INTERVIEW: Northamber on its turnaround and new strategy

Long-established distributor Northamber is in a state of transition. It made a £1 million loss in 2012/13, but is embracing emerging categories, strengthening its IT business and hiring experienced staff in an effort to turn things around in 2014.

Dominic Sacco asks director of strategy Alex Phillips and product manager Raste Khan what’s next for Northamber…

PCR: Can you tell us about the story of Northamber, from its creation in 1980 to where it is today?

Alex Phillips: It was founded 34 years ago by my father David, who was doing a lot of import and export at the time between the US and the UK. He found himself enjoying PCs and saw an opportunity. He started off in his garage at home and went from there. 

We were actually known as The Printer People initially, as we were very printer focused – we then became a large broadliner. Up until a decade ago we were one of the largest.

Over the past couple of years, we made a choice to walk away a bit from PCs. The term we used was ‘empty revenue’ – the idea of buying PCs a few months in advance but by the time they arrive the market has changed. If a product doesn’t move, you’ve lost money. So we decided to move away from that. 

Does this mean you’re cutting off certain vendors?

AP: Relationships are a big part of Northamber. I’m grateful for the vendors we’ve been with for so long who have stuck with us during this period of change, and I’m not going to turn my back on them. 

We’re not looking at any drastic changes in terms of our current portfolio. We may scale back slightly – we don’t want to have ten of the same SKU stacked high with a different vendor logo stamped on the front of each one. We’re looking to partner with two or three vendors in each area. We’re also embracing new categories while sticking to computing.

Which categories?

Raste Khan: Wearable tech and virtual reality are some things we’ve been researching and that I think we should go into. 

Virtual reality machines could be the next big thing in tech. Also – home automation. The possibilities wireless technology gives for improving home automation and energy efficiency are genuinely exciting.

AP: Networking is an area we were strong in and we’re renewing our focus there. We’re also looking at 3D print. We have an education team here and have been dealing with education resellers for a long time. We’ve been renewing our focus on that over the past few months, including coaching and how to get into that space. 

PC gaming is also a growing sector. What are your plans in that space?

AP: We view it as an exciting area – a huge space – which is a natural fit for Northamber. Certain other disties at the moment are stronger than I’d like them to be in this space, and I intend to come in and – with our winning customer service – displace them. 

Any retailers out there who are looking for a new distributor for gaming products, come to us. When someone wants a particular gaming or overclocked system, plus custom packaging, we can make it all in-house on the same day. 

Will you be supplying the upcoming PC gaming Steam Machines to retail?

RK: This is something we’re looking into – and again it ties in with our config section. We’ve been in contact with Steam. But there’s still no release date just yet – that’s something we’re waiting for. 

Are you on a hiring spree?

AP: We’ve hired over a dozen people in the last five months, and they all come with industry experience. We’re recruiting people who have the skills and experience to come in right away, and I feel comfortable letting near our customers. Everything we do at Northamber is about customer service.

How many more employees are you hiring?

AP: There’s no fixed headcount. I’m more interested in continuing to offer new areas to help our customers. My view is that at the moment we’re not at full capacity and aren’t serving all the customers we could.

You seem to prefer hiring more experienced staff…

AP: When dealing with a large pan European distie, a reseller will call up and after a couple of rings go through to voicemail. On the sixth attempt they might get lucky and get through to someone who is likely 18 years old and a temp. I respect them but it’s a different approach. 

We have a no voicemail policy. If the phone rings, we answer it. It’s about making sure that when customers call, we’re there to help them. That’s really important to us. Because of the experience and relationships we have, we can help guide resellers through to make sure their customers are happy and they’re maximising their market opportunities. 

What are the plans for the future of the business? Will you take over when your father retires?

AP: We’ll see. Like most sons I hate to overly credit my father (laughs), but there is very little about the UK distribution model that he doesn’t know.

I’m still learning a lot from him and the team. He may be less involved in the day-to-day, but David is still the chairman and a crucial part of the business.

My approach is teamwork. I spend over half my day on the sales floor, making sure I’m aware of every vendor and what everyone’s doing – it gives me a real first-hand sense of what’s going on in the market. 

I have some big ambitions for Northamber. This financial year has been about investing and focusing on getting things in place for the next financial year so we can make a big impact, and the initial signs are very positive. 

Tell us what sets you apart…

RK: We insure ourselves. If a store comes to us and they have their £10,000 limit elsewhere, we can still give them credit. For people who have contracts in place but don’t have that payment in yet, we can help them complete a sale.

AP: We are trade-only – we would never sell to end users – but we can secure an invoice to an end user to help get credit to our resellers.

Another thing we offer is sourcing. Our customers like our friendly, knowledgeable sales team. If they want a product we don’t stock, we can often negotiate better terms and bulk discounts with other disties than they could. We smile when we take share from other disties, but we smile more when we create opportunities for our members.

Tell us about your warehouse and facilities…

AP: We invested about £7 million in our 100,000sq ft warehouse in Weybridge a year and a half ago. We have training suites there for our customers and vendors – and our own world class configuration centre. This value-add and our install teams help our customers compete with etailers and make margin by selling smarter, while etailers sell some products at rock bottom prices. 

RK: Our warehouse is phenomenal. You can get several members of staff in our configuration centre to build between 50 and 100 computers in one sitting if they need to.

It’s our printer special this month. Figures show that MFP printers are strong, while SFP is declining. Are you seeing that?

AP: Yes. I’m proud to say that Northamber is having a very strong push back into print these past couple of months alone. We distribute Brother, Oki and Ricoh. We want to become one of the top three or largest print distributors. We’re very excited about the print opportunity and we see it as a growth area.

Do you have a Managed Print Service offering?

AP: Managed print is something which has been talked about a lot but has rarely been done correctly. We have a presence in there and we’re looking to strengthen it, but we want to make sure the system works for our customers before we throw our weight behind it.

Where would you like to be this time next year?

AP: I want Northamber to go back to its strength – customer service. For that to happen we’ve got to find and continue to work with vendors who want to differentiate themselves, find new opportunities and invest with us to uncover those. 

We’re in a sweet spot right now. We’re big enough in terms of resources, cash and customer reach that we can make a big impact for our vendors, but small enough to act very quickly. 

We’ve done indie retail for over a decade but it hasn’t been given a dedicated team. I’m changing that by putting in place people who know what they’re talking about and can service those accounts with a dedicated focus.

We have been able to take our time and do things properly over the last couple of years – that’s the reason why we’ll be around for another 34 years.

FACT FILE: Northamber 

Based: Chessington
Established: 1980
Employees: 100
Active customers: 5,500
Warehouse: 100,000 sq ft
Contact: 020 8296 7066
Web: www.northamber.com