New wholesale business model eXeeds expectations

New wholesale business model eXeeds expectations

Who said IT wholesalers require warehouses full of stock to deliver on the needs and demands of their resellers?eXeed - the new wholesale business created by former Prion and Siltek director Michael Bosnar in September - has recuperated all its set-up costs in its third month of operation and will open a Brisbane office in January - all this without having a single product in stock.

According to Bosnar, the success of the company has been its business model, whereby it operates as a sales and marketing company for the HP brand without any of the overheads involved in holding stock. eXeed operates as an "extension" of HP's sales team, targeting commercial dealers while outsourcing logistics to a company that specialises in inventory management and delivery, he said.

Bosnar said the business is "well ahead of forecasts" since launching and has so far invoiced in excess of $1.5 million over the first three months of operation.

"We weren't expecting to turn a profit until the fourth month and didn't expect to recuperate the initial investment until the sixth month," Bosnar said. "The initial success of eXeed has shown the business model we have developed is both viable and portable," he said.

"It can be rolled out very quickly and that gives us the opportunity to expand the model nationally and into other countries in the region when the time is right. I now think that could be sooner rather than later."

According to Bosnar, the key focus of eXeed is on "value products" such as servers, networking and storage, but it is still doing some commodity products - desktop PCs and desktop printers - as a "value-add" to customers.

"We are providing all the resources to resellers so they can deliver an end-to-end solution.

"Resellers make margin on every component of the sale," he said.

While this doesn't sound much different to what a lot of distributors claim to do, Bosnar said the difference with eXeed is in the lean business model it runs, the limited number of "mid-sized commercial systems integrators and regional dealers" he is targeting and the pure focus on HP.

As far as expansion plans are concerned, Bosnar said a decision by leading New Zealand broad-based distributor Renaissance to abandon HP, Compaq and Microsoft has opened a window across the pond. Meanwhile, he sees "huge opportunities" for the business model and the company in Asia.

Bosnar is also in negotiations with consumables distribution giant Daisytek to secure that line of business as well.

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