Beacon Lighting has invested significant resources in product design, innovation and quality.
A key strategy for the merchandise team has been to ensure it obtains products at multiple price points to create a ‘good, better, best’ product offer. This allows Beacon Lighting to create quality products with features and price points to meet the needs of different customer segments within the primary target market. For instance, in the LED down light category, the Company offers a ‘good, better and best’ product. All effectively have the same function but each differs significantly in relation to specifications, design, features and benefits, and pricing. This is consistent with Beacon Lighting's strategy of providing fashionable and technologically advanced products that represent value to customers.
The vast majority of exclusive products are designed and sourced internationally with third party factories and co-ordinated with Beacon Lighting's team in those locations. A small proportion of stock is also supplied through local wholesalers in Australia. A number of exclusive national and international distribution agreements for key products also exist. The business strategy is to have a broad supply base and is not materially reliant on any single factory or supplier for continuity of supply. The product range is manufactured to comply with Australian Standards and packaged to Beacon Lighting's specifications which is monitored and managed through the Company's engineering and quality control team.
More than 90% of products supplied to Company stores are self sourced and distributed through Beacon Lighting's supply chain incorporating the warehouse in Melbourne and third party warehouse operations in Sydney, Brisbane, Perth and China. The third party warehouses stock and supply the local stores thereby improving service levels to stores and in turn customers. The China warehouse operation acts as a central storage facility for key lines for the Australian operation and also supplies the Beacon International wholesale business based in Hong Kong and with a showroom in China.
The supply chain is managed through an integrated point of sale and warehouse management system which automates the stock replenishment process. Stores sales are reconciled daily which triggers warehouse orders to be picked and despatched promptly reducing risk of out of stock items in stores.
The vertically integrated approach to bringing product into the business has enabled the Company to generate gross profit margins that capture the equivalent of the wholesale margin in addition to a retail margin whilst offering competitive pricing to customers.