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Adult Toy Megastore is busy consolidating into a 3500 sq m warehouse with 7 m stud height just outside Wellington – premises that will make a significant difference to the business

Risqué business –
By Nigel Parry

Kiwis have a reputation for being a rather reserved lot. But judging by a healthy swelling in sales over the past few years, when the bedroom curtains are drawn we get up to all sorts of fun, with the help of a few adult toys. – Photographs by Nigel Lloyd Parry – www.nigelphoto.co.nz

From rather quiet and humble beginnings, Adult Toy Megastore has quickly grown to be the market leader in New Zealand. The numbers of product lines have enlarged along the way, now stretching to 15,000.

“One of the biggest changes in our business has been the quality and breadth of our range – it’s our number one point of difference,” says Craig Relph, director of Adult Toy Megastore. 

For each product there can be hundreds of variations. “We do seem to be expanding our boudoir repertoire. A lot of people are just exploring – there’s not a lot of knowledge about adult toys. When people see something on our website that sparks their interest, it enters their thinking and they’re more likely to try something new. It’s about understanding what’s available,” he says.

The organisation certainly sees a surge whenever an adult novelty toy is featured on a famous film or TV show, such as Fifty Shades of Grey. That one movie was responsible for a sudden spike in what is normally a steady order stream. “And whenever things like that get shown on TV or film, the idea of using that becomes more normalised,” says Mr Relph. “It becomes part of a number of product lines which are frequently ordered.”

Unique offering

The operation receives hundreds of orders every day and the average parcel has 2.3 items, mostly of a similar size. While the typical price of a product is around $90–$100, people can splash out more if they wish – such as a gold-plated vibrator with a $3000 price tag.

“Occasionally we do ship worldwide, but we don’t focus on marketing outside of New Zealand and Australia at present. In New Zealand we are number one online and I’d definitely say we are the largest retailer of our kinds of products,” says Mr Relph.

“What we do is fairly unique. Online is such a different market to physical retail. We wanted to go purely online and do it really well right from the start.”

At the outset a decade ago, 350 sq m was plenty of space. However, that became just the rapid dispatch area as the company quickly burst out of the confines of its original site. Another 600 sq m of space was acquired, but that quickly filled as well. Piecemeal expansion has seen the company spread across four small sites around Wellington, and the decision was taken to consolidate in the face of continued growth.

Finding the right site

“We started out on the hunt for a site a year ago. Wellington is not a particularly good place to find good-quality warehousing, and during the time we were looking, our requirement for space actually doubled,” claims Mr Relph. “We’ve now found the right site, but I’d say that it was one of the hardest things we have encountered as a business.”

The company is busy consolidating into a 3500 sq m warehouse with 7 m stud height built in 1976, located in Grenada North just outside Wellington. Mr Relph is expecting it to make a significant difference to the business. For example, in the previous piecemeal operation, one full-time store person spent their whole day just going between sites bringing stock to the rapid dispatch area. 

The company is also proud of their efficient operation which runs with very few office staff, so were pleased to find a site where almost all the space is warehousing rather than the more typical arrangement in many available buildings where one-third was configured as office space.

Old pallet racking, existing when the company acquired the building, is gradually being removed and replaced with racking and shelving from the company’s existing sites, with new shelving and tote bins added to meet the pick-pack operations with the size of products they typically handle. The finish to the floors is also being improved. Consolidation of the business to the site is expected to take three months overall from start to finish.

Slick storage and dispatch

Next in line will be in-house developed barcode scanning and RF order picking, replacing the existing paper-based approach. Their processing system already includes data on every single product they handle. As each one is added to the range, it is weighed and measured so that the company can instantly identify the shipping cost, even for combined orders.

“There are plenty of benefits to being that detailed. We are very slick about what space products need in the warehouse. For example, if 120 units arrive we know exactly what space that requires on the shelf,” says Mr Relph.

The order processing and management system links directly to the back end of the online retail store so the minute that somebody purchases a product, it is immediately allocated from warehouse stock.

The system can also automatically put orders through to suppliers at the push of a button, and make the most use of funds by very tightly managing stock levels. That is especially important as the majority of suppliers are based in the US and shipping times are typically four weeks from order.

That lead time is fairly steady, although the company jokes that the shipments tend to get more than their fair share of inspections as items pique the interest of customs.

Discretion essential

When conversion is complete, the Adult Toy Megastore distribution centre will have 20,000 bin locations and six packing stations. Multiple trolley picks happen throughout each day, with pickers collecting up to 500 items at a time. 

These are then taken to the consolidation and sortation area where individual products are picked and packed for dispatch. The processing system automatically prints out courier labels, including size and weight details.

“We’re completely different in the way we do things,” states Mr Relph. “We always make sure that the contents of the package can’t be identified – it’s a market where discretion is essential.” That includes packing some products which might have an interesting or giveaway shape, including extra cardboard and bubble-wrap to make sure that the courier package remains totally nondescript.

Located very close to State Highway 1, Adult Toy Megastore is taking advantage of logistics links, including to their largest market, Auckland. However, in terms of sales per member of the population (per capita), apparently New Plymouth is a hive of activity when the curtains are closed, according to Craig Relph.

From the outside of the Adult Toy Megastore building, you wouldn’t realise what is going on behind closed doors. Much like our homes, apparently.

Award-winning journalist Nigel Parry started writing for FTD over ten years ago, and has been covering logistics and supply chain issues in a number of countries for more than two decades; he can be contacted at nigel.parry@gmail.com

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