1. Nimble Supply Chains: Why Drop-Ship Changes Everything, and Nothing

2. SOG 1.0 1986 - 2009 2007 - 2011 2010 - Present 2009 - 2012

3. Who is SOG Today? We don't settle for ordinary. We never did, and we never will. -- Spencer Frazer, Founder/Chief Designer

4. Roadmap to Success Company Sold In 2009 to Private Capital Group GOAL – DOUBLE SOG IN 2 YEARS!!! Develop Growth Support Plan Hire VP of Retail Sales Hire eCommerce-focused Rep Agency Build Brand Recognition Leverage Existing Relationships with Big Box Retailers Build Drop Ship and eCommerce Channel

5. Dive Into E-Commerce Are Drop Ship and eCommerce a Necessary Evil?

6. New SOG Emerges Economic Impact Clear 2 Consecutive Years of Huge Growth = 40% each Knife Industry Annual Growth Average = 8% Reactive Versus Proactive E-Commerce proves SKU demand SKU Placement At Retail Expands Rapidly

7. Dive into Drop Ship Costco.com and Target.com Drop Ship model only No Inventory Branded Consumer Experience Order Processing Volume More Than Doubled Hundred of Orders Received Each Weekend Drop Shipping IS A Necessary Evil!!!

8. But …

9. Black Friday & Cyber Monday Increased direct-to-consumer orders of 650% Weekend Orders In The Hundreds OOS On Top Selling Items Low Fill Rate at 70% Order Turnaround Was 5+ Days DISAPPOINTED CUSTOMERS AND BUYERS Best Holiday Season Ever

10. SOG 2.0 Overhaul To Supply Chain Supplier Diversification Lean Implementation Improved Forecasting Efforts Created Early-Stage SIOP Process Key Account Analysis Annual Purchase Order Volume = 30,000

11. SOG 3.0 Same Day Order Processing Continued Process Improvement Advanced Forecasting Methods SIOP and SKU Rationalization POS Analysis (TPI by SPS) New Product Development Gate Stage Process Annual Purchase Order Volume = 60,000

12. Overcoming Obstacles Seasonality Q4 – Christmas Fall – Hunting Spring/Summer – Outdoors Winter – New Product Launch Chinese New Year Asian Supplier Holiday Nothing In or Out Efforts Spent On Improving Business Processes IT Improvements Staff Training Sessions Marketing Efforts New Product Development

13. Integration Story BETA Participant with VSync (Accellos) and SPS Began Testing In July 14 Out Of 45 EDI Partners Already Integrated Integrated Trading Documents Include: Purchase Orders Functional Acknowledgements Advance Ship Notices UCC-128 Labels Custom Packing Slips Invoices

14. EDI Transactions

15. VSync and SPS Previous Solution Took 6 to 12 Months Currently Integrating 3 or 4 Partners Every 2 Weeks 30,000 Touchpoints Eliminated Through Q4 Annual Savings = $50,000 (Estimated) Eliminates 50 hrs/week Order Processing Time Additional Benefits: Increases Margins Increases Accuracy Decreases Order to Ship Time Decreases Customer Status Checks Reduced O/T Costs During Peak Times

16. Thank You. How To Reach Me… Tanya Tremoulet P. 425.361.4602 C. 425.248.1893 E. tanyatremoulet@sogknives.com