Both teams hoped to savour the sweet smell of success in this week’s home fragrance task making and selling reed diffusers and candles, but instead we again saw two candidates’ hopes snuffed out in a close contest between two distinctly different strategies.
Arse (covered or otherwise)
Sell for profit, rake it in
James gets sales but not the win
Lindsay finds it all too much
While Nurun lacks the selling touch
The teams are summoned to the Royal Exchange in the heart of the City, home to luxury goods brands such as Tiffany, Montblanc and Gucci. (Last week’s firee Robert Goodwin would probably still regard it as cheap, tatty and beneath him, though.). Lord Sugar asks them to create designer home fragrance products – scented candles and reed diffusers – for sale to both trade and general public. He notes pointedly that this task is all about profit, on which basis victory will be determined.
Did you hear that, candidates? Profit. Not sales. P-R-O-F-I-T.
With the boys now outnumbered ten to seven, Sugar engineers an Apprenti-Shuffle, moving Steven Ugoalah, Daniel Lassman and Felipe Alviar-Baquero to Tenacity alongside Ella Jade Bitton, Jemma Bird, Katie Bulmer-Cooke, Lauren Riley, Pamela Uddin and Sarah Dales. Meanwhile Lindsay Booth, Roisin Hogan, Nurun Ahmed and Bianca Miller join forces with James Hill, Mark Wright, Sanjay Sood-Smith and Solomon Akhtar on Summit. (Got that? There’ll be a test later.)
Katie, who buys a lot of this type of product, volunteers as Tenacity’s project manager, while Roisin, who thinks her skills as an accountant will be useful in a profit-driven task, leads Summit. The two drive markedly different approaches: while Katie wants to keep things relatively inexpensive, Roisin is all about creating an expensive-looking brand.
As the PMs start to select sub-teams, Nurun states that she’s not confident about creating fragrances – to which Bianca dismissively observes “we can all smell”. This is the same Bianca who last week needed to be told that solar panels won’t work if they’re underneath a jacket. Pot, kettle.
Roisin adds that she doesn’t want anyone on her team covering their arses. Sanjay breaks into a grin, possibly daydreaming of uncovered arses. He’s also pleased to see off who he considers to be the three weakest boys (Steven, Daniel and Felipe). And if you don’t recognise that as the kind of statement that comes back to bite you on your (uncovered) arse, you haven’t been watching the show closely enough over the years.
Best of British?
On day one, the teams split up to conduct market research, create and manufacture the product, devise branding and make one initial sales pitch. Day two is all about public and trade sales.
Katie sends Lauren’s sub-team to conduct research which tells them to use plain colours and soy rather than paraffin for their candles. She promptly ignores this, relying on her own experiences as a consumer and focussing on minimising costs to maximise profit. They christen their green tea, aloe vera and lemongrass-scented brand British Breeze. As Nick Hewer notes with a raised eyebrow:
Green tea from China. aloe vera from Africa, lemongrass Thailand. Oh, let’s call it British Breeze.
It could have been worse. They could have gone with one of Sarah’s suggestions of Lemonise or Yellow Submarine. Presumably she’d have wanted to slice any Lemonise product.
Roisin’s team settle on Beach Dreams (meh). She has a firm vision of creating a top quality brand, but then sets relatively unambitious pricing. By contrast, Katie is firm about pushing for maximum mark-ups all the way, with Sarah voicing concerns about the price being too high. This from the woman who tried to sell a couple of plastic bowls, toilet brushes, Marigolds and cleaning spray to London Zoo for £250. O-kaaay.
Her manufacturing sub-team relies on Sanjay to work out the right quantities of their ingredients (a task which season five winner Yasmina Siadatan spectacularly failed at). Lindsay and Nurun watch in admiration as if he was writing up the Theory of Relativity on the whiteboard. Neither of them are going to be threatening Rachel Riley’s job on Countdown any time soon.
Indeed, in terms of proving her worth as a candidate, Lindsay is a case study in what not to do, coming up with such genius soundbites as:
Yeah, we can’t all be intelligent.
I’m quite happy for you to do it all.
Oh dear. No wonder Karren Brady identifies her and Nurun as the two weak links on the team.
Sales versus profit
When it comes to the selling portion of the task, Katie sets ambitiously high pricing and a clear strategy while Roisin sets her prices lower but gives sub-team leader James a much looser brief in terms of how much he can discount.
So while Lauren’s retail team struggles to shift product at two different locations, James’s sub-team arrives at Greenwich Market and starts slashing prices like there’s no tomorrow.
A sale’s a sale. There’s no such thing as bad profit.
Perhaps not, James, but there is such a thing as not enough profit.
The most notable laggard for Tenacity is Sarah, who frustrates Lauren with her attitude and then insists their pricing is too high, even though Daniel and Pamela make sales. With Summit there’s a notable boy/girl divide, with market trader Nurun struggling to make much impact and Lindsay doing her best to hide altogether. James and Solomon shift plenty of volume, but the former in particular is slashing prices at every opportunity.
The teams’ trade appointments range from a small gift shop to the swanky Goring Hotel in Belgravia and private members’ club Home House in Marylebone. Katie’s sub-team, despite some hiccups with wonky labels, sells well at good prices, closing one deal at a Mayfair nightclub that nets £920. Roisin’s team offloads most of their stock at a knock-down price at the gift shop, meaning they cannot fulfil a deal arranged at the Goring by James the previous evening.
In fact, while Katie’s strategy is executed consistently, delivering high margins at the expense of selling fewer units, Roisin’s strategy goes out of the window, with different team members at their market stall selling at different prices, and the emphasis being on shifting product at all costs. If control is Tenacity’s watchword, then Summit’s is … panic?
In the boardroom, the team are pleased because they sold out but Roisin comes under fire for her woolly pricing policy
Sugar is unimpressed by Katie ignoring her market research, while Sarah draws attention to herself for her inept sales performance as the Baron of Business quips:
Never mind aloe vera, sounds like it’s goodbye Sarah.
As Sugar calls for the results, James seems so relaxed that he starts doing stretches, for which he receives a ticking off. He’s in for a nasty surprise though, as the numbers reveal that Summit sold £2,177 worth of goods and made a profit of £1,569.32. However Tenacity, despite finishing with unsold stock, sold £2,217.35 for a profit of £1,584.09 – £14.77 more than Summit or, basically, one candle.
The result is so close that an uncertain Ella has to check, “We won?” They have – and that’s three wins out of three for the team formerly known as Decadence, for which they are sent off to a luxury spa to sip champagne in a jacuzzi.
Summit head to the Cafe of Broken Dreams, where Roisin expresses her bitter disappointment and James throws Lindsay under the bus, before returning to the boardroom where Sugar hammers home the point about this task being all about P-R-O-F-I-T and the difference in the teams’ average selling prices: £16 for Tenacity versus just £9.50 for Summit.
No focus on the margins. No focus on pricing control. Panic selling – panic, like a fire sale.
James seems unable to accept that his insistence on deals was a contributing factor to the team’s failure, and he further angers Sugar by constantly comparing himself to him. Sugar observes that anyone can sell by slashing prices. Except for Lindsay or Sarah, perhaps.
Nurun sold just £92, Lindsay a paltry £12. Mark, who is fast becoming something of a boardroom assassin, turns the screw on Lindsay, calling her “just an empty seat”, while Sugar weighs in, referring to the swimming instructor as drowning, being surrounded by sharks and treading water all in the same breath. Although I’m not sure how you can be treading water and drowning simultaneously.
On the point of tears, Lindsay admits:
I’m sorry to say I’ve not done very well. I’m disappointed in myself.
She would probably have quit of her own accord, but Sugar fires her anyway and we don’t even get to see her piece to camera in the Taxi to Obscurity. She does get a sympathetic version of the ‘you’re fired’ music though. And hopefully some of Tenacity’s unsold candles to soothe away the stresses of a process she was unfortunately just not fit for.
With the rest of her team still on the hook, Roisin brings back Nurun and James. Sugar continues to hammer Roisin for not controlling her team’s pricing. He expresses his surprise at Nurun’s poor sales, dismisses her win as PM last week as lucky and wonders if it’s too big a transition for her to move up from running a market stall to a proper business. As for wide-boy James, he’s told he needs to stop talking so much and the subject of his dodgy pricing ethics is also raised. Sugar, who’s on top punning form this week, clarifies:
Just so there’s no confusion, ethics is not where Southend or Colchester is.
But Sugar recognises the potential for a good redemption arc when he sees one, so James survives and instead the Digit of Doom points in Nurun’s direction. Unlike Lindsay, she does get to say her piece:
I’m a bit sad the dream has ended so soon. Lord Sugar definitely overlooked my potential. In that boardroom I definitely think James got lucky there.
He definitely did get lucky, but equally Nurun has no one to blame but herself after two weak tasks in a row.
Particularly in tasks involving high margin products, high prices generally trump high volumes when it comes to generating the most profit, although in this case it ended up too close to call. (The opposite tends to be true when margins are low, where volume is key to profitability.)
However, here the distinction is more blurred as the margin of victory was so small as to make the two teams’ strategies essentially on a par. But let’s look at how easily Summit’s pricing could have swung the task.
The numbers stated in the episode suggest that, at an average price of around £9.50, they sold 230 units. If they had achieved Tenacity’s average price of £16, they would only have needed to sell 118 units – barely half their stock – to have beaten their rivals’ profits. Even at £12, selling 170 out of 230 units would have sealed victory.
If Roisin had thought through her numbers properly and been able to get James to listen – the latter being a big if, admittedly – the danger of shifting product at any cost would have been clear. Having said that, if she herself hadn’t offloaded most of her sub-team’s stock at the first opportunity and held back enough to at least fulfil the Goring Hotel’s provisional order – at a significantly higher price – that would have been enough to snatch victory from the jaws of defeat too.
It was an unusual pricing strategy, to say the least. When you start selling at a low price, you’re left with nowhere to go. Better to start high and then adjust your prices down depending on levels of demand and the time of day. The time for deep discounting is at the end of the selling day, not the beginning.
It’s not made clear in the episode, but Tenacity were also far from perfect. Given their sales and their average price, it appears they only shifted 60% of their stock (assuming they produced the same number of units as Summit). That suggests that Katie’s pricing erred on the high side initially – which is fine – but she should probably have reacted to this during the afternoon by either relaxing her control on pricing, particularly with a retail team who ended the day demoralised, or switching the excess stock more quickly to the trade side in an attempt to offload a big bulk sale.
Of course, it’s much easier for viewers’ benefit to portray one team being right and the other as wrong rather than the reality of dealing with shades of imperfection. But overall Tenacity deserved to win for having a clear, bold strategy to start with, whereas Summit put themselves in a hole they couldn’t quite get out of.
Next time: The teams launch their own online video channels. YouTube may never be the same again after these video nasties.