UK distributor Anglia Components is shipping to companies across Europe for the first time.
“This started 18 months ago with suppliers wanting the website to work in Europe,” said Steve Rawlins, CEO and majority shareholder at Anglia Components. “We started looking at our agreements and realised that most of our Japanese relationships included Europe. We have 180 suppliers and all of them, apart from a couple, are happy for us to go into Europe,” he tells eeNews Europe.
“Unlike other distributors, where they stock the same thing from different brands, we don’t. There’s a also bit of an undercurrent on the data flow, as the POS data goes back to the US with many distributors. We are the last of the pan-European distributors. Nobody else can do it.”
“I never dreamed we would be able to go into Europe which is why the website was written the way it was,” said Rawlins, who says he is 90% recovered from a stroke two years ago. “We have been invited in and that gives me hope.”
The move into Europe is behind the recent expansion of the warehouse in Norfolk and will help to address the current excess inventory and currency conversion issues.
“We have expanded the warehouse by 40% and we are taking Euros, dollars and sterling on the website. The big issue was delivery,” said Rawlins.
“The paperwork and VAT are handled in Paris and Fedex deliver the day after, which is competitive with Digikey and Mouser with less air miles on the delivery and everything is trackable,” he said. “We are subsidising the delivery charge for free next day delivery for orders above $60. By the time the shipment lands in Paris the VAT is sorted by a third party company and it can be shipped out the same day. The key is having a competitive, reliable delivery service, that’s essential.”
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“We think there are 150,00 customers in Europe and we trade with 10,000 of them. The sweet spot is definitely Germany and the small EMS customers, there’s maybe 600 in Germany, so we are buying mailing lists to target them,” he said. “We think this high service distribution market in the UK and Europe is $5bn, and that’s a huge market, and the overall DTAM addressable market is $20bn to $25bn.”
“Most of our suppliers pay in Euro so this avoids conversion costs. We haven’t bought more inventory. We are overstocked, there’s no doubt. Our suppliers encouraged us to place big orders last year and then the excess moved into distribution.”
“We have also reshaped the packaging, with environmental packaging with no logos so customers can use the packaging, and we use paper tape rather than plastic,” he said. “We have the individual weight and volumetric weight of each item and the system tells the packer the size of box to use so it fits exactly to the package. This is all led by suppliers asking for it.”
The company is aiming for a turnover of around £95m this year as a result of the slowdown in the electronics market, and the revamp of the website, the packaging and extending its deal with Fedex into Europe has required an investment of around £3m.