June 03, 2019
Making shopping great again!
Discount king Silly Solly’s, where absolutely nothing retails for more than $5, is on a mission to “make shopping great again”. Shoppers and licensees are buying into this message big time.
There’s a retail revolution underway in regional Queensland at the moment.
Shoppers are going crazy at the prospect of buying brand name items at ridiculously low prices. It’s all down to an invading army of Silly Solly’s discount stores rolling out in quick succession through Mackay, Townsville, Gladstone, Cairns, Yeppoon and Ingham among other regional centres. With the credo of “nothing over $5”, the biggest problem, as far as Silly Solly’s director Steve Watchman is concerned, is “not enough cash registers”!
Solly Stanton started up the brand more than 20 years ago, but sold out to the Warehouse Group in 2000, and the name disappeared. The Kiwi retailers have long gone home, but Solly is still around and he decided the Silly Solly’s brand was too good not to have another bite of the discount retail pie. The brand relaunched in Rockhampton in 2017 and was an immediate hit with eager punters who couldn’t believe the quality of the goods they could purchase for $5 or less. Solly, self-described advisor/consultant/ troubleshooter to the company, reckons they’re looking at passing the 20-store mark pretty soon. “Most of our stores are in Queensland at the moment, but we are looking at expanding into NSW and Victoria,” he says. “We sell everything right across the board, in 15 different departments. Absolutely nothing costs more than $5. We’re trying to create a happy face for people, trying to make shopping great again.”
A simple concept
The concept is simple according to Steve. “It’s all about providing quality products at unbelievable prices and making the experience as fun as possible,” he says. “The licensee uses our brand, our extensive buying power, lines of credit and vast experience to own and operate their store the way they want.”
With his catchphrase “I know I’m silly, come and see why” Solly is also big on putting the fun factor into the shopping experience.
“Everyone else is taking things too seriously, but we’re just taking the piss out of ourselves,” he says. “Our customers are the salt of the earth, the backbone of Australia. And they keep returning on a weekly basis because we’re getting new and exciting products in all the time.
Australians have got a nose for a bargain and $5 goes a long way at Silly Solly’s. We aim to disrupt the market by offering quality goods at the lowest prices every day. It keeps everybody honest. We get very few customer complaints. No-one says, ‘this is too expensive!’”
Of course, the big question is how can Silly Solly’s sell stuff so cheaply without going broke?
A good supplier network certainly helps, says Steve.
“This is the question I get asked the most,” he laughs. “We have a team of buyers and networks across the globe constantly sourcing and developing new products. Our buying power is very strong and we have very good support from our domestic wholesalers, which we’ve built up over 30 years. That said, even our suppliers can’t believe it when we sell a product for $5, when other discounters are selling it for $15 or $20”.
“We’re always looking for what’s hot and trending — and we’re looking for loss leaders,” adds Solly. “We’ve had a lot of the suppliers for years. The parents have handed the businesses on to their children and now they’re in the game.”
The business is not run along franchise lines, but rather prospective owners acquire a Silly Solly’s licence, a business model all concerned seem to find cheaper and less complicated to operate.
According to Steve, “Franchise Agreements can be very rigid, with everything run strictly by the franchisor. With our licence model, the licensee runs the business the way they want, and makes all decisions relating to their own store and location. We support and advise them as much or as little as they like, but at the end of the day, they make all the decisions.”
According to Solly, there’s certainly no shortage of wannabe owners
“We don’t have glossy documents, we’re not going to pump it up and spin you a story. In our last sales campaign we had more than 50 enquiries from people wanting to start, mostly people getting into business for the first time.”
He reckons the simplicity of the licence model is a big plus. “They see this as a simple concept and they want to get into it,” Solly says. “They know how much money you need, how much stock. We tell people to go to one of the stores and talk to the owners and the customers. Just have a look at what they’re taking and how the stock comes in the back.”
The entry costs for the licence model are also considerably cheaper than a franchise, Solly notes. “Where with a franchise you’ll pay maybe 11 per cent, maybe eight per cent for the royalty and three percent for marketing as an example, we just charge a flat three per cent,” he says.
“The amount you need to get started depends on the location. Sometimes we can just take over a shop that’s already got the fixtures and fittings. We normally charge around $45,000 for the licence fee and that gets them our help with the site location. We’ll find them the right site, and negotiate the rent.”
Landlords are often helping to lower entry costs
He reckons that such is the current power of the Silly Solly’s brand that sometimes landlords will actually contribute to the establishment costs of a new store.
“They want us, so occasionally they’ll make a contribution to the fit-out and stuff like that. It’s definitely more attractive to people in terms of startup costs than a franchise.”
Solly notes volume is king and the stock in a Silly Solly’s outlet turns over faster than most, so you’ve got to be prepared to work hard.
“We have very quick stock turns,” he says. “You’ve got to be handling cash these days so the stock turns are really, really big. You get the stock in and you’re moving it fast. The higher sales volume brings your rent and expenses down to a level that’s sustainable. The harder you work, the luckier you get.”
Positive — and frequent — media coverage has certainly played a major role in the second coming of Silly Solly’s. People are voting with their feet, turning up to the discount stores in massive numbers, which in turn guarantees media interest. And it’s no beat-up. Solly says that before the store opening in Townsville, their Facebook page attracted 50,000 views.
“Who gets that?” he says. “Some of the press is incredible. We’re pretty well known because we’re always on TV, but we get a lot of coverage because there’s nothing else like us. Nobody’s done this before — licensing discount stores. It’s quite unique because very rarely does a store name include a price. People know exactly what they’re getting with us — nothing over $5.”
Solly says it helped taking online shopping out of the equation. No-one is checking out Silly Solly’s stock and taking pictures to compare prices online.
“In our stores people know they’re paying the right price,” he says. “We’re making life simple for people. They don’t have to do a whole lot of research on the stock we sell. They’re not spending big money. It doesn’t get much simpler than this.
We’ve got deals with some of Australia’s biggest manufacturers. Like a Finish 68-pack (dishwasher tablets) that normally sells for $20, we’re selling for $5. A packet of Tim Tams, $1.
We give our punters those rewards and everybody’s happy — the punters, the store owners, the suppliers.”
This combination of consumer loyalty and supplier support is what makes Silly Solly’s low- margin, high-volume model work spectacularly well.
“It’s been proven that the model works,” Solly says. “Having several stores in the same town is not a problem, because they target different demographics and can be different sizes. The stores don’t have to be huge — we can do express stores.
The shopping centres are also starting to court us now — I get three or four calls a day. They want something exciting to drive foot traffic. We have huge support from our suppliers and our buying power is so good. You wouldn’t believe how much stock we’re churning through. Some of the stores up north sell 40,000 products in a week. The logistics of that are mind-boggling. Happy days are here again!”
