Barbeques Galore, established in the United States in 1980, stands as the nation's largest specialty retailer of grills and outdoor living products. With a 45-year history, they boast a strong presence in California, Nevada, Arizona and Texas through their retail stores.
Mitchell Koureas joined Barbeques Galore in 2010. As the CFO, he shoulders a diverse set of responsibilities. These include formulating operational and financial strategies, evaluating opportunities for organic growth and acquisitions, overseeing people and culture, as well as handling legal, governance and risk management matters. Mitchell's invaluable contributions have been pivotal in driving the company's growth initiatives, firmly establishing Barbeques Galore as a leader in the barbecue market.
Rebate Strategy has Evolved
Barbeques Galore employs a diverse array of strategically designed rebate programs to influence specific behaviors. These rebates are acquired through supplier arrangements, establishing a strong and motivated group of suppliers who are encouraged to actively promote their brands and drive sales volume through Barbeques Galore.
Barbeques Galore also offers rebates to their franchisees and selected wholesale customers, motivating them to increase sales volume and enhance their presence on shop floors. These rebates form a critical part of their go-to-market strategy, fostering fruitful relationships with both suppliers and customers.
In addition to their traditional use of rebates as a transactional tool for managing stock and in-store units, Barbeques Galore is evolving its approach to focus more on services. As they enhance the value of these services, they are also finding ways to reduce costs, particularly as volumes grow. This shift opens up new opportunities in areas like transport providers, logistics and marketing agencies, expanding their horizons and redefining their business landscape.
Koureas says, “Initially, rebates were not regarded as a critical aspect of our business dealings with key suppliers and customers. However, we have since developed a method that allows us to incentivize both ends, creating a mutually beneficial and collaborative partnership.“
He continues, “Rebates are now becoming a crucial element in how we cultivate relationships with both vendors and customers. As we also operate as a wholesaler, we can leverage rebates to incentivize increased volume and desired behaviors from our partners, encouraging them to conduct more business with us. In essence, rebates have become a pivotal aspect of our strategy, enabling us to shape our partnerships and drive business growth.”
Streamlining Contract Negotiations
As a vertically integrated retailer, Barbeques Galore sources products from factories in Southeast Asia and directly ships them to Australia for sale. Despite their successful business model, one area that required improvement was the level of maturity in negotiating terms with suppliers. Traditionally, negotiations were managed through PDF documents and Excel spreadsheets, which sometimes led to inefficiencies and challenges when updating and maintaining important financial arrangements amounting to millions of dollars.
The challenge lies in encouraging their negotiating teams to view rebates as a lever that can be effectively utilized. However, with the implementation of the Enable platform, the transition from spreadsheets to a more comprehensive and user-friendly tool has been initiated. Koureas says, “This platform enables our negotiators to see tangible and clear incentives and benefits, encouraging them to engage more proactively in utilizing rebates as a strategic asset.”
Barbeques Galore is determined to enhance their negotiation processes and leverage rebates as a key driver for growth, fostering stronger and more rewarding relationships with their suppliers for the collective benefit of both parties.
Barbeques Galore encountered many challenges with spreadsheets due to their static nature. The supplier agreements, which often came in a PDF format, would end up signed or forgotten in someone's drawer, and the crucial elements of those agreements were not adequately presented in an intuitive platform. Reliance on human intervention within spreadsheets made the process cumbersome.
Koureas says, “In the past, when a supplier or customer contested a rebate, our team members would often choose the path of least resistance—either backing away from the conversation or offering alternative benefits to appease the situation. However, with the implementation of Enable, the complexities surrounding rebate arrangements have been illuminated. This platform has empowered us to proactively manage these relationships and drive them towards more beneficial outcomes.”
Disputes Were Common
Barbeques Galore faced numerous disputes, and in such situations team members would often take an easy way out by conceding on the rebate if offered some other benefit in return. This approach led to them missing out on what they were actually entitled to receive as part of the partnership. Consequently, they were losing out on both the rebate itself and the potential add-ons that should have been rightfully theirs.
Koureas says, “It is difficult to ascertain the total value of the rebates we might have missed out on, which is a concerning aspect of this situation. The uncertainty surrounding the extent of our losses is unsettling, as we can't accurately gauge the full impact on our revenue.”
Breaking Down Silos
The platform has effectively broken-down silos within Barbeques Galore, facilitating cross-functional collaboration. It has proven to be a valuable tool in fostering communication and collaboration with suppliers. With an integrated platform accessible to everyone, it serves as a lever for driving these collaborative conversations.
Koureas says, “Transitioning from Excel spreadsheets to a platform like Enable has proven to be highly advantageous for us, as it significantly enhances the level of maturity in our approach to engaging with suppliers in the market.”
The significance of having a platform like Enable lies in its role as a centralized repository for all Barbeque Galore’s agreements, intricately connected to data. This integration allows the team to make well-informed decisions based on data, ensuring that the outcomes align with the agreed terms. Enable removes the human element and biases from their conversations. It treats the process as purely transactional, focusing on the existing arrangement, available data, and invoices.
As a result, Barbeques Galore experienced a remarkable 250% increase in rebate gains and 5% margin improvement, a growth directly linked to their adoption of a more sophisticated and data-centric strategy. This transition has played a pivotal role in enhancing their negotiation strategies. By relying on data, the company has achieved more fruitful and mutually beneficial agreements.
Koureas explains, “The data-driven nature of the platform has been instrumental in generating more revenue and additional income through increased volume. We no longer struggle with manual processes or subjective negotiations; instead, we rely on concrete data to guide our interactions with suppliers. This has transformed the way we engage with them, leading to more productive and beneficial conversations for all parties involved.”
Comprehensive Reporting and Dashboards
Enable further empowers the Barbeques Galore team with comprehensive reporting and dashboards, enabling them to monitor team activities and provide valuable support during negotiations. Koureas explains, “For instance, if a customer reduces volume, we can promptly address the issue. Similarly, if a customer increases volume but reduces net margins, we can quickly take action. The real-time capability of Enable to surface such insights is indispensable and crucial to the success of our business.”
Real Time Insights and Analysis
With real-time data inside the rebate management platform positioned alongside existing BI tools, Barbeques Galore can gain insights and analysis on various aspects of the business. This particular area used to be somewhat obscure, but now they can anticipate challenges, negotiate more effectively, and empower their merchandise team to secure the best deals. Koureas says, “I believe the core aspect lies in the capability to uncover what's happening behind the scenes. Through data-driven visibility, we avoid relying on gut feelings or subjective behaviors, which can be risky. Instead, we make informed decisions, ensuring a more successful and confident approach to our rebates and business operations.”
Creating Win-Win Scenarios with Vendors
Barbeques Galore is concentrating on developing its business with select suppliers, leading to vendor consolidation and prioritizing partners who actively support their business and value the strong relationship they have with their end consumers.
Koureas says, “Our emphasis on authentic partnerships has effectively leveraged Barbeques Galore's unique position in the market. Through more genuine collaborations with suppliers, we have tapped into the inherent value of their relationship with end consumers, which suppliers view as a valuable asset. Consequently, we are experiencing greater success with our rebate initiatives, fostering a win-win situation for both us and our suppliers.”
Recognizing the need to further progress in terms of rebate maturity, Barbeques Galore acknowledges the powerful potential of rebates as a tool that benefits both sides of the business relationship. Koureas explains, “Our goal is to utilize rebates to drive growth for suppliers while simultaneously fractionating costs as that growth occurs, creating a win-win scenario for all parties involved. We believe that aligning our growth with that of our suppliers and sharing the resulting benefits will foster stronger partnerships.”
During an in-depth market review conducted by Barbeques Galore, various platform providers were assessed. Koureas says, “Enable stood out due to its exceptional value-add: a seamless integration, intuitive interface, and the ability to instantly compare supplier arrangements in real-time with just a simple click. This feature was of utmost importance to us. In a conversation with CEO Andrew Butt, he presented a truly compelling promise to us as customers, further solidifying our decision to choose Enable as our preferred platform provider.”
First Class Support
Koureas says, "Enable's support has been truly exceptional, providing us with first-class assistance. As one of the earliest customers in Australia, we joined when their on-the-ground team was still taking shape. However, even from the beginning and throughout our collaboration, working with Enable has been seamlessly coordinated, like a perfect hand-in-glove experience."
Looking Towards the Future
At Barbeques Galore, rebates are presently limited to stock inventory and sales parts, while other sectors, such as operational service providers, do not currently participate in rebate arrangements. This absence of rebates fosters a purely transactional dynamic, where pricing is solely determined by the unit quantity, lacking the potential for a mutually beneficial partnership as volumes increase.
“Our goal is to expand our reach and incorporate rebates more comprehensively to stimulate the ‘mutual benefit’ results for both partners. We aim to leverage rebates to adjust costs as volumes increase.. As our partners' business with us grows, we want our unit price to decrease accordingly. However, at present, we lack the visibility to make this happen. By integrating the Enable system into our ecosystem, we can unlock this value and establish a more efficient and mutually beneficial relationship with our partners.”
Barbeques Galore experienced a significant 250% increase in rebate gains.
Enable has empowered Barbeques Galore to proactively manage rebate relationships, reducing the number of disputes and ensuring that the company receives its entitled rebates.
Barbeques Galore is concentrating on developing genuine partnerships with suppliers, leading to vendor consolidation and creating win-win scenarios for both parties.