2018 is over. Here’s how it went…

Compliance

2018 was the year of Compliance. On the back of discussions and meetings with the UK Government’s Department of Business, Energy and Industrial Strategy during late 2017, on the 4th of January 2018 we started shipping the very first of our fully EU/UK regulation compliant cells to end users and their suppliers. To date, we have shipped over 400,000 fully compliant cells for end user use and have built a database of serial numbers for every single one. We know where it came from, when it was tested, printed and which company we sold it to.

With industry reception being largely positive and having been featured in several industry publications for our efforts on ensuring customers receive a genuine, safe and compliant product with our full backing, we’ve worked tirelessly to educate the market on the legislation and drive out those who continue to illegally import cells from China with no regard for the regulations, testing, their obligations to the WEEE directive and other regulatory bodies and most importantly, customer safety.

Production

Compliance bought with it some logistical, space and economic challenges and obstacles we needed to overcome with our “engines still running”. Introducing a large amount of automation whilst continuing to service hundreds of customers each week bought about some logistical and process alterations which while disruptive, were wholly necessary and have further down the line proved to be the cornerstone of our ability to service large orders of compliant cells for an ever growing number of the biggest wholesalers and retailers in the UK.

With all hands on deck and little time to reflect each day it only became apparent towards the end of the year in the final weeks before the Christmas Holiday just how much we had grown, evidenced in our lead times. While introducing more streamlined process and the addition of extra staff during the year, by the last quarter we were staring to struggle with keeping our lead times on Retail Ready orders down to the normal 48 hour or less turnaround. Into 2019, we are again looking towards more automation and more staff to ease the pressure and continue to service our clients at lighting speed.

Product Range and stock levels 

While we’re always looking to expand the range of products we hold in UK stock, its always difficult to call what we should stock and in what numbers. Sometimes we can have 30,000 of something sitting on the shelf and think we’ve over done it, then they’re all gone in a fortnight. The next month we might order double to compensate and be sat on them for 2 months! The battery industry is a hard thing to forecast. With the busiest part of our work being to businesses who use upwards of 5-10k cells in a single project or production run we can forecast to the best of our ability based on the previous quarters demand, then be wiped out in a day. To combat this, we are working with 3 new suppliers based in Europe who are normally able to service us inside a few days, taking the pressure off on smaller orders which generally need to be serviced very quickly, normally 48 hours or less. We hope that going forward, those who need sub 5,000 units can be serviced from stock, and those above can be serviced in a few days since there’s normally less of a rush.

Pricing

The sub factory quantity battery industry has always been volatile. Supply and demand swings rapidly up and down and so the prices can do so too. This was evident with the Sony VTC5A at the start of 2018, and the VTC6 towards the end. The VTC5A increased in cost by almost 100%, then dropped to an all time low of 20% below 2 year trend at the end of the year. As the VTC5A price hit the floor, the VTC6 went through the roof. To combat this, we have broadened our supplier base and have trade agreements with 3 new EU businesses who purchase directly from the manufacturers themselves in very large numbers. With these new agreements with companies who purchase in millions, we hope to stabilise prices and end the weekly headache of checking whether or not we’re making a loss or over charging. Going forward, we should only need to look at this on a monthly and quarterly basis with prices only moving by inflation/currency conversion. Pence, not pounds.

Custom Projects 

During 2018 we experienced a marked upturn in requests for custom made/re-manufacturing solutions for new and already marketed products. 18650UK have been working with a well renowned large scale pack manufacturer to provide off the shelf and custom battery packs for everything from torches, off grid monitoring stations, e-bikes, recreational vehicles and powerwall products and have already supplied around a two dozen companies with a UN/CE/RoHS certified power solution tailored to their product and/or market. During 2019, we will be working towards holding UK stock of the most popular of these products in order to service at least some of the applications on a next day basis. This will likely extend (but wont be limited to) e-bike battery packs and power supplies for recreational vehicles.

Cell Sourcing

2018 was also the year of consultative solutions to the common problem for startup technology companies and those releasing new products – Where to find what you need when you dont know the battery industry? Each week we get a handful of requests from businesses often in the design/prototype stages of development who need a solution but are unable or unaware of where to find cells, obtain them at a reasonable price and not be shipped something pretending to be something it isn’t.

Through careful and continued relationship curation with suppliers around the globe we have more often than not been able to fulfill and/or exceed the demands of the customer. We cant promise results on every occasion, but we can we promise to work with our clients every step of the way to find a solution, even if its meant offering their business to a competitor to get the job done at better cost or in a shorter time.

Looking forward to 2019..

To look into our future during 2019 we needed to look back at 2018; something we realised we barely had time to do. Its our customers who have made us. Shaped us. Pushed us to evolve, innovate and succeed (and occasionally fail!) in areas that sat around a table in 2016 deciding on the first two cells to stock, we had never even considered.

Our suppliers who have been helpful, outstanding and upstanding have also played a huge part in our evolution and successes and nothing we supply to you all would be possible without them.

I also want to add in an honorable mention to that one competitor with whom we’ve always maintained a friendly relationship and who have been our siblings in compliance – While we remain the occasional thorn in each-others side that stops one or the other getting comfortable; I believe that without properhealthy competition with a company who is just as dedicated to customer service and playing by the regulatory rules, no business has reason to innovate, diversify and prosper for the benefit of it’s customers. Here’s to another year of annoying each-other!

And here’s to you all. The ones who have supported us, supplied us, tired us out, kept us close, kept us up at night (and had some of us falling asleep in the office!) laughed with us, raised our coffee bill and lowered our hair count. Every single one of you in one way or another have got us to where we are now and for this, we are ever thankful.

Ben

Sales Director – 18650 UK

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