- AV Gear Distributor Plans for Robust Growth, Education Initiatives in 2012
This NewBay Media Q&A with Stampede owners Kevin Kelly and Mark Wilkins shows the distributor at the pivot point between the AV Channel, and product manufacturers. Stampede Presentation Products, based in Amherst, NY, a few miles north of New York City, celebrates its 15th anniversary in 2012. But to limit the company to the display category does a disservice to what is a diverse array of initiatives that company president Kevin Kelly and CEO Mark Wilkins have implemented. They include having invested over $10 million in the business in 2011 alone and adding more than thirty-five new lines since 2010 to its 9,000-plus dealers. In 2012 Stampede plans several initiatives that they say will solidify and extend the gains they made in the last several years. These include increasing its technical support staff to ten from the present six members; increasing inventory levels for existing and additional products and manufacturers; leveraging its relationship with its financial partners, including HSBC, to increase the amount of credit that it can offer dealer customers; expanding relationships with customers with a new Vendor Portal program that takes the entire transaction securely online; and expanding its Stampede University training program to include more business-oriented courses and a consulting program designed to help its residential dealers develop commercial markets. It’s a full agenda, but Kelly and Wilkins say that’s what it takes to maintain that position as a bridge between dealer and manufacturer.
NewBay:Congratulations on a great year. It’s closing with a 51% increase in unit sales in your core categories.
Stampede’s Mark Wilkins
Mark Wilkins: We’ve really been investing over the last two or three years. Two or three years ago, when the crush happened when Lehman hit, we literally overnight saw a 20% to 30% drop in revenues. And then we spent the next year shoring up what we already had, and really reestablishing ourselves. We were very well supported by financial institutions, HSBC, and others, and our financial partners really helped us through the tough period, which everybody went through. But then we saw Electrograph, one of our major competitors, go out of business, we saw the opportunity. We talked to our financial partners and decided it was time to invest and time to go back at it again.
Stampede’s Kevin KellyKevin Kelly: The reality of the situation is that we’ve invested more this year in reinforcing our commitment to the pro AV business and maximizing the opportunity that we bring to both the manufacturers and our dealers. That investment has come in a couple of different ways. First and foremost we acquired Spire Global, which is the exclusive distributor of Sony videoconferencing in the United States. That acquisition was done solely to enable Stampede to bring the videoconferencing category to dealers that are in need of the category and certainly videoconferencing has proven to be one of the growth areas of AV. In addition, we’ve invested millions of dollars more in accounts receivable, extending more than $55 million in credit to the trade. In addition to that we support our manufacturers by carrying more inventory than ever before in our entire history. So we’ve invested millions of dollars in additional inventory to be able to provide that value to those manufacturer partners, and to be able to have that product on hand and available for immediate shipment to our dealers.
NB:How do you expand so extensively yet remain centered on your core market of displays?
MW: We will always sell the core pro AV product. We are a pro AV specialist and usually the pro AV market is based around a display of some sort. Our philosophy hasn’t changed in that we will always be an expert and a specialist in the display market. Now what you find during this time is that technology has changed and new markets have arisen around the display. You find digital signage coming into play much more with the technology. You find digital media coming in. So there’s all these other things that are happening but still the core product if you like is around the display, because what you’re trying to do is you’re trying to show information to a number of people more than just the individual person. So part of our investment strategy wasn’t just coming out of the recession and coming out of corporations buying again and things like that, but also this migration between the different technologies around the display enabling people that have the expertise to take advantage of the corporate market spending money again.
NB:You’re emphasizing education and communication in relationship to Stampede’s customers. For instance, the launch of an expanded Stampede University that’s going to feature a curriculum of online classes in key product categories, as well as a new Stampede vendor portal that’s going to let your customers manage all of their claims online and interact with your account managers. It sounds like you’re building almost a new infrastructure here.
MW: Part of our mission is that not only do we have to offer a value to our customers but also we have to offer a value to our suppliers. Part of the value we offer to a manufacturer through Stampede University is through educating the marketplace in new technologies. Not only is it part of the value to the dealer that he’s being educated, manufacturers actually do want to teach dealers how to use their products and how to sell their products. So when you see infrastructure changes and stuff like that there’s usually different reasons why we’re doing it. One of the things we’ve found in the U.S. over the last 10, 15 years, a lot of the manufacturers set up their own operations and a lot of the manufacturers try to do their own distribution throughout the U.S. When the market grew, and the market keeps growing, you get more dealers coming on board, more types of resellers, more customers and such. A lot of manufacturers lost their plot frankly, [by not taking] advantage of concentrating on their products and looking at their product and manufacturing their product, and they spent too much time on the distribution of their product. Whereas if they employed a professional proactive distributor they might have been able to reinvest that money back into making new product and staying ahead of the technology curve. So our goal is, [to be] an extension of their sales and marketing divisions, so we will actually work at going out to educate the marketplace, to create a sales channel.
NB:Another thing that you’re doing is you’re expanding your technical services support team from six to ten, and embedding employees at certain dealers. Is that a new tactic?
KK: It is something that has been done in other industries, but certainly inside the pro AV world it is not a traditional approach.
MW: As the pro AV market expands and as the opportunities expand, what we’re doing is we’re going to some of these other types of dealers that don’t have the expertise in the pro AV market and saying hey, we’ve got the expertise, we’ll help support you through this. And if we don’t have the expertise, we’re very interested in acquiring it. So looking forward one of the things you might see in the future is more acquisitions that have skills that we don’t have so we can add it into our portfolio of services.
NB:What does 2012 hold for Stampede?
MW: We’ve experienced tremendous growth over the last 15 years and our goal is twofold. We want to see substantial growth over the next two or three years. We believe we have the right investment partners to be able to do that, we have the right mentality and the mindset to it. We see more acquisitions in the near future; if there are holes in our portfolio we tend to plug them. I see no reason why we can’t be looking at 20% to 30% growth from a revenue point of view without the acquisitions, and then having the acquisitions on top of that.
KK: And obviously our goal is to make sure that we’re continuing to add more value to both sets of partners that we have. Certainly giving dealers more product categories that they can buy from us and then sell, and to be profitable doing it. The real key categories enable folks to get into businesses or get into areas of the market they may not have been playing in before but that offers them ways to make additional income and ways to make incremental profits that they weren’t making in prior years. Some will be done organically, some will be done through acquisition, but it absolutely will yield more growth, and then that growth offers our core manufacturers more opportunity because as we serve more of our customers we continue to grow the level of dedication and loyalty from our customer base. That only adds more value to the manufacturers we serve because then they have more opportunities at certain types of dealers, more opportunities at certain types of end user opportunities.
MW: We do intend to stay specialists though, I think that’s really important to note is we are a pro AV distributor, and we will carry on selling displays as our core product and then we’ll build around it, so when we do acquisitions we are looking at acquisitions of complementary technologies our new technologies that complement the pro AV dealer, or the pro AV integrator. We’re not looking to go and sell washing machines.