Partywinkel abandoned its static min/max strategy

With its 10th anniversary around the corner, Partywinkel.nl has become an established e-tailer for festive products in the Netherlands. Starting from an attic with nothing more than some plastic boxes to store their stock, they significantly expanded in the last decade. The two founders, Patrick and Casper, are still involved in growing the brand name. However, they had to overcome some challenges to make their growth sustainable. Read further to find out how automation enabled Partywinkel to make their employees’ input more strategic and start their second e-commerce project: Babywinkel.nl.

Challenge to control growth

Partywinkel is the story of two friends that started a webshop from an attic room and expanded into a webshop with a fully operational warehouse and 45 employees. Patrick Noij, one of the founders, explains the evolution of their self-made organisation. “We developed everything ourselves. No book could explain how to set up a warehouse, set up a barcoding system and organise purchasing operations. We tried, built and improved everything ourselves. Over time, we got into such a flow of growth that we wondered: ‘how can we control this?’. ”

“We were at our limit and really at a crossroads. Do we want to build an extra floor on our warehouse and scale up to that size? It would have required extra investments and more employees to make the growth possible. On the operational side, we lost our overview due to the growth in stock and our time-intensive manual purchasing process. We used to manually place purchase orders by logging on to a supplier website and throwing products in the online shopping basket by hand. That was how it worked. However, at some point, you need to step out of your comfort zone and make a decision about your growth. We knew that we had to do things differently and said: surely there is a system that calculates and forecasts purchases for us.”

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Accept challenges, make decisions

“Running the business became so time-intensive that we started looking for solutions to make our operations more efficient. We were still working with the very static min/max purchasing strategy. That was not ideal for our cash flow position and stock level. If demand suddenly dropped, we had to deal with big numbers of excess stock.” Patrick and Casper found in Optiply a partner that could solve critical purchasing issues and integrate with their source system Lightspeed.

“Additionally, we decided to outsource our entire logistics to a fulfilment party. That was a tough decision, as we had to say goodbye to 35 people.” Patrick explains that this was necessary to regain a grip on the business. “The way we structured our business was not healthy anymore and slowed down our other activities. The hassle and stress of wanting to do everything ourselves held back the growth and evolution of the company.”

“We knew that we had to do things differently and said: surely there is a system that calculates and forecasts purchases for us.” Patrick Noij -Founder, Partywinkel.nl & Babywinkel.nl

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Automation adds efficiency

Adding the automated purchasing solution from Optiply sped up Partywinkels purchasing process. From that point, they could abandon placing purchase orders manually. They abandoned the static min/max purchasing strategy resulting in more control on stock management and an improved cash flow position.

Working with a fulfilment party and Optiply makes a difference in efficiency for Partywinkel. Patrick explains: “Now the purchasing process is almost completely automated. Placing orders is as easy as one click nowadays. That is especially important when my partner, Casper, is on holiday and I am taking over from him. We still check the suggested advice in peak seasons and see room for improvement, but it is also the element where we can add value with our market knowledge. In addition, we have more insight into sales increases. It makes Optiply a top-notch system that enables us to control our stock level and deal with more and more products.”

3 Challenges for Partywinkel were:

1. Manual purchasing process
2. Static min/max purchasing strategy
3. Limited control stock management

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Growth in Service Level

Because of the collaboration with Optiply, Partywinkel could expand its stock without the risk of excess stock or negative cash flow impact. Following the ABC analysis Optiply uses to categorise the stock, the growth for category A products is the biggest, having more impact on revenue than B and C category products. While the stock level increased, there was also an increase of 92% in revenue. Additionally, Partywinkel reduced lost sales by almost 5%, showing their service levels improved.

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Birth of babywinkel.nl

The biggest gain of their decision to integrate automation in their operations is that Patrick and Casper could start with a second webshop: Babywinkel.nl. “We both became a father twice. When we tried to order items for the children’s rooms, it was frustrating that products were unavailable, sold out or delayed. Especially stock-outs were something that frustrated us, as we do not work with back-orders. That triggered us to start with Babywinkel a year ago. We managed to put Partywinkel on its feet and wanted to take on a challenge in a different market.”

Patrick explains what they experienced. “Babywinkel.nl brought the challenges of operating in a closed and slow market. Suppliers were hesitant to start with a new name and literally said that the market was already divided. Nonetheless, we were persistent and aimed high. Since its inception in October last year, we made huge steps. We can now say that all suppliers made up their minds and that we stock all well-known brands.”

Patrick says that he and Casper are fully committed to developing their webshops. “Our goal is making both Partywinkel and Babywinkel.nl the no.1. online shop in their market for the Netherlands and Belgium.”

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3 results of the collaboration withOptiply

1. Less time-intensive purchasing process
2. More insight into sales figures
3. Purchasing tasks are transferable