Nikki’s Story: An American Dream
—EZklick’s Human Dimension—

Nikki came to the USA from Nigeria as a young college student. She met the man who became her husband. When they grad-uated, they borrowed money to open-up a West African restaurant. In five years they made enough money by selling the restaurant to buy a small grocery store. Today they own three ethnic grocery stores. Nikki runs one; her husband another. A cousin runs the third.

Let me tell you about Nikki’s day. She opens the store at 9:00 in the morning and closes it at 9:00 in the evening. She eats her lunch at the cash register. She rings-up customers. Pedro walks-in to wire some money to ma in Mexico and Nikki sends it by Western Union. Folks walk in to make a Xerox copy, to send a fax — she does it. Wanda comes-in with an electric bill she doesn’t understand — Nikki explains it and collects the cash to pay it for Wanda. The Utz delivery man comes-in to fill the potato chip rack. Nikki watches him like a hawk, checks the handwritten bill, and pays him with cash out of the till.

Nikki has three little boys. They come to the store after school. They sit around on the floor and Nikki answers their questions while they do their home work.

Three nights a week, after closing, Nikki walks around the store to make up a shopping list. The next morning she gets-up at 5:00 — and takes the family van to the Washington Cash & Carry to buy 30 to 50 cases of products. It’s dark and dirty in the warehouse. She can’t find 8 of the cases she needs. She goes up to the front and asks Mr. Lee who owns the distribution center for help. In broken English he says “back there somewhere, I just saw ‘em come in.” She gives-up; goes across the street to United Wholesale and picks-up items that Mr. Lee doesn’t carry. Then she stops off at AFRIK Wholesale to pick-up some ethnic items that she forgot to tell them to deliver the day before.

She gets to her store about 8:00 am and starts putting merchandise on the shelves. While she’s doing this, shoppers see her through the window and knock on the door to get in even though the store isn’t open yet. Around 11:00 am she brings in a temp to run the register while she goes to Sam’s Club or Cosco to get the stuff she couldn’t find at Mr. Lee’s. She really hotfoots it through Sam’s because she’s worried the temp may pull money out of the till, or give stuff away to her friends.

This goes on 7 days a week. Week after week. Nikki has not had a vacation in 10 years.

EZklick helps Nikki. It does more than save her money. It gives her the most precious gift of all. EZklick gives Nikki the gift of time. EZklick put a CRISP system in her store. Right away, it got control over the meat department inventory so the ‘meat & fish guy’ couldn’t steal very much. CRISP makes-up her shopping list. Sales went up because she can do a better job of stocking the right stuff. She’s saved maybe 4-6 hours a week.

It’s a big deal to her. But EZklick hasn’t even begun to scratch the surface. So much more could be done for her. If EZklick owned one of the Distribution Centers she shops at, EZklick could save her 16 hours a week. And, really ramp-up her profits. You can probably see how this works, can’t you?

Here are a few of the things that happen when EZklick owns the Distribution Center

• Remember the shopping list CRISP makes-up three nights a week for Nikki? Well, before it’s printed out, CRISP will transmit it to the Distribution Center where it’s bumped-against the inventory records — this just take a few seconds. Now, when CRISP prints out Nikki’s shopping list, it puts an asterisk by each item that is in-stock at the Distribution Center. It also lists the items in the order they’re stored on shelves in the Distribution Center and prints out the locations of each item. There are no surprises — and Nikki can cut 30-40 minutes off the time she spends in the Center. But this is just the beginning.
  
  
• EZklick can “look into” Nikki’s CRISP system. It sees every single item Nikki sells and every single item she buys — so, it can stock all the stuff Nikki needs — now she doesn’t need to go across the street to another Distribution Center — which saves her even more time.
  
  
• A laundromat and a couple of restaurants near Nikki’s store buy big commercial size boxes of soap from Nikki. There isn’t enough volume in this item for the Distribution Center to stock it, but if Nikki sends an order to the Distribution Center before 3:00 p.m., the Distribution Center will automatically order it overnight and it will be waiting for Nikki at the “Will Call” bin when she comes-in.
  
  
• With the Distribution Center’s act cleaned-up, there is no longer any need for Nikki to take delivery from Utz and other expensive direct suppliers. She can save about 20% by getting these items at the Distribution Center.
  
  
• If, Nikki is willing to pay a little extra, her order will be pulled-off the shelves for her and waiting for her when she comes in. If she’s really in a bind — has a meeting with one of her kid’s teachers — she can pay to have the stuff delivered to her store.

Once you get a few Nikki’s going, things become very interesting for the Distribution Center. Remember that Tom Hiles’ background is manufacturing. The Nikki’s of the world represent an important market for manufacturers. Only 20% of their products go through these stores — but it’s where manufacturers make 80% of their profits. Why? The bulk of their sales go to the big guys — Wal*Mart and the Safeways and Krogers. But these big guys grind the manufacturers down so much that they can’t make any money — especially Wal*Mart. Remember how many manufacturers Sears put out of business? Wal*Mart is even rougher.

So, manufacturers are very interested in reaching the Nikki’s — they just don’t have a way to do it. But EZklick does. Tom has already lined-up some of his manufacturer buddies who are ready to sell direct to the Distribution Center on a test basis — which saves EZklick about 9% and lets EZklick pass manufacturer specials on to the stores — deals which none of the stores ever see now. See what this does? It increases margins on physical products — and increases sales.

Because of all the problems they have with distribution, the Nikki’s of the world typically don’t buy more than 15% of their stuff from any one Distribution Center. Tom and the EZklick management team, believe they can capture 45-60% of Nikki’s purchases by making her life easier. It’s also good for EZklick. Distribution Center sales can triple without adding a single new customer!

Margins go up because: EZklick cuts-out the middle man by directly dealing with manufacturers — and adds good products, especially imported products, that have higher margins. Remember, CRISP lets EZklick see all, know all. It’s a benevolent Big Brother. It knows every product Nikki buys and sells. If she’s moving a good product that EZklick doesn’t carry — EZklick will go get it. EZklick can “cherry-pick” its competitors’ best products.

But this is merely the beginning of the margin story. So far we’ve just talked about physical products, right? And there is a limit to the margin you can earn on physical products, right? But consider electronic products! Consider check cashing, emergency loans, money transfers, bill paying. CRISP automatically controls and distributes these electronic products. Merchants earn commissions on distributing electronic products — and make a 70-80% margin. And so does EZklick. Electronic products don’t have to be carried into a store or put on shelves. It’s all automatic, no merchant or EZklick personnel need to physically touch these electronic products.

By blending electronic products, and their 70-80% margins, with physical products, the margins for participating merchants increase dramatically. The service merchants receive also improves because EZklick can average 8-10% net income, compared to 1% for the industry as a whole.

The EZklick/Merchant partnership improves values for both. What do you think the industry analysts will say. What do you think will be the reaction of Institutional Investors who like the safety of “Brick & Mortar” but yearn for higher margins? It’s pretty exciting isn’t it?