Ebuyer can add an extra £10m-£20m of revenue over the next 12 months just by regaining lost marketshare, its new CEO has asserted.
Talking to IT Chanel Oxygen, Rich Marsden dubbed the e-tailer a “fantastic business that just needs a bit of polishing” as he reflected on his first four months in the job.
Former Realtime Distribution and VIP boss Marsden and business partner Mark Reed acquired ebuyer from West Retail Group at the start of April for an undisclosed sum.
“We’d had a look at the business a couple of years earlier and the timing wasn’t quite right, so we agreed to come back around the table post Covid,” Marsden revealed.
“West’s main focus is kitchens and bedrooms, and they’d just moved into the US, so their motivations were clear.
“I’d spent nearly 25 years in distribution, and wanted to get closer to the customers, and be in a business that can really provide vendor partners with access to every market – which is pretty much what ebuyer’s got.”
Regaining lost ground
Fuelled by the boom in consumer and remote working hardware spend during lockdown, ebuyer’s revenues spiked to above £240m in both 2020 and 2021.
But its haul for 2022 is likely to dip below £200m, with Marsden admitting that the East Yorkshire-based outfit has to “go backwards before we can go forwards”.
“I would say we under-index in each of our four verticals – B2B, B2C, system integration and marketplace,” he said.
“Getting back to our normal marketshare will probably add £10m-£20m of revenue over the next 12 months. We’re not indexing where we should be, and even when we get there there’s a lot more to go at, so there is a huge upside to the acquisition and a huge opportunity.”
First 120 days
Marsden and Reed’s ebuyer acquisition sees the duo reigniting a business partnership that began in 1999 at Realtime Distribution (which the latter owned and the former went on to run). The top team also now includes CFO Alison Rose (pictured with Reed and Marsden, below).
Marsden characterised ebuyer as a “solid platform” in need of “new leadership and a fresh view” as he reflected on his first 120 days in charge.
“As is typical in an acquired business, there was a bit of waste and excess that we’ve removed, in terms of contracts that were probably no longer required,” he said.
“But the main thing we’ve tried to do in the first four months is just onboard our people. We will be a real people-led business and have already started to see some success, particularly in our commercial space where we’ve introduced incentive packages and provided some training. We’re just letting people grow into their roles, and that’s probably the biggest change.”
Although ebuyer generates around half its sales from B2B and builds between 1,500 and 2,500 gaming and commercial PCs a month, most people have pigeon holed it as a consumer e-tailer, Marsden conceded.
“We haven’t told ebuyer’s story very well,” he said.
“People see it as an e-tailer that services customers on PC components, and it does do that very well.
“But it also supports customers ranging from sectors such as banking and energy to finance and consultancies, which people don’t really know about. Yes, we’re strong on B2C, and it’s a good part of our business, but we’ve also got a strong and growing commercial business and a strong and growing system integration business, which we don’t promote as much.”
Ebuyer’s presence across its four verticals makes it a complete partner for the major vendors, Marsden claimed.
Its B2C arm serves 4 million end users, while its B2B unit – which competes with IT resellers in the AV, software and cyber space – has 600,000 SMEs on its books.
Measuring up at 280,000 sq ft and 60% automated, ebuyer’s distribution centre is big enough to handle a five-fold increase in sales, Marsden said, meanwhile.
“Having the ability to add £100m of revenue without having to change facility was a big consideration in which business we targeted for acquisition. Ebuyer’s building can cope with any volume we throw at it,”Rich Marsden
“One thing that’s really quite striking with the opportunity we’ve got is ebuyer’s reach,” Marsden said.
“That was the real beauty of the acquisition.
“Having the ability to add £100m of revenue without having to change facility was a big consideration in which business we targeted for acquisition. Ebuyer’s building can cope with any volume we throw at it.”
“The infrastructure is there to cope. The people we’ve got are extremely talented, and we have a number of markets to go after. We play in multiple spaces, which obviously helps when you want to fast track growth,” Marsden continued.
With sales of PCs and other volume hardware continuing to experience a post-lockdown hangover, Marsden admitted it is a “difficult market”.
“It’s been a difficult 1H for us, and I think that’s been the same to everyone,” he added.
“I think we’ve probably under-indexed for the last 18 months – coming out of Covid – against where we should be and that’s been difficult for our people. So we were coming into a business that needs a bit of a boost.
“We will probably go backwards before we can go forwards as we set the foundations. But once we get everything aligned, and get people in the right place and doing the right jobs with the right support, ebuyer has huge potential over the next three years.”