In the later half of 2014, Red Witch embarked on a process of the renewal of its distribution network, and with the help of Damon Waller (previous MD for the Orange Music Electronic Company Ltd), who joined the team October 2014, Red Witch has been successful in making some very important changes in a very short period of time, and already has boosted the company's financial performance.
- In October 2014 Warwick (based in Germany); who has a long-standing history as a key distributor and have emerged from the GFC in a very strong position, have taken on distribution for Red Witch in the following areas:
- Czech Republic
- In January 2015 Red Witch signed with Musical Distributors Group (MDG) as the distributor in the USA. MDG are a small and fast growing company who are well liked by dealers and work with all the big box retailers. They have sales representatives on the road who are passionate about what they do, and are in constant communication with their dealers. MDG is really excited about the professional development courses and have asked to be the first cab off the rank. "Killer idea" was the term they used to describe the course concept.
- In January 2015 EFKAY was appointed the new distributors in Canada. A much larger company than the previous distributor, and one with a far larger dealership reach. EFKAY is both professional and, again, passionate about what it does.
- AMI is the new distributor in Australia who have their own chain of stores, and also work with the majority of dealers in Australia.
- In March 2015 the largest music seller in China, Parsons, who has shown impressive growth over the last few years signed as the distributor for Red Witch.
- Other regions currently in talks for distribution are Spain, UK, Denmark, Taiwan, Croatia and South America.
- Other new markets to be progressed in 2015 are Italy, France and Russia.
In smaller markets Red Witch acts as the distributor and sells direct to the dealers (retailers). Red Witch does not sell direct to consumers. Its intention is to move solely to distributors where possible.
Where The Growth Will Come From
The world's largest markets will continue to dominate the global sales over the next five years as shown in the chart below.
Adjusting To The New Environment
Post GFC retailers across all sectors are seeking to reduce holding costs by reducing inventory.
Dealers want to be able to place smaller orders more frequently, and have them delivered faster.
Online stores first started the trend of selling items without holding stock. Brick and mortar stores have been forced to follow suit, many becoming 'showrooms' for all but the fastest moving stock lines.
How Red Witch responds to this new environment is important.
Red Witch has found that the one thing that killed cash flow faster than anything else, was having no stock to sell. While this may seem obvious, it even hurts sales of the line items held in stock, as many dealers and distributors won't place an order unless they can get all of the stock they require in one shipment. If you are out of stock, you are out of mind.
Red Witch has worked closely with the manufacturer to negotiate an arrangement which allows a significant reduction of holding costs by bundling product lines together to reach minimum units per manufacturing run. This enables fewer units per run of slower moving stock and the ability to order faster moving runs more frequently.