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Mehaz Sharpening Service . Transition to new service and $ave!. Overview. Mehaz currently offers free sharpening service on our implements to consumers Consumer sends in $3.00 per implement to cover service and handling
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Mehaz Sharpening Service Transition to new service and $ave!
Overview • Mehaz currently offers free sharpening service on our implements to consumers • Consumer sends in $3.00 per implement to cover service and handling • Goal of this project is to reduce Spilo’s costs while maintaining the level of service
Current Service • Custom Sharpening by Hand is our current service provider • Consumer sends in $3.00 per implement for service & handling • Custom handles approximately 1,600 nippers and 650 tweezers per month • Charges Spilo: • $1.50 each for service • $1.50 each for postage • $62.50 per month for mailers • Spilo provides supplies at no charge, totaling approximately $2,000 annually • Includes price cards, preprinted labels, springs, caps, etc.
2011 Cost Recap • Total cost for 2011=$30,296 • Implement Sharpening= $13,374 • Mailers= $768 • Postage= $13,374 • Supplies= $2,780 • Total number of implements serviced= 8,916 • Average cost per implement= $3.40 each
Alternate Supplier – Clipper Shack • Clipper Shack has agreed to the following: • Service implements at no additional charge to Spilo • Will perform the work for the $3.00 received from consumer • Spilo will continue to provide supplies • Spilo will reimburse for actual postage • Cost per implement would be reduced from $3.40 each to $2.33 each • Approximate annual savings= $9,540.12 * Assumes average postage of $2.00 per implement and 10% increase in cost of supplies
Next Steps • Obtain signed agreement with Clipper Shack by 10/15/12 • Advise Custom Sharpening by Hand in writing by 12/1/12 that we are changing services and request that he continue to service implements through 1/31/13 • Update all materials with new address information and begin using by 11/1/12 • Utilize Facebook, website, customer service and other appropriate means to get the new address out to consumers • Provide a notice to be included in returned implements with new service center address and new mailing labels effective • Update address information in Catalog One-2013 • Complete transition as of 2/1/12 • Request Custom Sharpening to forward implements to new service center after this date • Spilo to pay forwarding postage
