Company Profile - Bargain Max

Taking it to the max

After just a few weeks in the hot seat as the new CEO of BargainMax, Alex Woolfstein tells Toy World that he anticipates 40% growth in the company this year as more consumers strive to find a bargain buy.

fter a flat year in 2022, this may seem like a very ambitious goal, but Alex is confident he and his team can achieve it. With the online retailer billed as “the home of cheap toys, games and kids homewares online for children of all ages”, Alex stresses that many consumers are now shopping around to find the best prices, landing them on the BargainMax website.

To ensure customers will have an even more efficient and friendly service, he has set about updating the company website to make it more streamlined and userfriendly, and placed an increased focus on customer service.

“I feel like I’m starting from ground zero with a lot of things,” says Alex, who took up the reins as CEO eCommerce director and senior buyer. “I’m trying to build everything up, including better systems, so we can make the business more effective and more profitable. There has been a huge focus on the customer services department. My mantra is top level service in every area, so we’re ensuring that our customer service team is servicing our customers in the most effective manner, in the most efficient manner and with the most diverse ways of being in contact."

According to NPD, in-store purchases increased throughout 2022 with offline sales accounting for 2021. However, at 49% of the market, online sales are still a long way ahead of where they were before the pandemic, when they accounted for just 35% of toy sales, and Alex hopes this will continue.

“I have learned not to try and predict too much anymore,” he says. “Our aim is to continue to improve our offering and our service. If we continue to drive a great proposition to our customers, then we will continue to succeed.”

Technology is playing a big part in driving growth, and the new website which has just launched features brand-new tech, adding incredible speed – “one of the biggest factors in terms of conversion rates in eCommerce”, explains Alex. “We wanted to build a site that is phenomenally fast, phenomenally sleek, easy to use and easy to shop around. Whilst the old site was functioning well, we felt it could be improved.”

Some new features BargainMax will be looking at include multiple payment options and new ways of interacting with customers to help provide an efficient service, including using WhatsApp, a feature which will be introduced very soon. The retailer is also looking at launching its first ever customer loyalty scheme this year.

“There are lots of different pieces in the puzzle,” Alex adds. A huge part of this puzzle is logistics and the transition to the new distribution centre at PLP Ellesmere Port will soon be complete, having started in November. Located on a 12-acre site by Junction 8 of the M53, the new centre has been built to BREEAM Excellent standard.

“The new site is now almost fully operational and we will be out of our existing warehouse by the end of March,” Alex explains. “It has all gone very well. The biggest difference is that in the previous warehouse, we could only dispatch 5,000 orders a day at a pinch and we need to be able to process triple that amount at peak times. We stock about 2,000 SKUs in our current warehouse and we want to increase that to between 4,000 to 4,500 SKUs.

“The new warehouse is a much better set-up and is built for scale. It’s enabled us to at least double what we are able to offer, and we are hoping to do a lot more. We also need to ensure that the warehouse team is being utilised as well as it can – for instance, can we work double shifts, or can we work weekends – how can we get Sunday’s orders out on a Sunday? It’s about making sure all those pieces in the puzzle fit together, but we’re firing on all cylinders.”

We asked Alex if the cost-of-living-crisis has had a big impact on sales. “It’s really hard to know because last year we had so many of our own operational challenges which limited what we were able to do,” he tells us. “But I think it is noticeable in terms of traffic and across the wider toy industry. BargainMax is positioned well though, and we carry most new and current product at price points which fit within our own margin requirements. We are not ashamed about the great pricing opportunities we offer.”

He adds: “In the past, some suppliers have been concerned about our name and weren’t keen to have a bargain proposition associated with their brand, but I think most have now realised that this doesn’t necessarily mean price destruction, it actually means cleverly utilising shared opportunities to offer value for the customer.”

Working with suppliers, Bargain Max has built up solid data over the last couple of years and knows what will sell in a particular line over a particular period. “The more you work with suppliers, the more support they give you and the more opportunity they give you,” explains Alex. “As we trial and test different product ranges, we can see if they work well and expand on that.”

But with stiff online competition from the likes of Amazon, how does BargainMax position itself and persuade suppliers to get onboard?

“Suppliers recognise they need to have a breadth of retailers to distribute their business,” explains Alex. “They can’t just have one or two dominant retailers in their portfolio. It is also about reaching new customers and different segments of the market and new children. Suppliers want to be a part of our journey as they recognise the reach our website has, the new segments of the market that we can reach, and they want their product to be a part of that.

“We also try and focus on being great to work with. Our aim is to create enjoyable and meaningful relationships and work with suppliers on their own plans.”

A category which has performed well for BargainMax over the last couple of years is Outdoor Toys, particularly with companies such as Dolu, while the company’s relationship with Wow! Stuff has also seen great success, especially for its Jurassic World Real FX Baby Blue, which was one of the website’s hit items of 2022.

Alex is excited to reveal there will be more investment in marketing for 2023, with a budget increase to double what it has been previously. “One thing that we know is that when a customer purchases from us, they will come back seven times a year; that tells me if we can reach more people and encourage them back, then sales will increase. In the past, our marketing has been limited to low-hanging fruit – people who have a fairly strong intention to buy anyway – but what we need to do is

reach customers who don’t have a clue who we are and currently buy the products we stock elsewhere.”

The marketing strategy will include a heavy focus on social media, particularly TikTok, and BargainMax will also be looking at TV advertising towards the back end of the year., along with offline marketing opportunities.

Alex says that behind the company is a very strong team and this was bolstered in January with the appointment of a new senior buyer – Neil Mitchell, who is well-known to the toy community through previous roles at Very and more recently Home Bargains.

The majority of BargainMax’s offering is made up of branded toys and licences, and Alex forecasts this will continue to be the case in 2023. He is forecasting top sellers for the year ahead to include Mattel’s Monster High range, Hasbro’s Furby and Disney100 lines, celebrating Disney’s centenary. Moose Toys will also remain strong with its Bluey line, he adds.

Having attended both London Toy Fair and Nuremberg, Alex is now looking forward to seeing how the coming year unfolds and says there is plenty of opportunity for growth. Despite growth being flat in 2022, he is certain that 40% growth is a realistic projection. “We are confident this is achievable,” he explains. “Our suppliers are supporting us to do so, and they and licensors are working closely with us too. We have had a strong start to the year already, due to gaining many new customers as a result of preChristmas marketing. I am confident this will continue and we will have a much better year. Looking ahead, we hope that increased international business will also be a big part of our success."