Back from the Brink

Jun 03, 2023

Wangaratta in northern country Victoria seems an unlikely location to operate a successful furniture import and retail business, but that's exactly what the McPhail family does.

The COVID pandemic created a lot of angst for many businesses throughout the world and initially had a disastrous impact on the McPhail family operation, to the point that brothers Casey and Taylor McPhail actually considered closing down and going into the firewood business.

Fortuitously, they also realised the unique circumstances brought about by COVID lockdowns presented a once in a generation opportunity for them to expand their business by capitalising on the power of the internet.

Although the physical furniture store had been increasing in size for some time, the decision to parallel that growth with a stronger online presence exponentially opened up the level of enquiries which were subsequently converted into sales.

Obviously, McPhails wasn't alone in this so the brothers focused on providing a unique selling proposition by offering a flat rate fee of $59 per delivery to an area stretching from Queensland's Sunshine Coast to Adelaide as well as all of Victoria and New South Wales and the Australian Capital Territory.

In order to provide this level of service at such an attractive rate McPhail's operates its own fleet of Hino trucks including an increasing number of 500 Series supported by a pair of 300 Series pantechs which are mainly used for local deliveries in the Wangaratta area.

The rapid growth of the business over the past four years has led to the in-house transport division expanding to accommodate the inwards deliveries of up to 500 containers each year, mostly from Malaysia, India, Vietnam and China via the Port of Melbourne.

To meet this part of the demand McPhail's now have their own prime mover and two skel trailers and recently took delivery of a Freighter drop deck curtainsider.

The investment into the heavier side of the transport operation is offset by the reduction in container fees by being able to achieve timely returns of empty containers.

Future plans include running containers using an A-double configuration between Melbourne and Wangaratta.

Although Hino would normally be the preferred brand for McPhail's when looking to acquire their own prime mover, supply issues for the brand during 2022 were a factor in the decision to take delivery of a FM Volvo which became available when another local transport company cancelled the order and McPhails were able to acquire the production line slot.

The rapid growth of the operation and the requirement to hold suitable levels of stock led to the situation of using 22 separate leased or owned warehouses scattered throughout Wangaratta's industrial precincts.

To address the need for a centralised distribution centre McPhails has constructed a bespoke 8,000 square metre facility with all-weather receiving docks as well as despatch docks which have been specifically designed to suit the Hino rigids.

Casey and Taylor are already looking at doubling the size of the distribution centre in order to have more furniture stock on hand and ready for delivery.

Australia has experienced a number of shortages over the past few years, not the least of which had been difficulty in sourcing wooden pallets. To address this, and to reduce operating costs by eliminating pallet hire fees, McPhails has its own single- and double-pallets manufactured.

"During COVID we’d get enquiries about where we delivered to and we just said ‘yes’ to everything," says Casey. "People would see our trucks around, so we generated more sales and more deliveries."

The brothers found they were performing many of the deliveries themselves and all of the sales staff have been encouraged to obtain their heavy vehicle licences which assists with operational flexibility.

As the sales situation snowballed the drivers began posting images on social media of the trucks in various locations such as Parliament House in Canberra, under the Sydney Harbour Bridge, or with Melbourne's Southern Cross Station as a backdrop to demonstrate how the company ventured further from its home base.

"It helped build trust and belief in our brand," says Taylor. Social media has become an important component of the company's operations and McPhails have resisted suggestions to install ‘auto reply’ buttons which would cancel the opportunity for their sales team to diagnose the needs of a customer and to provide them with the best solution to their furniture requirements.

Strategically located billboards on major routes are also beginning to drive enquiries and the always clean presentation of the trucks sees them also in the role as mobile billboards.

Operating their own in-house fleet has given McPhails the flexibility to grow their business by providing a level of service probably not possible if using a third-party transport operation.

The trucks are not treated as profit centres but rather as key elements in the overall operation with customer service enhanced by having reliable late model trucks which are always well presented.

The furniture pieces they sell are not of the cheap flat pack variety and McPhail's recognise the level of quality of the furniture items they sell is as important as their service.

"We deal with around ten factories making our timber furniture through a designing and quality assurance company and we decide we want a certain design," explains Taylor. "They draw it all up, get the price, and handle all the packaging so we are able to cut out the distributor and wholesaler steps."

The current business is not restricted to being internet driven and the expansive showroom in Wangaratta sees many visitors, some of whom drive from hundreds of kilometers away to experience and select their furniture items first-hand.

The business has come a long way from when Casey and Taylor's late father Keith McPhail began doing removalist work in the 1960s and he found many people didn't want to take excess furniture with them when they relocated.

Rather than scrapping these items he used his auctioneering expertise from when he had been a stock agent to hold monthly auctions at the original warehouse located where today's modern retail shop stands.

As he progressed to selling new furniture Keith purchased his first Hino truck in the mid-eighties to transport furniture from Melbourne and the Hino brand has been the backbone of the transport operation ever since.

A 15,000-litre modular diesel fuelling facility has been installed and some of the Hinos have extra tanks fitted to negate the need to refuel on the road. The longer distance multiple-drop trips contribute to offsetting the costs of running the trucks and drivers. On a long run each truck may hold up to $50,000 retail value of furniture.

"We’ll often have up to 15 drops per load," says Casey.

The $59 delivery fee is not discounted simply because the trucks are going to a particular area.

"If we aren't running to somewhere like Adelaide we wouldn't have those sales, anyway," says Taylor.

Because their parents appreciated the power of advertising, in the past both Casey and Taylor appeared in television commercials aired locally.

As a six-year old, Taylor delivered what became the company's enduring catchcry: "Of course we do deliver!"

Almost 30 years later, that remains at the core of the family business.

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