Michael Cox is well aware of the challenge that lies ahead. As the president of IT Products and Solutions (ITPS), a sister company to Computer Parts Warehouse (CPW), Cox readily admits that if one were to poll 200 random office technology dealerships, most would admit they never heard of either distributor. That, however, is about to change.
Houston-based ITPS is not a garden variety source for customers in need of a laptop battery, a monitor or a switch; besides, the marketplace is teaming with resellers who are essentially brokers serving as a go-between for random hardware and supply needs. The company was spun off from CPW last April to become a one-stop shop for managed print and managed service providers, focusing on the BTA dealer channel as a distributor of hardware, parts and supplies.
Michael Cox in Houston facility
While ITPS had just eight months under its belt at the time we spoke with Cox, it already had procured some impressive OEM authorizations, including HP (both HPI and HPE), Lexmark and Lenovo. ITPS is also a reseller for Dell, Cisco, Microsoft and ViewSonic. Houston was chosen as ITPS’ home base, in part, because HP has substantial operations in that city.
“One of our unique authorizations is with HPI in their remarketing division,” Cox pointed out. “That gives us the ability to provide factory-reconditioned product directly from the OEM that still comes with the OEM warranty and gives the dealer the opportunity to extend that warranty with a ‘care pack’ through (HPI) and provide the services they offer as a dealer in conjunction with those new products.
“When you factor in our service parts and the ability to provide supplies and accessories—OEM, remanufactured or even after-market—it gives our customers the choices they need to be aggressive in the marketplace and remain competitive while growing their business.”
In the Beginning
Camarillo, CA-based CPW was founded by Ron Hansen in 1997. As its name suggests, the 16-employee company focuses on the computer parts and supplies market, offering service and technical support, while also providing refurbishment, recertification and distribution of whole unit equipment. CPW offers products from many OEMs, including PCs, printers and servers.
Hansen serves as CEO for both CPW and ITPS. His son, Reid, is vice president of operations for the companies. The companies share executive resources, IT systems, human resources, distribution centers and purchasing volume. An inside sales team drives the sister companies, with Cox, Ron Hansen and Jeremy Hansen providing strategic business development. CPW has a second facility in Peachtree City, GA, while ITPS operates a sales and administrative office in Madison, WI.
The companies have invested more than $2 million into inventory and offer same-day shipment of critical service parts using all the major carriers. They boast strategic stocking by location of critical up time service parts and supplies, and have partnered with more than 100 downstream suppliers to source hard-to-find items.
CPW’s headquarters in Camarillo, CA
ITPS, which has 12 employees, was formed to provide the dealers and service providers in the imaging and IT industry with a single-source products distribution partner that focuses on MPS and managed IT. The idea was to avoid being tagged as a parts provider, given its variety of OEM and remanufactured products, which include:
- Long-life consumables (fusers, maintenance kits, ETB/ITB assemblies);
- Service parts for IT and imaging, both OEM and remanufactured;
- Toner, supplies and accessories—OEM, after-market or remanufactured;
- IT equipment hardware (laptops, desktops, monitors), factory reconditioned and CPW-ITPS remanufactured;
- Laser printers and MFPs; also factory reconditioned and CPW-ITPS remanufactured.
Customizing Solutions
ITPS can also customize solutions based on the customer’s needs, offering reverse logistics for advanced exchange and repair items, inventory liquidation, asset recovery services, third-party logistics and warehousing services.
Even with the shared systems, ITPS has faced a laborious process in its ramping up for the BTA channel, but the early results have been impressive. Sales have increased each month, culminating with 20 percent growth during the holiday-fractured November. The company measures its success through the acquisition of sustainable business as opposed to one-off parts/supplies purchases.According to Cox, the goal is to continue adding 20 to 30 clients who offer recurring business opportunities.
The tallest task for Cox, aside from garnering brand recognition, is breaking through in a market dominated by the broker reseller.
“Those organizations really don’t have any investments in overhead, structure or inventory; they simply pass dollars through by buying from one person and shipping to another—never taking possession of a product or providing the customer a solution,” he said. “The brokers, because they don’t offer a value-added solution, sell at a lesser cost. That’s where the dealer loses the additional services that they really need, especially when you’re doing hardware and service parts—whether it’s tracking serial numbers of hardware or doing reverse logistics for parts, especially service parts that are on exchange. But if you provide a solution to that dealer, a lot of those things are going to give them a much more efficient process and ultimately a more profitable system and program for their customers.”
Truly, the challenge is developing a customer base that identifies and values the added services of the ITPS platform rather than simply opting for the bottom-dollar, stand-alone offering. Cox’s challenge is identifying the right decision maker within an organization, when many initial conversations are held with purchasers who are price-variance driven (some of which are incentivized in sourcing the cheapest alternative).
“It’s difficult to get beyond that person and say let’s look at things from a more overall business perspective and consider the solutions we offer that provide the benefit not only to the purchaser but everybody else in the organization,” he said. “It’s a higher-level conversation and you have to earn the right to have that conversation.”
Spreading the Word
Cox is charged with marketing ITPS’ overall value proposition to the dealer community. While the name IT Products and Solutions may be unfamiliar to many, he believes the company’s numerous authorizations (the firm is currently working to add Xerox to its stable of partners) provides legitimacy to the organization, backed by the 20-year platform of CPW and aided by a staff with depth of experience in both the imaging and IT industries.
One of the keys for ITPS’ success is to provide solutions and perhaps a bit of order to a market that has witnessed drastic changes in the past few years. Acquisitions of Lexmark and Samsung (the latter changing HP’s printer engines from Canon-based to Samsung) has shuffled the playing field somewhat, and ITPS seeks to lessen the confusion for customers with information and support of the changing landscape.
“There’s information on older machines that (dealers) are still having to support, and in many cases the OEMs no longer want to support,” Cox pointed out. “We’ll continue to provide that information for them. We’re creating a spot on our website that will provide a lot of the legacy information that OEMs no longer provide. We want dealers to know they can rely on us.”
Defining Itself
The overarching goal for ITPS is to become an industry leader in IT products and solutions as opposed to being viewed as a parts distributor or a one-trick product pony. That ability to run the full gamut of offerings for everything from desktop computers and servers to phones, imaging equipment and even line printers—not to mention plans to continually grow the offerings exponentially—is what Cox feels will enable ITPS to gain traction within the BTA channel. Plus, the ability to craft customized solutions and bend to the needs of the client with a guaranteed quick-turn window should make ITPS the endearing provider it seeks to become in the long run.
“There’s so much change in the marketplace and our dealers are looking for stability,” Cox said. “From a copier perspective, dealers were in a market that didn’t change all that much for the first 20, 30 years. Now it’s evolving, and if you don’t pay attention for two or three months, you can fall way behind.
“We’re continually growing and looking forward to the future. We just need to get our message out to the marketplace. That’s the No. 1 goal for the next 12 to 18 months.”
