I just made a post on today's Clearance Thread but figured it would most likely get buried, so thought I'd post to the forums as well. I was a Dick Smith Store Manager (and salesperson prior to that) for several years up to 2013. Experienced first hand the Gaming Sale, the uncertainty regarding the Woolies sell-off and the (mostly unadvertised, but now infamous in relation to the way they cooked the books for the IPO) clearance that Anchorage completed just after they purchased the business (most of these items tended to show up individually on Ozbargain back in the day).
[AMA] I'm an Ex Dick Smith Store Manager - Ask Me Anything
L[Deactivated] on 02/12/2015 - 17:57
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TVs are on par in quality with all other generic brands, the failure rate was pretty low and over the time frame I worked for the business they obviously improved their sourcing/buying, as many of these products (alongside the old DSE or Digitor products) were universally poor quality when I worked for the business between say 2007-2009.
Some aspects of the products were not the best - e.g the remotes always had shocking range, TV tuners were very slow but the panels they used, while one or two generations behind always seemed to be of reasonable quality - there was maybe only one or two models that had poor quality panels (bad colour reproduction) that I came across in the last 2 or 3 years I worked for the business. Non private label generic stuff was shocking - Vivo/Viano stuff that the business sold from around 2009-2011 was utter garbage.
STBs were very reliable (then again almost all STBs on the market that aren't PVRs are generic these days, DVD/BD/Portable DVD players not so much. USB drives were just rebadgings of various other brands (A-Data, Emtec, etc) that were sold alongside the generic products. Cases were also rebadged from other vendors (e.g DS camera cases came in Case Logic boxes from the warehouse).Towards the end of my run with the business all DS branded stuff changed to a in-store replacement warranty - which was an absolute godsend as it made TV replacements so much easier.
Is it good value though? At the right price (Never at RRP!), yes. Especially considering what similar products from Kogan, etc can cost.
As a few people have already said, thank you for taking your time with this post. And thanks even more for having (what seems to be) an objective and open view on it all. Bonus points for an eloquent writing style too ;-)
You're welcome :) It's nice to share my experiences at a time when they'll get decent exposure due to the current clearance and the businesses other woes.
Boochan. This has been one of the most interesting reads and an exception from the normal hot discussion topics that have been bubbling up recently. Kudos to you!
Were you ever mystery shopper and what was your experience? I used to be a contractor to the realise group and personally conducted over 100 mystery shops personally during the woolworths days. At the time, I was amazed at how many stores were in the network.. Two stores in Campbelltown for instance..
I was only mystery shopped four times while Realise did them network wide from 2008-2012. They were literally all over the place - one shopper was way too obvious, another blatantly lied and didn't know what she was doing, and the other two were pretty much spot on. At large I'd say we only disputed maybe one a year. DS dumped Realise and Mystery Shopping altogether for a few reasons… one was the PR/Advertising people were furious when Realise participated in an ACA special involving hidden cameras recording a typical (and of course negative) mystery shopping experience. The others… they slashed staffing levels at all stores, alongside abolishing the training program that the Mystery Shop report was based upon.
Hi OP. In your opinion is it worth dumpster diving at Dick Smith's?
Depends how lazy the staff are at the store you go to. Also depends on the type of store - Standalone stores in my state locked up the lids to their dumpsters - Shopping centre stores generally used the shared dumpsters/compactors.
Standard Operating Procedure for "write offs" (either for warranty purposes, damage, or other reasons) was that we cut the electrical cord, deface the product with a thick black texta, etc. Essentially do everything possible to make it impossible for someone to dumpster dive and try and return the product as "faulty" without a reciept (especially private label products as we did not need a receipt to replace/give credit for faulty private label products) - this was the more important reason then trying to stop people from taking stuff to use themselves. The only stuff I personally never did this to was with bulk obsolete stock we were asked to dispose of on occasion (as mentioned in a prior post - this was mainly old toners, cables, etc) - in which these were put into garbage bags 2 or 3 times over, tied up and binned.
Overall? Probably not. Try bigger, standalone consumer electronics stores.
hi OP,
always asking for better deal from staff, and they look at screen and give a slightly better offer, would like to know will the staff gave a NOT so good offer,
How can we get a better offer from staff?tq
This is a very, very hard question to answer and its incredibly subjective - it depends how hungry for sales the store is (regardless of it been Dick Smith or another Business). If the business already has the best price on the market, they'll generally be well aware of this at the time and won't go much further. If they don't, get them to price match.
Other various things you could try… if you have a lot of different items to purchase try and use that as leverage for further discounts to get them all at the same place. Be nice/friendly - NEVER be aggressive or arrogant as the salesperson would probably rather you leave then to close the sale. Make it as obvious as possible you will go to the competition if they can't meet the price you want - sometimes they'll call your bluff, sometimes they won't (and sometimes they don't care either way).
I'm unsure about how they manage non-clearance discounts at Dick Smith anymore (it literally changed yearly or sometimes even more often during my stint), but the staff might be under major pressure to stick to markdown targets, so even if they are at risk of losing a sale they'll have to let it go based upon how harsh their manager is.
Sorry I can't answer this more thoroughly but it doesn't really have one clear answer as such!
I've actually been curious about this because I've gone to DS a few times recently for price matching and failed almost every time (and I usually have an excellent success rate). There were a few items, like Plantronics Backbeat Headphones / Microsfot Lumia 640 that were legitimately overpriced in DS and that I had proof of price at nearby competitors and they just outright refused to price match (not even price beat). I found it really..odd. A few times I was told that the price I was asking for was "below cost price" but I always thought that was BS.
Very YMMV. Some managers will do anything they can to keep within markdown targets. Others will be more willing to work with you. Their price match policy has a "cost price" clause which is obviously used as a get out of jail free card if the manager isn't interested in selling the item.
Their price match policy has a "cost price" clause which is obviously used as a get out of jail free
Nothing against you OP but it's out and out fraud. Cost price wouldn't even be known by anyone at store level, the true cost price for an item could barely be calculated accurately by the DSE buying team.
From a vendor perspective there are so many moving parts to stocking an item at DSE such as price protections, retailer bonuses, rebates, credits and performance payments.
@ChickenTalon:
Yeah the policy (and this goes for all price matching retailers that have a similar caveat) should define the term cost price as it is defined by the salesperson (even naming in minimum price rather than cost) for it to be less dubious.DS isn't the worst offender here. Lots of Electrical retailers out there that do those "Cost Price + $1" sales which are far more problematic with that particular definition IMO.
How many hours did you work a week?
And how much of this was actual 'work'?
Salaried for 40 hours. Probably worked somewhere between 45-55 hours on average (5 days a week, 9-10hours a day, every 2wks a 12-13 hour day to setup a new promotion/catalogue).
Most of it. Even when the staffing levels were higher, I worked the same amount roughly, but I just got better with my time management as things went on. Salespeople were focused on sales, I processed stock, returns/repairs, merchandising and all the back of office stuff, and sales when it was during peak periods. So yes, most of this was actual work.In bigger stores that were able to retain assistant managers, the Manager did more "managerial" type stuff.
Have you ever judged/laughed at a customer because they way they (1) Looked (2) Spoke (3) Dressed?
Internally I judged customers on a daily basis based on those attributes. You come across fake accents, really inappropriate dress (lots and lots of skin in the summer, sometimes far too much) and a lot of people that just give no (profanity). But really, out loud, or laughed… no. You never know who is going to want a big ticket item.
are the staff on commission? They always try it with the add-on sale, e.g. need an sdcard with that camera?
Most likely they're forced to say it, I know fast food always ask you to upgrade meal.
That's pretty much needed for a camera. A proper add on would be a tripod or bag…
maybe but what ozbargainer doesn't have 500 SDCards in their drawer!?
The type of person who typically goes into DS for a camera is probably a mum and dad type that don't know a great deal about cameras. How the hell does an employee know they're selling to an OZB'er?
@sqeeksqeek: OZB'er spend hours their arguing on price/price matching lol, I think most retail places knows the people who are TA's.
Yes, and that is related plus its just textbook sales - essentially the staff have to meet at least 2 out of 4 KPIs to even earn any commission - Sales/Hr, Profit/Hr, Extended Warranty Percentage, Attachment. "attaching" is what you describe there. In quiet stores essentially you had to get the latter two KPIs because it was near impossible to reach the sales and profit/hr targets set.
I can't remember how much commission they got as the system changed a couple months before I quit.
Hey man :) Thanks for the AMA. It is certainly interesting to hear what you are saying!
Forget the past, so how about now? Clearly Ds sells alot in this past two weeks, but then will they able to buy more new stocks?
Revenue is so small yet store rent and staffs wages are the same.Excluding the $50mil stock write-down, they still seem to be in line to book a profit this FY.
Lots of hearsay on the subject though - clearly this is an exercise to get some cashflow going - but if the store network doesn't get busy for the rest of Christmas… It'll be interesting to see how far they get in 2016. Personally, I think that another company will buy the business next year but again, just opinion.I think I read somewhere that DS usually does over 50% of its sales in the Christmas period, was that right in your day?
It was common Christmas week to do a months worth of sales, and for boxing day to do close to a weeks worth of sales. Not quite 50%, maybe more like 20-30%. They definitely had stores within the network that lose money/barely break even most of the year then get an EBITDA result for December that makes up for the rest of the year.
I think something to consider here is the relationship they might end up having with some suppliers if they sell the stock too cheap. Plus given the very public nature of their troubles, they might not be on such good supplier terms anymore which could results in cashflow issues for the business and perhaps even getting stock to consumers to buy or replaced under warranty.
I can't grammar for shit. Sorry :P
How much were you payed (optional)
What was your pathway to becoming a manager?
The type of pathway that gives middle management a huge hard-on
Casual TM > Full Time TM & Keyholder > Relief Manager > Assistant Manager > Store Manager.
I won't put an exact number on the pay but considering the type of roll it was fantastic - base was okay but the years I managed the bonuses were about 20% of my pay so that was nice.
Do you own shares of DSH now?
No. I really hope the very few remaining staff/colleagues I know still working in the business didn't utilise the employee share purchase plan…
Highly considered it at 28cents this week but ended up been too high risk.
so did the financial problems start when woolies brought back all of the dicksmith stores? many where franchises?
i knew a whole store lol i went in to buy dicksmith brand cb radios this would have been maybe around 2005 and the owner gave them to me for $40 usually $100 because i was always in there talking lol miss those days of bumming around!
Most of the Tandy stores were franchises and bought out around that time frame and slightly earlier (often for a pretty penny - quite a few ex-Tandy franchise owners are semi retired, but were/potentially are still with the business on a casual basis to keep themselves busy) not many of the DSE though. Most of the DSE stores that weren't company owned were "authorised dealers". DS gradually refused to renew their contracts and most of them turned into Jaycar stores instead. Don't think the financial issues are related to that as DS was booking strong profits through to 2008.
Once they started pouring millions of CAPEX in, changing store formats, messing with the existing tri-brand (Tandy/DS/Powerhouse) system and somewhat changing the product mix is when the profit started to take a dive. Sales were up but margins dived, pretty much because so many existing high margin items were pulled out of the stores.
ye right you are! when George couldn't keep his dicksmith he ended up buying a department in Harvey-Norman!
I strongly disagree with this comment, I worked for dickies and then moved to another electronics Retailer but in teh wholesale division. We dealt with a lot of the Ex Dick Smith Franchises.
These guys were absolutely screwed over by woolworths, some of these poor people were at a dick smith conference and told how well it was all going but there Franchise agreements wouldn't be renewed. The drove alot of people to bankruptcy (mainly newer franchises). One i clearly recall was Griffith, he had only had a Franchise two years, branded as dick smith and trading as dick smith. After 2 years woolworths opened a store directly across the road, wouldnt take back over 100K of dick smith branded stock, he lost his franchise joining fee and as you can imagine after two years he hadnt earnt that back yet. Worst was Dick Smith (Woolworths) hired a truck and parked it a door down from his store saying Dick Smith Across the road.
He was a hell of a nice guy and got burnt badly. Mildura was another one…..Fairly poor form as dick smith could see all the sales these guys were doing so of course had teh information to decide which towns were worth putting a store in.
There was some silly decisions at dick smith, i worked at Southland Powerhouse as a department manager. Despite having a powerhouse up stairs at almost 15 times the size they opened another dick smith downstairs on the opposite side. It was quiet mad to be honest.
They did alot wrong, but they also did alot right. Our old staff discount policy of cost +10% was fantastic and angered alt of woolworths staff as they only got 5% off.
Whilst Jeff Grover was the head of Dick Smith the company was in a really good position!
Interesting perspective, I have heard of what you've written about regarding DS Franchises a number of years ago on Whirlpool IIRC, or another forum. My experience comes from first hand working alongside several ex-Tandy franchise owners that were paid handsomely to sell franchises off in key shopping centre locations to DSE, there was several examples, at least where I'm located.
I entered the business a couple months after the old staff discount policy was axed… it was depressing to hear existing staff brag about it.
You're not wrong about property decisions (IIRC Southland had all 3 at one stage… Powerhouse DS and Tandy). That seemed to be something they struggled with for eternity, partially resolved with the semi liquidation that Woolies did before selling to Anchorage, but since then Anchorage has reopened many of the stores in locations where they double up - and are actively pursuing this strategy with the Move brand in larger shopping centres.
Can sales people make a decent amount of money from commission?
At the largest stores, reaching all KPIs… potentially.
I never saw a salesperson commission exceed $500/mth personally, though.All other consumer electronics retailers have a better commission scheme and it was always a big problem retaining quality salespeople as they'd eventually learn they could do the same job with the competition and immediately earn more money even if the base rate was slightly lower.
I am an ex-sale team member 10 years. Tandy and then move to powerhouse. Powerhouse was only at the start with the commission on good Christmas I put in $3,000 commission on a paycheck. I used to look after Tandy store on weekdays and was doing a weekend at Powerhouse. IN 2010 put Dicksmith Tandy powerhouse on new commission structure call key item. for a commission to be paid on a sale. A key item was TV computer $300 to $600 commission after that.
Inside scoop…any word on the 'weekend' sale starting today, if one? Assume you might have an idea…
All mark down stock from earlier in the week is practically gone…but only half a dozen or less people actually benefit on REAL savings, not $20-30 off here or there. Wondering if there was any point going into store? There's no draw there otherwise…service has diminished severely in recent years too.
RoOSTA
Very interesting. I used to work on the floor in Myer in electronics, so many things I can relate to. Ill talk to a few of them (not trying to hijack, just thought I could complement this thread, so generally wont respond):
Stock on display - the amount of crap that sat out the back and did not make it out on the floor for weeks/months was interesting. Not uncommon for small gadgety stuff that often the staff didn't really figure out to not make it out on the floor at all.
Quit stock - same issues at Myer not discounting old stock enough to make them move. Problem is HO who sets price is margin focused and want to maintain GMs, but because they are at HO they dont realise that the old stock is taking up floor space (not enough space for old and new range together). Therefore some products in the new range dont make it out of the box until several months into the 12month product cycle, seriously impacting new range sales. In reality, Store Manager should step in and use discretion to clear stuff but that (a) requires a smart salesperson who will flag this to the SM, (b) a SM who understand electrical (this is a problem at Myer particularly) and (c) the SM having balls to just discount the damn things. I was lucky - basically in mid Feb started putting clearance signs with the TVs to about cost + say $100-200 to clear before new models hit in Apr. One year went a bit gung ho and had a quarter of TV slots empty before the new stock arrived - whoops.
Staff sales - rarely did I see staff buy something on sale with the intent to resell. You have to remember that when we bought products ourselves, we typically bought at or close to system cost (in a few instances, below cost was common), so it had to be really really cheap before we would think about trying to profit on resales. But if there was something that one of us wanted to buy, we would stash it away. I have seen staff try to second guess HO and stash something in the hope it becomes ridiculously discounted several months down the line - the more notable attempts were a TV and a macbook. Both hilariously unsuccessful. (The face of that staff member when he watches another staff who wasn't "in" on the attempt inadvertently find it and proceed to sell it)
Sales colleagues - simply, the reason why I stayed longer than I should have, and why I worked more hours than I should have too. Awesome people.
When you think you are better than HO - we used to play the warehouse ordering system to get stock into the store that either we didnt typically stock, didnt stock enough of or HO replenished stock too slowly for our liking. Just put a "customer order" for store stock through the system, hey presto I have stock the next day. You knew the volume movers, and would stock up big on these items, especially things that customers didnt like waiting for (e.g. customer will wait for a day or 2 for a TV to come in from the warehouse, but small things like cameras, they want it now). I know management had to put up with quite a few grumpy calls from HO in relation to this, but in my defence, whatever I ordered in never lasted long enough in the store to see a clearance price tag :)
Logistics - just a simple line to say I was quite impressed at Myer's DC and logistics. I worked a NSW store outside of Sydney, so to make a sale for a TV at 3pm on a Monday afternoon, put the warehouse order through, then for the boys in Eastern Creek DC to pick it, ship it on the daily overnight truck from Sydney, have it to the local courier before I was awake and the TV delivered by the courier to the customer's house before I had even turned up for work at 9am the next day was amazing.
Love this post. A friend of mine worked in that same department in Myer in the Mid 90s… he assures me that it was pretty much the same back then and that was at a time where they had a far bigger range then they do now.
new TVs must be arriving now cos the Myer Pac Fair store has plenty of empty places - looks like they are getting out of the TV business.
anyone asked if these recent sales is actually a real loss for them (ie selling below purchase cost) or they still can make little tiny profit? but overhead cost would make this tiny profit turn to loss i think
They need get rid of old stock. look bad.
They won't be making any profit on any of the marked down stock - thus the $60 Million non-cash adjustment. They will however get cashflow in from this stock that they can use to pay down debt/potentially keep new stock coming in on credit in the new year.
Greatpost
As a matter of interest did DS have a silent discrimination policy on recruitment like race or political stuff such as union membership?
Wouldn't really matter, union membership in retail would be with SDA and they've been getting more and more submissive. A massive fail for the union recently:
Australia's biggest union just agreed to cut the huge penalty rates for some retail staff
Woolworths is in bed with the SDA, however the SDA generally ignored DS as a division because salespeople were on the Retail Award, and apart from a very old agreement with the Powerhouse stores they didn't have any EBA representation. Lots of clear policies and never any evidence that these were deviated from by HR.
New management essentially just reused the Woolies policies in that way - they just changed the logo from Woolworths Ltd to DS.
WHat was the salary like?
For a salaried retail position for a store the size I managed, great - base was average but bonuses with fantastic if your store was a strong performer.
HUGE variation in what salary managers were getting though, depending on a whole variety of factors. Unsure what they'd pay nowadays.
Great read OP.
But look after yourself. NDA or no, if DSE continues you could easy find yourself on the rough end of the pineapple. Takes very little time or cost for an inhouse lawyer to ruin your day. Even if everything you've said is true and you never signed a specific NDA, you don't want to find out via a letter from a lawyer and proceedings against you that your employment contract signed you up to various company policies. However unenforceable they are.
Or if you mention a specific supplier. Or Anchorage.
Now a question
How would you have structured DSE differently? Can a large electronics chain store be run centrally?Thanks for your concern. I still have my original employment contract and that is airtight. None of the middle management I worked alongside still work for the business now. I'll let you know if a lawyer knocks on my door, though. :)
Very tough question, I'll focus on one particular point that sticks out about the issues DS has ran into. The thing that they've struggled with since the change in direction/branding/marketing/positioning in 2008 is that prior to this time, they ran 3 different brands (Tandy, DSE, Powerhouse), which while selling the same core products, all had vastly different product ranges, product mixes, etc - thus why they had different catalogues, different store fitouts, etc but (mostly) centralized management. When they made the change from 3 brands to 1, there was obviously a lot of synergy with cost and efficiency on the back end, but they didn't take into account that running one catalogue for stores varying anywhere from 90sqm to 2000sqm was potentially not a good idea. Large format stores suffered as the products that they stocked that weren't part of the core Dick Smith range were rarely advertised, and therefore didn't sell very well. Post Anchourage, I'm not sure what they've done to try and rectify this - I honestly haven't picked up a DS catalogue since I left the business. But when I left, stores were split into 24 different segments based upon square meterage - in other words, there was 24 different potential product ranges for a store network of about 300-350 stores. I think it can be done - what I hope is that in future, whether its still on the ASX or in public hands that whoever runs the business makes an executive decision on how to effectively operate such a varied store network - if it involves only keeping a specific size store and selling the rest off/exiting the leases/rebranding the rest to something else, or if it involves going back to multiple brands as the business used to be.
Interesting perspective.
I'm thinking that the ultimate failure for the business comes down to this. Unless your stores are all cookie cutter then any centralized decision making is very ineffective. Maybe segmenting your stores into 2 or 3 different types might work. But if you've got this huge scale of sizes, locations, demographics and structures then you're basically fked. Even the best centralized control is doomed to failure.
JB does this very well - they have two standardised store formats (JB and JB Home), and even with variations in store location, size, square meterage etc seem to all roughly have the same ranging for each store in each format.
NDA normally for market sensitive info, trade secrets or confidential information. None of what he has told us fits that criteria, it's just info we cbf looking up ourselves…
- you'd be at limits enforcing this if it was just company policy and not written into the contract
- they'd probably just seek an injunction, as pointed out previously everything he told us was already published in various blogs and news articles.
Like I said, takes very little time or effort for an in house lawyer at a big company to ruin your day. I've seen it happen, even when the court actions have been ultimately unsuccessful and a company has barely any case.
And with claims like this:
..Anchorage most definitely misrepresented the overall health of the business..
There could be plenty of motivation. Regardless of how correct the OP is.
Bravo, this was such a great read that it made me finally create an account.
I used to be an equity analyst (quit recently) so all the convo on Anchorage is interesting. Sales figures can be pumped up due to heavy discounting which in turn erodes margin - what's a good way to catch onto that? For example, Kathamandu is pretty much on sale the whole year!
Any tips on other listed businesses you admire or don't like?
Bro this has been a very very Interesting reading< thanks again for answering all teh q in so much detail.
Here's a q for you.
Do DS employees hate Ozbargain ? Any COmmunal stereotypes that you could pattern recognize ? Are some communities more prone to haggle than others ?
Ex Dicksmith team found out about Ozbargain at work. We used to get Memo about oz bargain all the time I love oz bargain. I personal Hate gaming sale in 2010. people, where to ask all weekend moving hide stock so, went around on Sunday night remove all good stuff put pile out back. enjoy watch people run in idiots hand pick who go it. we had lots of good stuff.
I can't speak for all employees, personally I didn't, neither did my staff (based upon myself giving staff pre warning if something was oz-bargained and to expect queries about it). I loved it because quite often something appearing on ozbargain cleared stuff out of my store.
Haggling? Individuals that come from regions of the world where haggling is part of the fun of shopping haggled more then others. As the years went by though their was less and less of a divide between different ethnicity or backgrounds when it came to haggling, especially once online shopping because a lot more popular.
What was and what is (or what is likely to be) the SOP when it comes to reselling used/returned/slightly defective/blemished merchandise?
I'm sure you're aware of the used-HDDs-resold-as-new scandal in the past where customers kept finding data already on their "brand-new" external hard drives.
Was this just a bunch of cowboy stores in the network making up their own rules, or did DSE actually decide at some point they were going to try to resell dodgy stock and just hope no one notices?
The article mentions DSE claims they forgot to format the HDDs before they resold them; would it be reasonable to assume this practice applies to other products, e.g. got a returned laptop here, looks okay, I'll just reinstall the OS and no one will know the difference.
Obviously illegal in my opinion; how can you claim to sell a new item when it has been used? If it was advertised as used or returned, then I wouldn't see an issue here but in the many cases I've seen of this type of scam, they are sold and advertised as brand-new, in their original packaging (meaning the seals should never have been broken).
14 day Change of mine you bring back the product within 14 days no question asked. They red sicker No new return product used to put a lot of customer off. even with a discount. I became a repacking master at my store. if could "write off" I would do that too. keep it for around the store. I had one lady that would come every 14days like clockwork changes her laptop. she had it done 9 time before i put a stop to it.
I worked at dickies from 1999 to 2005 in small stores and then managing a powerhouse. Putting stock back was common practice when i was there. But usually the sales team would take care to make sure it was as new.
however some did put stock back on the shelf in teh case of a faulty item where the sales team did not believe teh item was faulty, and then a yellow sticker would go on it so if it came back twice you knew it was faulty. This mainly happpened with Amplified aerials & indoor antennas i can remember!There was no official policy but it was something I was taught when i was 16 by store managers.
The other ex employees who responded to this covered it pretty well.
SoP was that when an item was returned, it was to be inspected - if it was unused (sealed, or otherwise appeared unused - e.g seals not broken, packaging in perfect condition, if items didn't have shrinkwrap or seals, etc - that was a time where their was potential for errors to be made). If it was clearly used, it was marked as "T2" in the system, a "Not New" sticker was to be placed on the item with the reason why the item wasn't new, and generally the item was to be sold at a discount at managers discretion. If it was defective, it was to be returned as faulty - a low value item would just be chucked in the bin, a high value item sent to be evaluated/to be RMAed). One key flaw that wasn't made 100% clear until after this kind of incident first happened (I can't remember if it was the Prepaid Phone or the HDDs first) was that the SoP did not cover checking the memory of opened, returned devices. There was never any suggestion to sell returned/used items as new - however when the 14 day returns policy was in affect this resulted in some stores practically been half used stock.Well aware of this scandal (to my frustration - while mostly forgotten these days it was disastrous for a long time, especially selling hard drives to customers). This sort of thing would have happened due to incompetent store managers, or lazy staff that simply put the item back on the shelf. All the external HDDs sold had seals - on the bag the HDD was in and on the packaging outside. If the seals were removed or broken, I put a "Not New" sticker on the item. With your example with returned laptops… good chance this would have happened with the item declared as not new, but as new… it would have been very difficult for something like that to happen as all the packaging would have been open the whole way in. I'd say with the HDD blunder that the item was returned to the shelf because from the exterior it was repackaged in original condition by the returning customer and the staff member probably didn't check it.
Even after the various customer scandals that the media got involved in there still wasn't enough emphasis on the legal consequences of selling a used item as new. They really should have gone done this route IMO.
I worked for a vendor whoes product became linked to the first user. This was a huge pain in the arse for us. It became less of a problem after the scandals but never went away fully.
I would never ever return an item with data on it to a retailer. I'd rather destroy a defective HD and lose a few $$ than have a retailer deal with any sensitive information.
This was rare for products we sold - with computers, laptops we could just use the recovery partition. The only exception to this rule was Netbooks, when they were still a thing - they often did not have sufficient space for a recovery partition, and as a result we had to send them to the vendor to get them to restore them to factory settings for us - massive pain in the ass.
do u think its a good time to buy dsh stocks atm
$2.20 issue price. $0.28 on Monday. $0.39 at week's end.
Some fun if you bought on Monday.Still, buy for some short-term profit, given degree of drop? Sure. Worse things you could gamble on.
Fundamental problems beyond the initial private equity book-cooking.
Apparently, current management growth strategy pretty much consists of increasing the number of stores and extending the range of high-margin, own-branded (badge-engineered) gear in order to compete with other (Kogan, etc.) generic stuff.
Thoughts of a long-term investment?
You'd really want to be keen.Too much risk. If they drop under 30 cents again I don't think they'll recover, and most likely it'll end in someone buying the business out considering the market capitalisation at less then 30cents/share.
better off going to the casino. at least you don't pay tax if you win
Thanks so much for the informative AMA!
Learned a lot.
Thanks for the thread OP, your AMA + insight is quite interesting.
Your comments seem to show that you are far better educated than I would have expected of a retail store manager as a customer. Would be quite interesting if all Store Retail managers were so knowledgeable about the company they work under (I have personally never worked in retail before.)
With current state and deals resembling death throes to many in the market, if the share price drops low enough, do you think that Dick Smith himself will seek a comeback after more than three decades away?
If so, will he reboot by selling his food products - along with electronics, but in reverse proportion to Aldi?
Thoughts?
On the basis of your gut-feeling, will staff start to eat price tags if they are 'accidentally' smeared with DS Peanut Butter?
Big questions, but inquiring minds need to know. Ok, my mind does.
Also, Smooth vs Crunchy?
(Great thread, by the way.)
This would not happen - Dick himself does not have the funds to do this.
And also theyd id try selling his Dick Smith Foods in 2004 - At our powerhouse we had all the Consumer Electronics & music you could want…… And biscuits & Peanut butter!
This failed miserably, worse than our foray into home appliances after we ditched our Semi Conductor & Electronics business….
Dick Smith the man is deluded, I dare say he is worth than Gerry. The smartest thing the guy did was sell the business and get out ahead before he ruined it with his ideas.
Crunchy:-) you?
Same. Smooth-only as a kid.
DS pb apart, if you like pb taste without any sugar added at all, worth trying Pic's: http://shop.coles.com.au/online/national/pics-really-good-or… I think that it has been on special occasionally for around five.
Slightly over-roasted peanut taste, worth buying just for the smell. :~)
Thanks!
The funny thing is, this isn't the craziest theory I've seen when it comes to speculating who may end up purchasing the business.
While the pay for salespeople isn't that great, they probably aren't going hungry to the point of eating price tags with peanut butter on them.
I alternate. Generally Crunchy, but I really loved the (now seemingly off the market) Kraft "whipped" peanut butter that was around recently.
Thank you for giving us time to answer our Q.
A quick question regarding returned items, what is the policy ? Re-package it and sell it again ? Reduce the price and try to sell it ?
Did you ever discipline any of your team ? What for ?
Once the 14 day change of mind was gone I generally refused to return items out of original packaging and/or were unsaleable. Trained salespeople to ensure the customer was well aware they needed the packaging in perfect shape if they wanted a chance at a refund if they wern't 100% sure. Some items were repackaged and resold as they were, if they were unopened or otherwise unused (Think things like cables, adaptors, etc that have simple packaging, or larger items still with original seals/plastic). Larger items were cleaned, wiped (if memory was on them), stickered as used/not new and resold at a discount - this discount was at my discretion - generally 10%, but sometimes more depending on if it was an item that would need more then that to get cleared out. Lots of managers discretion here, and in some stores this was policed very, very poorly.
Only once, with one individual - regarding punctuality (late 15-30mins every shift).
I have a question.
How does the whole 10% off Apple work ?
Was it a planned event or random based on over stocked items ?
How could DSE afford to sell below or very close to cost ?
Tony
There is an interesting reason why 10% off Apple was prevalent at DS more often then other times, but I won't post that on a public forum lest Apple come and find me. I can tell you it was based more around sales quotas on Apple products on a monthly basis, more then overstock (more often under stock was an issue during some of these sales). Most of these events were planned by marketing as a weekend kind of deal advertising online/in newspapers.
10% off Apple was a very good way to boost top line sales. Apple products tend to be easy to "attach" to - lots of Applecare got sold, lots of accessories too at least compared to conventional laptops. If a 10% off deal results in a boost in applecare sales compared to normal the margin made on applecare and accessories was enough to bridge the loss in margin during the sale.
Love the in depth answers so far, wondering where you work now?
Hi OP, I just want to make a comment that this is the best AMA I have ever read this year. I thought the one with Davo1111 on April's fool was the best but this is epic.
Thanks :)
Boochan, I would like your opinion on the core direction of the business.
It seems Dick Smith has completely lost it's point of difference in the marketplace, where once it was very clear. I am not sure I could even really answer if prompted these days to describe Dick Smith to someone. Sort of; entertainment, phones and general accessories?
Anyway, I remember as a kid going to Dick Smith with my dad on a Saturday morning to get electronic components. I absolutely loved the place. I found it fascinating. I did so may of those "Fun Ways" kits and quite often would see other crazy electronic devices while I was there. I begged my parents for and got for my birthday "Pocketcom" miniature walkies talkies as a kid. We made so many purchases large and small there over the years, as a result of always going in for the little kits and components. Our Local Dick Smith actually had an electronics repair lab downstairs as part of the business. All these techs running around in white lab coats repairing stuff. Fascinating for a kid. Impossible to imagine these days.
Wind the tape forward and I still build electronics. I obviously don't buy my components from Dick Smith any more. I can't as they don't sell them, but I wonder what the place would be like if they still did. Perhaps I, like so many other hobbyists would have kept going in very regularly and as a result would have constantly be buying larger ticket items there.
When the business changed direction I get the feeling that it was being done by people who had no idea or feel for the way the place worked. They may well have just looked at component sales as tiny and staff time intensive, without realising they were part of the fabric of the Dick Smith business as a whole and led to many greater sales while providing a clear direction in the market place and a loyal customer base.
Thoughts?As I see it, businesses in the consumer electronics industry in Australia tend to have some kind of point of difference that drives foot traffic and top line sales. JB is CDs/DVD/BD/Gaming, Officeworks is Office Supplies/Furniture, and then the other players small appliances and Whitegoods. Dick Smiths major (I'd argue that minor points of difference like an extensive battery range still exist) point of difference was erased when tools, kits and components were removed from the range - and as a result, margins fell reasonably quickly as the new store formats rolled out. The other issue in this regard is regarding commercial sales - Dick Smith used to have the education sector tied up in a very profitable way in terms of those sorts of products (even up to the Late 00s some stores had a big percentage of sales as trade/commercial/education account sales). Once they stopped ordering these products, the commercial business fell apart as the other product categories DS could do commercially were long tied up by HN and JB.
My personal take? They did need to do something about the way components were handled in-store - the loose components were a stocktaking disaster and were very often stolen. They also didn't match with the sales training/model they moved towards (ergo more KPI focused). What I think could have worked in this context was that the larger stores should have retained kits and tools, but components would become a behind the counter type deal. You'd tell the salesperson (one that is trained in selling components) what you wanted and they'd go out the back and get it for you. This would reduce the concerns over the area taking up too much shelf space/shrinkage. Considering a lot of stores got fitted out with a service desk this wouldn't have been hard to implement. They also should have never got rid of the ranges at all when it came to commercial sales.
If they can find some kind of major niche or point of difference in the marketplace to differentiate the business from competitors, that will be the key to success.
Tell me about eneloops
Do you think the Dick Smith brand electronic equipment is good quality and/or good value? Not talking about cables, batteries etc that you mentioned earlier with high margins. More like the set top boxes, TVs, other stuff that needs a little "engineering" to design and put together.
I suppose it could vary, depending on the device. Just curious if you recommend Dick Smith own brand?