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
Thank You!