Snell · industrial packaging, safety and consumables distribution · New Zealand

A $1.335M cost-to-serve problem, halved through a multi-year turnaround.

Snell distributes industrial packaging, safety, and consumables across the New Zealand business market. Like most distributors at scale, its profitability lived in the detail of who it served and how. CostCtrl made that detail visible, and Snell acted on it.

The challenge

Snell is a 115-person distributor serving thousands of New Zealand businesses with packaging, safety, and consumables. It's an operationally complex model: a wide product range, a long tail of customers, and a cost-to-serve that varies enormously depending on order size, product mix, and how each customer trades.

Like most distributors, Snell's P&L was healthy in aggregate but silent on the detail. It couldn't show which customers and products were genuinely contributing once the full cost of serving them, picking, packing, shipping, and supporting, was accounted for. That's not a failing unique to Snell; it's the blind spot in almost every distribution business. The difference is that Snell decided to look.

The approach

• A structured operating model of the business.

  Working with Snell's team, CostCtrl mapped revenue streams, activities, cost pools, products, and customers into a single operating model: a consistent, explainable view of where every dollar of cost actually went.

• Connecting the data Snell already had.

  Financials from the accounting system, plus operational and transactional data describing how customers actually traded. No new IT project, no replatforming.

• Attributing cost to where it was consumed.

  The allocation engine attributed operational cost down to individual customers and products, turning thousands of transactions into a clear cost-to-serve picture. The first model revealed that 830 of Snell's 1,951 customers were contributing negatively to profitability once true costs were attributed, a combined $1.335M.

• A turnaround programme, not a one-off report.

  Rather than treating the result as a list of customers to cut, Snell used it as a roadmap. The insight became an ongoing programme of pricing, product, and customer decisions, revisited as the model updated.

What Snell did with it

The number on its own changes nothing. What mattered was the sequence of deliberate decisions it enabled:

• Re-priced where the economics didn't work. Targeted price changes on loss-making product-and-customer combinations, grounded in actual cost-to-serve rather than guesswork.
• Leaned into genuine strengths. Refocused on products where Snell had real buying power and where the product and customer behaviour, larger volumes for example, naturally covered the cost to serve.
• Matched effort to where Snell adds value. Prioritised customer industries where Snell's strengths translate into value for the customer at a sustainable margin, and stepped back from areas where it was being drawn into unprofitable trading just to hold volume.
• Encouraged trading patterns that help both sides. Worked with customers to consolidate many small orders into fewer larger ones, lowering the cost of picking, packing, and shipping for Snell, and simplifying receipting for the customer.
• Became the consolidated vendor. Won business by replacing multiple disparate suppliers, building scaled, efficient relationships in place of fragmented ones.

The outcome

The loss-making cohort has been cut by roughly half: the $1.335M of negative contribution identified at the outset is now around $665K, and the number of negatively-contributing customers has fallen from 830 to 295, with most of those now close to break-even.

This wasn't achieved by simply walking away from customers. Every customer still contributes to covering Snell's fixed cost base, so the goal was to turn relationships around, not to pretend the costs disappear if a customer does. The major loss-makers have either been turned around or, where there was no viable path, wound down deliberately. The remaining gap is understood, quantified, and managed, which is a fundamentally different position from not knowing it existed.

Why it worked

The model didn't just produce an answer; it gave Snell a permanent way of seeing the business. Cost-to-serve stopped being an annual mystery and became a lens applied to pricing, product focus, and customer strategy on an ongoing basis.

CostCtrl gave us a view of our business we'd never had: which customers and products were actually contributing, once you accounted for everything it took to serve them. That visibility changed how we price, what we focus on, and how we work with customers. It's become part of how we run the business.