums here lately? There's just too many great posts to read and so little time.

Thanks,
Ken
 
Sal,

Thanks for doing this thread. I don't have any great suggestions being new to the "cutting edge". But, I think a custom (more like a limited alterations) shop would be nice and. perhaps, a way to handle special requests by those willing to pay for it for alterations to the basic design, hand colors, clips, tip up/down, blade coating, etc.

I would think there would be a clientele for an alterations shop. It would allow the "ELU" with modest means to have somewhat of a custom knife but not a true custom with the associated (high) cost. But, then again, not knowing the industry, there cost of altering may put the knife right up there with a custom model.

I would also think patterns may emerge from customers' requests. These can help you shape future production.

Anyway, any company that produces a nice knife, 3 1/2" - 4" drop point, with a reliable lock, good handle ergonomics and denim blue scales with matching clip has got my business. I'll take several of those and keep my own SKU's.

sing
 
In my capacity as an ELU -

This is the crowd that's asking for . . .

The things that are hollow ground with a swedge, in flat grind without a swedge.

The things that are black, in some other shades.

The things that are small, larger.

The things that are large, smaller.

The things that are only combo-edged, plain.

The things that are this way, that way.

And you're asking us what SKU's to eliminate?

In may capacity as an Internet dealer -

I spent much of yesterday, and I'm returning to the battle today, taking inventory (5 weeks late) on my closet full of knives. Amazing, how it adds up. One of this, two of that, six of the other thing, and that's a fairly huge investment in Spyderco hardware, when some SKU's may not move for months, but whatever I don't have will be what a customer wants yesterday, and sometimes there's something I can't get enough of. There are a whole lot of variations on a common theme there.

I suspect the customer might expect to pay a lower markup in return for waiting days or weeks for things that aren't in stock.

But I'm not a genius with a solution.

------------------
- JKM
www.chaicutlery.com
 
Another thought - for every one of us hard-core knife people who lust for the Spyderco-Lum, or want such and such a variation of the Calypso that Spyderco doesn't make (yet), or who will argue passionately over the relative merits of a Spyderco Military versus a Benchmade AFCK, how many people are there out there who think that a Delica is an exotic and expensive knife? And don't know how to close it?

------------------
- JKM
www.chaicutlery.com
 
Thanx much forumites, lot of good input so far. James, I see you understand the inventory problem.

Re; Delica as an exotic; The Delica is our tool for increaing the marketplace of those that appreciate beter quality, better performing personal knives. We have on many occassions put a Delica into someone's life, that had never considered carrying a knife, and now won't leave home without it.

The Delica is almost cute and does not yell loudly it's awsome potential. We need to teach those uninformed that it is not exotic, and it is very easy to have with you and when you have it with you becomes useful.

Part of the problem with too many SKU's is; Who maintains the inventory?
sal
 
Sal,

I think bald1's suggestion is the best.

A Classics Line

An Exotic Line

A Sigature Line

Then requre that they carry the Classics plus 3 of the Signature line, and 1 of the Exotics.

Offer your own products, as a retailer, or create a retail Spyderco, sell direct.

Why the requirements for carrying everything as a dealer? Why not let demand run the market, if people want it, they will ask for it, and it will get stocked. Or am I missing something o alot of somethings?

Maybe you could go into more detail about the exact problems that too many SKU's produce?

------------------
One may want to keep an Eye out for my review of the Bob Kasper designed, Kevin Gentile modified AFCK and interview of Bob Kasper.

Marion David Poff fka Eye, one can msg me at mdpoff@hotmail.com

Patiently waiting for the Spyderco SpydeRench, Lum Chinese Chopper Folder, Rolling Lock Martial Folder, Shabaria, JD Smith, Merlin 99, and Keating Chinook, heck if it is from Spyderco I'm anxious; REKAT Escalator; Benchmade Mel Pardue with Axis and M2 Axis AFCK.

"The victorious Warrior wins first and then goes to war, while the defeated Warrior goes to war and then seeks to win" Sun-Tzu






















 
Marion - Dealers are not required to carry full line, only distributors. In the case of international distributors; They prefer to have "Exclusive selling rights" in their country. in order to have an "exclusive" for their country, they must carry full line or they cut the line into their country for certain models. In the case of domestic distributors; It shows us whose serious and who is just "cherry picking" the line.

Some of the problems:

Many SKU's means more tooling costs, more advertising costs, more models in inventory, more legal costs for patents (& protection). There are added in costs to creating a new model.

You have brought up some good points that might assist in some type of production rotation based on demand.

Sing - The blue clip and scale has been requested so many times by so many people that R&D is currrenltly working on possible solutions.
sal
 
Can it be true...

Be still my pounding heart.

sing

P.S. The stars must be aligned just so... This post makes me a full fledged "MEMBER!!!!!"

[This message has been edited by sing (edited 14 February 1999).]
 
Sal,
I'm sure this will make me unpopular, but I think some models have to be dropped.
This will make room for the new designs.
The dropped items will then become collectors items. I think this is where Case's niche in the marketplace comes from. I imagine half the Case's sold are never sharpened, let alone used and the owners pray that they are discontinued.
Drop variations, but give warning, for example announce that no more plain edged Enduras will be made after June 15. People who want one but have been putting it off will go buy one as well as the people who think it will become a collector's item.
Lastly,
(boy, I bet your sorry you asked for my opinion)
I would assume that some models only sell well with a certain edge type. So, drop the other types. I personally don't like serrations, but I can live with a combo edge. This might be a good middle of the road first approach for new models.
Sorry for rambling.
I would give you more advice but I have to
call Enzo Ferrari and tell him how to build sports cars
smile.gif

An embarassed
Doc


 
And that was my first post as a full-fledged member.
Good God, what have I become ?
Still embarassed
Doc
 
I would suggest that you make the tough decision to look at what models have been out for a while and are not selling well and just discontinue them until your SKU's are at a mangeable number. There are always going to be people who miss a particular model, but as long as you continue to turn out new and innovative knives, they will get over it.
For example, Benchmade seems to discontinue knives fairly regularly. I occasionally see posts lamenting the loss of the Monarch, Panther, and Leopard. But whenever they come out with a new model, people get excited over the new ones and the old models aren't missed so much.

Alan
 
Sal, this is a tough one. The problem is that the slow sellers are usually the more expensive and special folders many of us want. On the other side the cheaper more available knives get the name out into the general public.

What I would do, would be to reduce the more conservative knives that come in different sizes to one std. size. For example: The Rescue and Rescue Jr.. There is only a 1/2 inch difference between the two. Get rid of one. Same with the stainless version. Do you really need a Rookie with the endura and delica's out there. Do you need a Worker with the endura and delica covering that range. Do you need the pegasus and copilot when you have the navigator. Do you need the standard when you have the endura. LadybugII, out. Remote release and snap it? one to go.

After looking through your catalogue, that was about as much as I could come up with. That was 9 knives you could get rid of and not feel it much. That's the best I could do. Whatever you decide let me know which you will discontinue so I can go buy a few before they are gone.
 
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