It’s a Resellers’ Market : Computer Retailer’s O.C. Partner Aids Buyers
Robin Kennedy is a personal shopper for corporate America.
Her Newport Beach company, Centric Resources Inc., has teamed up with giant computer retailer MicroAge Inc. to help companies decide what equipment they need and then order it.
Centric opened in March and already has $10 million in contracts to provide computers to corporations including Unocal Corp., Hughes Aircraft Co., Northrop Corp. and Rockwell International’s Rocketdyne division.
Such partnerships between so-called resellers like Centric and major manufacturers are increasingly common, said Steve Kedzior, senior vice president at MicroAge.
“It is definitely becoming a trend,” he said, citing similar agreements set up by MicroAge competitors Intelligent Electronics and Inacom Corp. with various resellers.
What’s happening at Centric represents a trend sweeping the industry, said Evelyn Walker, a spokeswoman for Intelligent Electronics at its Exton, Pa., headquarters. “Every major computer aggregator is setting these up.”
The role of a reseller such as Centric is narrowly defined: It does not operate retail outlets, maintain inventory, configure equipment or collect payment. What it does is consult with corporations on what they need to operate more efficiently, then arrange for purchase of the equipment. The manufacturer does the rest.
“Resellers,” Kedzior said, “are sales people and computer people.”
Such go-between companies are not new, and not all of them are small. CompUSA, for example, the Dallas-based computer reseller, is a retailing giant, with annual sales of more than $2 billion.
But in a highly competitive field where technology is quickly outdated, size does not guarantee success, analysts say. CompUSA, for example, recorded a loss of $16.8 million for its latest fiscal year, a sharp contrast with profit of $12.3 million for the previous 12 months.
This year’s fierce price war among computer manufacturers is putting additional pressure on resellers and does not appear likely to end soon, said Tony Cherbak, a retail analyst in the Costa Mesa office of national accounting firm Deloitte & Touche.
However, MicroAge is convinced that it will benefit from its arrangement with Centric, which pays a fee to represent the manufacturer. “So long as they are successful,” Kedzior said, “the more volume they do with us.”
The partnership appears to be paying off handsomely for Centric too. The company, which opened eight months ago with only three staff members--Kennedy, the founder and president, and partners Barry Noebel and Andy Anderson--now employs 19.
Kennedy projects that her company, which is paid a percentage of the profit from each deal, will arrange $20 million in sales for its first full year of operation.
Kennedy, 35, started the company after having worked 10 years as a computer saleswoman for a number of companies.
Going into business for herself was definitely the right decision, said Kennedy, who started the company with $300,000 that she and her partners raised from “personal resources.”
“There is no question it is a good field for women,” she said. “There don’t seem to be the same kinds of gender biases women face in other industries.”
Centric Resources at a Glance
* Founded: 1994
* Business: Computer reseller
* Headquarters: Newport Beach
* Owner: Robin Kennedy
* Employees: 19
* Projected 1994 revenue: More than $20 million
Source: Centric Resources Inc.
