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MIPROS

Simpro's lean distribution model.

MIPROS is Simpro's unique lean distribution model, designed to strip out unnecessary cost throughout the distribution chain and maximise value to the End User. Simpro developed MIPROS after identifying that the costs of a traditional distribution model were preventing Simpro bin-lifters from achieving the same mass adoption in the UK that they have enjoyed in New Zealand and Australia.

The MIPROS distribution model allows for small order-quantity, ‘drop-shipping’ resellers to access pricing on internationally sourced products that was previously only available to large exclusive stocking importers.

How Traditional Distribution works

The traditional distribution model, with an exclusive importer and reseller chains, functions as follows:

  1. Simpro sells the machine to the Master Importer, taking a margin on top of the cost of manufacture.
  2. The Master Importer sells the machine to a Wholesaler (for instance a large waste-industry equipment supplier), collecting a margin. This margin must be quite large to cover the aforementioned stock-holding costs.
  3. The Wholesaler sells the machine to a local retailer, collecting a margin.
  4. The Retailer sells or rents the machine to an end user, collecting a margin.
  5. End user, having paid all of these margins, benefits from the machine.

The issues

This model is not lean - it has several 'fatty' elements that add cost to the end product. This reduces sales volume, which makes everybody poorer. The main issues are:

After studying these issues, Simpro designed the MIPROS model to address them.

MIPROS supply and demand analysis

How MIPROS distribution works

The MIPROS distribution model addresses the above issues, with the following unique features.

The MIPROS process in the UK

  1. A Partner secures a firm order from an End User (possibly with the help of Simpro consignment stock in their showroom).
  2. The Partner places an order with Simpro.
  3. Simpro sends the Partner a proforma invoice in GBP, including UK bank details for the Import Broker. The invoice is to be paid in full before the goods will be shipped.
  4. Once other Partners place sufficient orders for the container to be full (or a maximum of 2 months, whichever comes first) the Import Broker pays Simpro and the goods are shipped.
  5. Once the goods are customs cleared in the UK, the Partners must arrange for the goods to be collected from the Import Broker's depot within 48hrs.

MIPROS plan view

Costs & pricing comparison

Traditional distribution

 

Product Landed Price

Importer Sell price

Wholesaler Sell Price

Retailer Sell Price

 Additional Margin for each person handling the product

 

1500

2000

2667

3555

 0%

Margin achieved

 

25%

25%

25%

MIPROS distribution

 

Product Landed Price

 Null

Wholesaler Sell Price

Retailer Sell Price

Additional Margin for each person handling the product

 

1500

 -

2307

3550

10%

Margin achieved

 

 

35%

35%