How we managed during a market crash
IRE News

How we managed during a market crash

DA

The recent market crash took many in the industry by surprise. We discuss how we’ve managed to maintain our business and find ways to achieve growth, even with the odds against us.

Investing in stock

Like all of us in the energy sector, demand from our regular orders slowed during the worst of the market crash. We pride ourselves on having a constant stream of inventory coming in, so we’re always able to quickly fill customer orders. However, during the crisis, the cost of transit increased to the point where air freight usage decreased by 19% year on year.

To address this, we focussed on high-value inventory and maintained our investment in new stock. These new product lines included fast-moving goods and critical items, which saw many customers favour us as we had the equipment they needed already on the ground.

As well as increasing our own revenue, our approach cemented our customers’ trust in the service we deliver. The fact we were able to maintain that high-quality service and deliver goods when clients needed them most is what has helped us maintain our relationships through this period.

Diversifying product lines

To generate new streams of income, we immediately started exploring new ways to expand our customer base. Across the industry, many rigs were stacked due to decrease in demand for oil. This slow-down meant that customer requirements for parts, spares and services changed almost overnight.

Working with our partners, we identified new product areas and service opportunities we hadn’t previously offered. By proactively diversifying our range, we were able to support our partners by sending new orders their way and also create new connections with customers across the industry.

By adapting to fit the needs of the industry, we were able to provide innovative solutions to our clients’ problems and deliver the same level of knowledge and service we always have.

Training our team

When you introduce new stock, it’s also important to ensure that your whole team is fully aware of the features and benefits of each new product. Over this period, we’ve held regular training events with our partners. These included video sessions with our most recent partner supplier, Ranger Oilfield Supplies. The sessions were a great insight into the 30-year history that makes Ranger such a valuable partner.

As well as learning the specifications of a product, we always get into the science behind each piece of equipment. This means we’re always on hand to offer expert advice to help customers choose the right stock for their needs.

Our video sessions also had an unexpected benefit. While we still prefer face to face contact with our partners and customers, our Zoom training meant we reduced expenditure on travel, accommodation and other necessities by up to 20%. It also gave us the opportunity to train more staff at once.

Incentivising

With a close eye on budgets, we have found that many of our customers are still hesitant to spend on new inventory. Unfortunately, it has meant many are leaving themselves dangerously low in supplies.

Good communication is what makes our customers keep returning to us, so we simply asked them what they need at this time. By offering early payment discounts, we helped accommodate our customers’ financial constraints but also ensured sustained income for the business.

To support these discounts, we worked with our suppliers to cut costs, which allowed us to reduce our own margins, offer further discounts and remain competitive for customers.

Using our assets

Our business is built on our expertise in oil and gas equipment and services, but we have other assets too. We didn’t have to look far to see some that were not being used to their full potential.

We’re based in a fantastic brand new 5000m2 facility in the Jebel Ali Freezone. With only 40 percent of our yard currently in use, we saw this as the ideal opportunity to offer storage space at competitive prices to our customers, service companies and fellow suppliers.

To make the most of the space we are using, our new ERP system has allowed us to analyse and monitor purchasing data so we can efficiently keep our shelves filled with the most popular products.

Behind the scenes

None of the above is achievable without our entire team giving 110 percent throughout this whole process. Together, we’ve ensured that open and honest communication runs all the way from our CEO to junior staff.

While our senior management team previously held shareholder meetings monthly and quarterly, we moved this to a weekly meeting to get a live look at our operations. This has ensured we’re quickly recognising and acting on any new opportunities for growth.

We also intensified the way we look at our finances, keeping an eye on every cent to ensure it is used for maximum returns. By closely analysing our profits, losses, quotes and orders, we’re able to get an oversight of our weekly income and see how we can put it back into the business to achieve immediate growth.

If you’d like to discuss ways you can save money while making the most of your equipment, contact us here.

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