Play Around Again Toys specializes in selling previously used toys on consignment. Customers bring in their used toys and agree to pay a 45 percent commission once the toys are sold. The company advertises in the local newspapers and on the Play Around Toys' website. The company also benefits from repeat customers and word-ofmouth advertising. To set the pricing for items, the staff uses information from customers such as original cost, age, and history. The staff combines this information with its own experience and current resale value to determine the price. All consigned items are subject to scheduled markdowns. All consignment contracts are valid for 90 days.
A customer entering the store is greeted by a staff member, who manually fills a form with information such as the customer's name, address and telephone number, date of visit, items to sell, and where they heard of the company.
If the customer decides to sell the items, the staff member fills out a manual agreement. Large yellow tags are placed on each item indicating the date the item came into the shop. As part of their daily routine, staff members are required to check all tags and rotate, reduce pricing, or remove items from the shelves.
Play Around Again Toys does not believe it has enough information about its customers. The company cannot contact customers for repeat business. In addition, managers find that items often stay on the shelves longer than 90 days. The company is forced to purchase the items that are lost. Executive management cannot easily determine which advertising vehicle is producing the most revenue.